Toward ‘Sustainable Development’ Through Zakat-Infaq-Sadaqah Distributions – As Inclusive Activities – For the Development of Social Welfare and Micro and Small Enterprises

Abstract

Indonesia’s national development, based on Pancasila as the official, foundational philosophical theory of the state, is similar to the concept of development based on an Islamic perspective, which includes economic, moral, social, material and spiritual aspects. One of the instruments used in Indonesia is the distribution of zakat (obligatory alms), infaq (donations) and sadaqah (alms) (ZIS), which eight groups of people are entitled to receive (asnaf). ZIS is a worship, which must be fulfilled by all Muslims. This article discusses ZIS distribution in Indonesia, as a national inclusive activity, and analyses its contribution to social welfare and micro and small enterprise development. The results prove zakat distribution affects both variables significantly, but the distribution of infaq and sadaqah is not significant. It also shows there is a strong correlation between all indicators for the two variables, together with human development, as well as trends for some variables that could achieve the four goals of sustainable development by 2030.