Niswatun Chaira
1701103010036
Islamic Economy as The Poverty Reduction
Indonesia is one of the developing countries in Southeast Asia. One of the giant problem facing
developing countries is the inequality of income distribution and poverty levels. The problem of
income gap and poverty is not only faced by developing countries, but even developed
countries could not be separated from this problem. Poverty is a global problem. The general
causes of poverty include laziness, ignorance and waste of the local population; a natural
disaster; and the rise of crime.
Because of the increasing of poverty in Indonesia, the Indonesian government do innovation by
developing Islamic economy to wipe out the poverty. Islam has various principles related to
public policy that can be used as a guide for poverty eradication. Islam encourages economic
growth that provides widespread benefits to society through the prohibition of interest. The
prohibition of interest will effectively control inflation so the purchasing power and economic
stability are created.
Islam also encourages the creation of a state budget that takes sides with public importance. In
Islam, the state budget is a public treasure so the budget becomes very responsive to the
importance of the poor, such as providing food, paying for burial and debt, providing interest–
free loans for commercial purposes, and scholarships for religious study.
Islam encourages the policy of equity and income distribution that favor the poor where the
land ownership, the implementation of zakat, and advocates infaq, and waqf. With the