Poverty Eradication Policies Centered on Social Takaful

Poverty with its far-reaching ramifications for the society is a fundamental social problem, especially in the developing countries. In response to the question that who is responsible for eradicating poverty, ‘the government’ is the first answer that comes to mind. Yet, state institutions in most developing countries are too weak and inefficient to properly address the issue of poverty and, hence, we are witnessing a growing rift between the rich and the poor in these countries. In this article, the authors examine the possibilities for poverty eradication through traditional institutions capable of such task and argue that, in the context of Islamic societies, the principle of takaful (in-group mutual aid) and the institutions to which it applies could positively be used to combat various forms of poverty. These traditional institutions all go beyond the customary people-government dichotomy and actually predate the state. Drawing from the holy Qur’an and Itra, we come to realize that institutions of takaful, including the family, kinship, circles of friendship, and the community of co-religionists, that function as supportive-protective layers around individuals, could effectively serve to achieve a society devoid of the scourge of poverty. Instead of pursuing development policies that rely primarily on the welfare capacities of the state and other solutions that basically seek to empower individuals, we could invest in the traditional institutions to which people naturally belong and from which they customarily derive support and protection in times of need and hardship.