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Islamic Economic System and Poverty Reduction

Poverty is an economic condition of lacking basic necessities needed to live a reasonable life. This include need for money, food, water, education, and shelter. Poverty reduction is a process, aiming to reduce the level of poverty in a group of people or countries. World Bank suggests that poverty can be reduced by various means and methods, which includes economic growth (increase in income and living standard) and direct aid/private charity. World so far has followed two economic systems, communism and capitalism. The communism was based on an emotional reaction against evil consequences of the capitalist economy, specially, against the element of inequitable distribution of wealth. But capitalism prevails, which still suffer from inequities in the distribution of wealth. The world needs a Third Economic System. Elements of Islamic Economic System involve: financing/trading, Zakat and Interest free loans. Even poor persons, with some credibility, can survive in this economic system. Islamic economics prefers co-operation to competition. This aspect of co-operation is a key to poverty reduction. It is possible to reduce poverty by following Islamic economic system because it takes care of society and social justice.

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36406
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36406
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10
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