Human Capital

ISFIRE COVER STORIES: PROFESSOR DR BAMBANG SUDIBYO, CHAIRMAN, BADAN AMIL ZAKAT NASIONAL (BAZNAS)

ISFIRE COVER STORIES: PROFESSOR DR BAMBANG SUDIBYO, CHAIRMAN, BADAN AMIL ZAKAT NASIONAL (BAZNAS)

This is a rare opportunity for our global readership to learn directly from someone who pioneered institutionalisation of zakat in Indonesia and led a global movement around a national success story. Badan Amil Zakat Nasional (BAZNAS) and World Zakat Forum are spearheaded by Professor Bambang Sudibyo, an Indonesian zakat activist of international repute. In this exclusive interview with ISFIRE, he shares his views on the potential of zakat in relief activities, poverty alleviation, and in a modern context, in achieving Sustainable Development Goals (SDGs). This interview doesn’t refer to the theoretical foundations and philosophical dimension of zakat, but rather it focuses on the practice of zakat collection and its disbursement. Although the main reference is to Indonesia, Professor Bambang Sudibyo draws on examples of good practices from other parts of the world as well.

“ALTHOUGH ZAKAT IS NOT OBLIGATORY ACCORDING TO THE STATE LAW, ALHAMDO LILLAH THE STATISTICAL DATA SHOWS THAT THE ZAKAT COLLECTION CONDUCTED BY BAZNAS ANNUALLY GREW MORE THAN 30%”

Professor, let us start with a provoking question. Please forgive us if it sounds like an aggressive action but we must ask this question, as it will clarify a lot of misconceptions about zakat and its potential. Do you mind?

 Professor Bambang Sudibyo:

No. I don’t mind at all. In fact, it is always a good idea to clarify any misconceptions about a phenomenon before discussing the technicalities of it.

Many people would say that the role of zakat in the economic development is exaggerated by Muslims. It is, in fact, merely a relief funding that allows the Muslim community to take care of the most vulnerable, like the destitute, displaced, and orphans etc. Its role beyond relief cannot be verified by empirical evidence and the practices of early Muslim communities. Is it true?

 Professor Bambang Sudibyo:

Zakat is an obligation for all Muslims whose assets have exceeded the nisaab. Everything has been regulated in fiqh and it is an obligation, which is clearly stated in the Quran: Surah al-Tawbah; Verse 103. So, since zakat is compulsory, the state is ordered to collect. There is a kind of “compulsion” to pay zakat for every Muslim. In an Indonesian context, it has been regulated by legislation, even though Law No. 23 of 2011 concerning zakat management does not state that zakat is mandatory. However, the mandate of the law is following fiqh, in which the state has the authority to collect zakat. This refers to the zakat management in the early Muslim era, whereas the leader of the government, Caliph Abu Bakr, emphasised that the rich who do not pay zakat will be at war with the state. In this case, the state uses its power to enforce the obligation to pay zakat. Even though Indonesia has not reached that level yet, the government has made every effort to approach the concept applied in the first generation of the Muslim era. So, that’s what we do. Although zakat is not obligatory according to the state law, Alhamdo lillah the statistical data shows that the zakat collection conducted by BAZNAS annually grew more than 30%. At the same time, the national economy only grew by about 5%. So people’s awareness to pay zakat is very good. Zakat aims at empowerment, and not just charity or philanthropic generosity. This is regulated in Law No. 23 of the Year 2011 concerning zakat management, which can be interpreted as charity. However, there is also an emphasis on empowerment. So, the zakat management in the Indonesian law implies an activity or programme that aims to empower mustahiqin (singular, mustahiq), zakat recipients who are billed to turn into muzaki’in (singular, muzaki), zakat payers. This was done by BAZNAS, which was later copied by regional BAZNAS and non-governmental amil zakat institutions (LAZ). And it is proven that many empowerment programmes have succeeded in converting zakat recipients into zakat payers.

“THE DIGITISATION OF ZAKAT MANAGEMENT IS VERY IMPORTANT, ESPECIALLY DURING THE COVID-19 PANDEMIC”

As the Chairman of BAZNAS, you have directly been involved in the practice of zakat. Would you be kind as to provide some examples of success stories in zakat collection and disbursement and the consequent effect on the bottom-line poverty?

Professor Bambang Sudibyo:

 Alhamdo lillah, the Director of Distribution and Utilisation of BAZNAS, Dr Irfan Syauqi Beik is very competent in his field. We carry out the task of distributing and utilising zakat very seriously. And thank God the various programmes we have developed have been implemented well. Not all the distribution programmes are a charity, but many distribution programmes are empowering in nature. And the realisation of all these programmes was successful. Nationally, regionally and globally, BAZNAS is one of the many award-winning zakat institutions, including the GIFA and the SDGs Award – Why do we get these awards? Because we have worked hard to achieve success, so that we can be a good example of how to manage zakat institutions. And if research is conducted, most of the awards we received are because of the successful system of distribution and utilisation of zakat. At a national level, BAZNAS also recently received Digital Awards. The digitisation of zakat management is very important, especially during the COVID-19 pandemic. We quickly adjusted and developed a collection and distribution strategy using a digital system. This was quite successful, as BAZNAS received three Digital Awards, two for BAZNAS as an institution and one for my leadership as chairman of BAZNAS. In terms of management and distribution, BAZNAS also implements international standards like ISO. One of these ISOs has long been implemented in BAZNAS, long before I became chairman. When I joined BAZNAS as chairman, we went ahead and added more ISOs. We apply the most up-to-date ISOs and every year we maintain it, but we are still not satisfied. We also apply ISO to other aspects such as ISO anti-bribery and information security. We also initiated and implemented the Zakat Core Principles (ZCP). This is the work of BAZNAS in collaboration with Bank Indonesia and the Islamic Development Bank (IsDB), which were adopted by member countries of the World Zakat Forum (WZF). We have learnt that BAZNAS entered into a partnership with UNICEF to mobilise zakat funding for helping children affected by humanitarian crises, both in Indonesia and in the member countries of the Organisation of Islamic Cooperation (OIC).

 Can you briefly relate what has been done in this respect and what do you hope to achieve in the future?

Professor Bambang Sudibyo:

 The global partnership that we are doing is not only with UNICEF, as the earlier one was with UNDP. We worked with UNDP to build a micro-hydro power plant in the interior of Jambi Province. The collaboration between BAZNAS, UNDP and Bank Jambi has been successful, and now the local government has created a popular tourist destination, where previously there was no electricity for decades.

Now we continue to collaborate with UNDP, and still have an ongoing joint project. Recently, we built cooperation at the World Zakat Forum (WZF) level by inviting UNDP and UNICEF to become members of the WZF association. This became possible because of BAZNAS’s leadership in WZF. BAZNAS has initiated many educational programmes such as BAZNAS Scholarship Institutions, BAZNAS Scholar Schools, and others. Before I joined BAZNAS, there was already a scholarship programme, but I then expanded it for all school levels from elementary to high school and the government made it free. However, scholarships are more useful to be given to students in higher education. So we focused on scholarships for colleges and it worked. We not only provide scholarships for students in the country but also for students who study abroad as well as for Quran memorisation students in collaboration with the Sulaimaniyah Foundation from Turkey.

You have recently been honoured at the 10th Global Islamic Finance Award for your leadership role in the advocacy of zakat. How will this achievement shape your personal focus and your professional commitment?

Professor Bambang Sudibyo:

We thank all parties involved, for the GIFA award. This is following BAZNAS’s vision, which is to become the best and the most trusted zakat manager in the world, and finally that vision came true when we won the GIFA. The awards that BAZNAS receives at the international level every year, prove that this vision is not nonsense, but real. This also encourages the progress and leadership of BAZNAS at the World Zakat Forum to be increasingly felt. As a result, we were quite successful in the leadership of WZF, which is also recognised by all WZF member countries. When I proposed the name of Mr Zainulbahar Noor to be my replacement at WZF, even though I was no longer the Chairman of BAZNAS and the secretary-general of WZF, there was no rejection. This shows our successful leadership of WZF. I think that my background as an accounting professor and also as a former Minister of Finance of the Republic of Indonesia is also an influence. For example, the success of BAZNAS in having a large building is due to my lobbying with the government. One of the ways I did this was through approaching the current Minister of Finance, namely Professor Bambang Brodjonegoro as a former Minister of Finance and got a quick response. Now BAZNAS has its own office, which is a nice big building.

Professor, you are undoubtedly a great leader with millions of people following you not only in Indonesia but also outside your country of birth and residence. Our readers will certainly benefit to learn about your habits, daily routine and the factors that have led you to such an important leadership position.

 Professor Bambang Sudibyo:

Alhamdo lillah, I am one of the lucky people to get a good education. Domestically, I studied at Gadjah Mada University (UGM), a national university, which is now one of the best-ranked universities in the world, followed by the University of Indonesia (UI) and the Bandung Institute of Technology (ITB). The faculties also got an international accreditation from the Association to Advance Collegiate Schools of Business (AACSB). The AACSB is the world’s most prestigious business education rating agency, based in the United States. One of the pioneers of the international accreditation from AACSB is me as a lecturer and professor at the UGM Faculty of Economics and Business (FEB). FEB UGM is the first business school to successfully obtain this accreditation. I am fortunate to have achieved all this. Alhamdo lillah, I was also able to get a master’s and doctoral education in the US, and after returning home I served as a lecturer at UGM. Then I was appointed as Minister of Finance and also the Minister of National Education. This has certainly contributed significantly to my journey. When I became the Minister of National Education, I signed a professor’s decree (SK) for Professor Budiono. He was my lecturer, but I first reached the title of a professor. Later, he was elected as the Vice President of the Republic of Indonesia.

“THIS IS FOLLOWING BAZNAS’S VISION, WHICH IS TO BECOME THE BEST AND THE MOST TRUSTED ZAKAT MANAGER IN THE WORLD, AND FINALLY THAT VISION CAME TRUE WHEN WE WON THE GIFA”

Besides that, I am also active as an administrator in the Muhammadiyah Central Leadership (PP). For four years I was a treasurer of the PP Muhammadiyah. Then for 10 years, I was one of the heads of the economic and community empowerment sector during the leadership of the General Chairperson of PP Muhammadiyah held by Professor Din Syamsuddin. So I am also a Muhammadiyah activist and of course it has had a big influence on my career path. Then, I became a member of BAZNAS. I never wanted to become a member, but because I was asked by an official from the Ministry of Religion, Mr Fuad Nasar, who came to my house and asked me to register as a candidate for BAZNAS with the hope that I could fix the organisation. Finally, I passed and was then elected Chairman.

As an influential leader in Indonesia and globally, what is your take on the leadership crisis in the Muslim world?

Professor Bambang Sudibyo:

I don’t see a leadership crisis. Maybe what exists is a crisis of Islamic leadership such as in the Middle East that cannot get along and so on. In Indonesia, there is no problem. Alhamdo lillah, the President of Indonesia has always been a Muslim and this has always been going well. If there are dynamics, this is common in politics, but that doesn’t mean there is a leadership crisis. I don’t see a crisis now, as President Jokowi’s leadership is pretty good. In Islamic leadership in Indonesia, moderate leadership wins. This moderation is a hallmark of the two largest organisations in Indonesia, namely Nahdlatul Ulama (NU) and Muhammadiyah.

 Why is sustainability becoming an important component of strategic thinking for the leaders of today? How is BAZNAS playing its part in achieving the UN’s SDGs?

 Professor Bambang Sudibyo:

Sustainability is important, because leadership must be able to continue, for what has been achieved must not diminish. Leadership without sustainability can not achieve its ultimate goal. So when I learned that I would no longer be WZF secretary-general, because I was not the Chairman of BAZNAS, I prepared a replacement candidate. Of course, I chose someone I knew very well, namely Mr Zainulbahar Noor, because I have an interest in the leadership sustainability at WZF, so that he can continue what I have started.

 Professor, you have had a long and illustrious career spanning over decades. Would you care to share with our readers, especially the youth, what have been some of the challenges that you have come across in your career?

 Professor Bambang Sudibyo:

There were a lot of challenges. When I went to college to take a master’s programme in the US, my scholarship was indefinitely delayed. My wife had to work so that I could survive and stay there for one semester. For several years after I finished college, I could not receive my scholarship money. There was obviously a bureaucratic delay. Thankfully I got my scholarship money when I finished my PhD. Because of that I was able to buy a new car with the scholarship money that was delayed for a long time. I also had a big challenge when I became the Minister of Finance during the crisis in the late 1990s. Due to the monetary crisis, I had to rehabilitate all the troubled banks and had to finish it in no time. Alhamdo lillah, I was able to succeed. Likewise when I became the Minister of National Education, I was the minister who allocated 20% of the education budget from the state budget for the first time. So the budget for the Ministry of National Education at that time became enormous. I also prepared a good budget plan. Among other things, I created the School Operational Assistance (BOS) programme. BOS is transferred directly from the state treasury to school accounts without going through local government accounts. In this way, the chances of corruption are very minimal.

As the Secretary General of the World Zakat Forum, how do you perceive the world changing in the post-COVID-19 era and what role can zakat play in sustaining an Islamic economy?

 Professor Bambang Sudibyo:

Islamic economics consists of many dimensions. There are commercial Islamic economies such as Islamic banking, Islamic insurance, and Islamic capital markets. Then there are also halal products and the real sector. But there is also an Islamic economy that is social such as zakat, infaq, alms, and waqf. Alhamdo lillah, in the world of zakat, we manage it well. So that the annual growth is also very good. Meanwhile, until now, waqf has not been as good as cash waqf. If the cash waqf authority is handed over to BAZNAS, I am sure that we can raise a large number of waqf funds, because waqf is an perpetual charity, so it is easier to sell. Later there was a suggestion that the BAZNAS and the Indonesian Waqf Board (BWI) be merged. Now at WZF there is a desire that the forum should not only consist of zakat organisations but also waqf bodies. And at the last WZF international conference, it was agreed that the forum will also accommodate waqf institutions. For the handling of the COVID-19 pandemic, zakat is very reliable as a solution. Today many people suffer not only from a health perspective but also economically. They were affected, as lot of people lost their jobs and income, and BAZNAS mobilised all regional BAZNAS and non-governmental amil zakat institutions (LAZ) to help the victims of COVID-19, both in the form of health and economic donations. And this was a success. We made it a topic at the WZF international conference and discussed the role of zakat during the pandemic and the solution for people and the world community.

At the end, what is one piece of advice you would give to an aspiring leader?

 Professor Bambang Sudibyo:

Zakat is the third pillar of Islam, it is very important to be realised. And in the Quran, the commandment of zakat always coincides with the commandment of prayer. This means that establishing a relationship with Allah (hablun min Allah) must be proven by building a relationship with humans (hablun min al-nas). Success with the hablun min al-nas must be reflected in the success of the hablun min Allah. By fulfilling zakat obligations and managing zakat properly, we can help our brothers and sisters who need donations so that the gap between rich and poor can be moderated. For those who have the opportunity to do good, this is a golden opportunity. So make the best use of this opportunity, so that we can help improve the world’s economic and social situation. Also so that togetherness among people becomes more real. Therefore, it is necessary to apply modern strategies on a large scale in zakat management. It is impossible to manage zakat only with fiqh competence. There must be a balance of fiqh competence and modern management competence. Fiqh mastery and modern management must be optimal. If you want to be successful as a zakat institution in the world, you must do it.

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