Optimizing the Role of Baitul Ma’al in Eradicating Poverty in the Province of Aceh: Issues and Solutions

Hafia Ummari and Anita Priantina

Chapter 2 in Islamic Economic Institutions in Indonesia:Are they Successful in Achieving the Maqasad-al-Shari'ah, 2023, pp 15-41 from World Scientific Publishing Co. Pte. Ltd.

Abstract: The tsunami disaster in 2004 had raised the poverty rate in Aceh. Development activities in Aceh following the tsunami turned out to cause more High Poverty Rates. It is expected that Baitul Ma’al Aceh should try to Reduce the level of Poverty. But its implementation is not yet optimal. From the results of the above discussion, one can identify that several problems occurred at Baitul Ma’al Aceh. The problem is divided into two parts: Internal and External Problems. The internal problems consist of (1) Institutional Issues, (2) Managerial Problems, (3) Lack of Program Variety, and (4) Lack of HR Capacity. The external problems consist of (1) Lack of supporting regulation, (2) Lack of budget provision, (3) Lack of good governance, and (4) Lack of people’s knowledge and understanding. Regarding solutions, both internal and external solutions have the same importance. Solutions for the internal problems are integrating the management, upgrading human resource capacity, product innovation, and increasing partnership. Solutions for the external problems according to priority ranking are special budget provision for Baitul Ma’al, revision in qanun, improving coordination in Baitul Ma’al, and applying know-your-customer principles. The proposed strategies based on priority ranking are setting up a blue print, special budget procurement, and upgrading the coordination and management system.

Keywords: Islamic Economics; Institutions; Maqasad al-Shari'ah; Islamic Capital Market; Shari'ah Entrepreneurship; Indonesia; Finance; Economics; International Finance; Corporate Finance; Islamic Finance (search for similar items in EconPapers)
JEL-codes: A1 A14 F3 (search for similar items in EconPapers)
Date: 2023
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