How Southeast Asian countries can utilize Zakat to combat poverty

The Southeast Asian region is home to 697.4 million people, with Muslims constituting over 40% of its population. Despite Zakat being one of the prevalent socio-economic instruments that could help improve the living standards of the underprivileged - multitudes of people across the region continue to live in penurious conditions. 

This perhaps could be one of the reasons why Southeast Asian countries struggle to extricate people from stifling economic conditions. For instance, Indonesia, much like the rest of the world, is also plagued with poverty, despite housing the world’s largest Muslim population. In 2024, the country housed a total of 25.2 million people living in poverty, 5 million of whom are extremely poor. 

Zakat is the third pillar of Islam, mandating eligible Muslims to give at least 2.5% of their qualifying wealth to the needy. Zakat collection across Indonesia has increased steadily over the years, from 14 trillion Indonesian rupiah ($855.8 million) in 2021, to 22.5 trillion Indonesian rupiah ($1.37 billion) in 2022, and 32.3 trillion Indonesian rupiah ($1.97 billion) last year. This year’s Zakat projection stands at 41 trillion Indonesian rupiah ($2.53 billion). Yet, these funds have managed to help only a limited pool of people, with a mere 463,154 benefiting in 2022, and 574,903 in 2023.