Zakat plays an important role as part of the Islamic socio-economic system. Zakat is said to be one of the financial tools to alleviate poverty apart from micro financing and micro credit. However, it is found that most of the benefits are only offered to the citizens of Malaysia and not the other untapped communities from other countries especially the refugees that seeks our government's protection. Hence, if the existing zakat recipients who are the citizens still unable to avoid from the unruly poverty, let alone the untapped group, especially the refugees. With the majority of refugees hailing from Muslim countries, Muslims around the world fulfilling zakat, a major pillar of their faith, can play an important role in alleviating their suffering and restoring their dignity as human beings. The realization of the incredible philanthropic Islamic social finance such as zakat, which can potentially exceed $300 billion a year, has driven United Nations High Commissioner for Refugees (UNHCR) to launch a Zakat Program in late 2016, namely Refugee Zakat Fund. Currently, the approach by zakat institution to help refugees are less proactive, given that most of the approach are made by the non-government organization (NGO) such as UNHCR Malaysia and local non-government organizations. The issues are very important to be solved as Islamic social finance has a huge potential mechanism to reduce poverty. Hence, the objectives of this study are (1) to explain the role of zakat in eradicating poverty among refugees for improving their socio-economic well-being, (2) to explore the issues and challenges of zakat administration in Malaysia especially in helping refugees, and (3) to explore the issues and challenges of UNHCR in managing refugees' zakat funds. This study adopted qualitative approach by conducting interview with five experts in relation to Islamic social finance especially on the issues of zakat management. These experts have vast experience in Islamic finance and in Shariah. In general, the findings suggest that (1) zakat can play a crucial role in providing assistance to those in need without exception to fulfil both Maqasid Shariah and Sustainable Development Goals (SDGs); (2) one of the challenges facing the zakat institution is their managements are inefficient and a lack of transparency in terms of how the funds are collected, managed, and distributed, and hence, the adoption of technology is important for effective and efficient zakat system; (3) UNHCR must take important care on governance aspects in order to manage and administer zakat funds for refugees to improve the trust of zakat payers and recipients. This study may contribute to the enhancement policies in relation to both zakat and refugees made by both federal and state government by harmonizing the policies to solve the issues on poverty of the refugees, especially in Malaysia.
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Poverty in Malaysia as perceived by the cost of living has become a major concern among the citizen particularly among the low-income group. Most of the citizen raises major concern on the rising cost of living, cost of affordable housing, cost of education and medical cost. According to the report by Khazanah Research Institute in 2015 on the cost of affordable housing, it is stated that the cost of house in Malaysia in 2014 is deemed as seriously unaffordable as it is overpriced 4.4 times to the median annual household income (Khazanah Research Institute, 2015). Moreover, the out-of-pocket payment for medical cost also has increased intensely. Even though the public healthcare cost is generally cheaper in Malaysia, it is sought by many which led to long waiting lines and quite impractical for emergency needs patients. While there is also other option to choose private clinic or private hospital, the medical cost is quite expensive due tothe adoption of new technology is burdensome to many of the Malaysian citizen. For low-income household, this condition basically imposed threat and challenge for them to increase their income and improve their livelihood. Not only they face challenges due to low income and wages, they also were pressured with the increasing cost of living coupled with the pressure of not achieving any means of appropriate services such as education and medical care. This condition basically affected their standard of living and also quality of life, which will indirectly effect their economic potential to actively involved in the economy.
United Nation agenda on Sustainability Development Goals (SDGs) includes SDG 1 to end poverty in all its forms everywhere. Therefore, Malaysia has made numerous efforts in alleviating poverty through the role of Islamic social finance tools such as zakat, waqf, sadaqah, micro financing and micro takaful. Zakat is one of the fundamentals of Islam. The obligation of zakat comes after the prayer obligation. Zakat must be performed by every Muslim who possesses wealth equal to or exceeding a prescribed minimum limit (Sarif, Kamri & Ali, 2013). In Islam, the mechanisms of wealth creation need to be balanced with wealth distribution in order to achieve the main objective of zakat, which is socio-economic justice (Abd. Wahab & Abdul Rahman, 2011). As such, zakat is imperative in promoting equitable distribution and income equalities among the citizen. Aside from that, zakat also increases the chance of the low-income group to actively participate in the production sector of economy. According to Patmawati and Ruziah (2014), the distribution of zakat to the zakat recipients (i.e. asnaf) will support them in the long run as the funds will be use to improve their standard of living and quality of life as well their socio-economic wellbeing.
According to Islamic world view of re-distribution, zakat is said to be one of the Islamic philanthropic tools to alleviate poverty apart from micro financing and micro credit. However, by looking at the industry right now, most of the benefits are only able to be channeled to the citizens of Malaysia and not the other untapped communities from other countries that seeks our government’s protection especially refugees If the low-income group still unable to avoid from the unruly poverty, let alone the refugees. Hence, it is undoubtedly only few effective tools for alleviating poverty for refugees. Their chances are lesser and therefore unable to seek protection for themselves especially for their health and their families.
Although it is difficult to determine precisely on the exact number of refugees in Malaysia as they are scattered throughout the country, the latest reports as at end of February 2020 by the United Nations High Commissioner for Refugees (UNHCR) Malaysia indicate that there are currently a total of 178,990 refugees and asylum seekers registered (UNHCR, n.d). Currently, based on UNHCR Malaysia website, there are over 180,000 refugee men, women, and children in Malaysia. Statistically, UNHCR Malaysia used to refuge an average of 10,000 refugees per year, which was the largest resettlement program in Southeast Asia and the third in the world (ISIS Malaysia National Interest Analysis, 2016).