Implementation of Islamic Economic Systems in Poverty Reduction (Case Study in Sorong City, West Papua, Indonesia)

The evaluation of the poverty alleviation program in Sorong City has not been carried out optimally. This can be seen from the percentage of poor people since 2015 which has only decreased by 0,07% -1,93% per year even in 2016 it has increased by 0,29%. The implementation of the program has not been effective due to the lack of optimal management of funds as a special autonomous region and the limitations of social assistance funds in the Local Government Budget (APBD). Therefore, other sources of assistance are needed that can be used as a driver of poverty alleviation. One of them is through zakat, infaq, shodaqoh, and waqf (ZISWAF) which was adopted from the Islamic economic system. This study examines the application of Islamic economics in improving the welfare of the population in Sorong City, especially the poor. The research was conducted based on statistical data related to poverty and the Gini ratio from the Statistics Indonesia (BPS), APBD, and ZISWAF funds from the National Amil Zakat Agency (BAZNAS) in Sorong City. With the acceptance of ZISWAF, the high income of the community will be distributed to the low society so that it can improve welfare.


INTRODUCTION
In recent years, the poverty reduction in Indonesia has not shown a significant movement 1 . The condition of poverty in Indonesia is still characterized by inequality between regions which is marked by the high difference in poverty levels, achievement of development outcomes, access to basic services, quality of work, income levels both in rural and urban areas, between regions, between regions and underdeveloped or border areas. The graph below shows that according to BPS data for 2019, poverty in Indonesia is still concentrated in eastern Indonesia such as Papua (27,53%), West Papua (22,17%) and NTT (21,09%) 3 . 1   One of the regions in West Papua, Indonesia, is Sorong City. Until 2020, the Sorong city is still faced with the problem of high poverty. This can be seen from BPS data regarding the percentage of poor people in Sorong City which in 2019 was recorded at 15,45% or as many as 39,02 thousand people. Based on the Table 1, since 2015, the slowdown in poverty reduction is still low because the percentage of poor people has only decreased in the range of 0,07% -1,93% per year, even in 2016 it experienced an increase of 0,29%. The large composition of the poor indicates an imbalance between the poor and the rich. This measure of inequality is called the Gini ratio. 4 Ibid. 5 BPS of Sorong City. https://sorongkota.bps.go.id/ (Friday, 13 November 2020) The Gini ratio for the City of Sorong was 0,33 in 2018 and 2017, while in 2016 it was 0,30. This figure shows that the distribution of income in Sorong City is quite unequal. The poverty gap makes a large part of total regional income only enjoyed by the rich. If income distribution efforts are not made, the resulting inequality will get worse. The rich are getting richer and the poor are getting poorer.
Various efforts to reduce poverty continue to be carried out by the government in order to get the poor out of poverty. Coordination Team (TKPK). Through this institution, it is hoped that the development funds disbursed from the the state budget (APBN) and APBD will be on target to alleviate poverty. The funding allocated to run programs managed by TKPK comes from the APBN or APBD 9 . The source of these funds is limited. The ratio of national spending for social assistance is Rp7.305.000.000 or only 8 https://djpk.kemenkeu.go.id (Friday, 20 November 2020) 9 Presidential Regulation (Perpres) No. 15 of 2010 0,71% of the total APBN. Of the total province, the total regional expenditure for social assistance is Rp3.607.000.000 or 1,28% of the total Provincial APBD. The average regional expenditure ratio at the provincial level for social assistance is only 0,59% of the APBD.
Therefore, in order to overcome the suboptimal absorption of special autonomy funds and the limited social assistance funds, other sources of funds are needed to assist poverty alleviation programs 10 . The sources of funds in the Islamic economic system that allow for allocation are funds originating from the payment of zakat, infaq, shodaqoh, and waqf. In this scientific paper, researchers will examine how the application of the Islamic economic system, especially in terms of zakat payments, collection of infaq, shodaqoh, and waqf in improving welfare in Sorong City.

LITERATURE REVIEW
In terms, zakat is part of assets with certain conditions which are required by Allah SWT to the owner to be handed over to those who are entitled to receive it. In general, zakat can be formulated as part of the assets that must be given by every Muslim who meets certain 10 Zainal Alim Adiwijaya & Edy Suprianto. "Good governance of zakat institutions: A literature review." Journal of Southwest Jiaotong University 55 no.2 (2020), 1-7 conditions 11 . Meanwhile, shodaqoh comes from the word sadaqah which means true. According to the term or terminology of sharia, shodaqoh giving is the issuing of a portion of assets or income or income for an interest ordered by religion. Waqf is a sunnah practice and can become mandatory if it is made with a will. Waqf is the giving of property or property owned by someone to another person in general or specifically 12 .
There have been many studies that state that the Islamic economic system can be a reference in running the economy of a country. One example of Islamic economic practice that has developed around the world is the zakat system. Zakat has been recognized as a system of income redistribution and empirically can improve welfare and reduce poverty. These activities constitute obligatory worship and sunnah (recommended) as purification of the wealth of the giver.
Islamic economics does not arise from the urge to correct economic imbalances, injustice, and Because Islamic economics was developed to serve cultural and political purposes, it does not have to meet scientific standards of coherence, precision, or realism. Until now, the most basic of the characteristics of Islamic economics is the prohibition of the application of the interest system 14 . Islamic economists believe that zakat can be a more effective weapon against poverty and inequality than the redistribution instruments used by the modern state, considering that the payment of zakat is voluntary 15 .
The productive waqf is a gift in the form of something that can be cultivated or rolled out for the good and benefit of the people 16  contribute to increasing poverty and alleviating poverty 22 .
Next, to increase ZISWAF acceptance, efforts are needed to increase donors or ZISWAF givers (Muzakki). One of which is the Dompet Duafa program. The marketing strategy and series of activities used by the Dompet Dhuafa in terms of muzakki trust and increasing donations each year use a model which is a marketing theory, which is emphasized on the following points: a situation related to where and how an institution or agency is, then objective, which is related to the vision and mission, and achievement targets of an institution 23  is an increase in Muzakki's trust in Dompet Dhuafa.

METHODS
This research was conducted at the city level. The data used are city distribution data from BPS and the Integrated Database of TNP2K as well as Sorong City Zakat Statistics data issued by BAZNAS of Sorong City. The data used are data related to poverty and reports of ZISWAF revenue and distribution from 2015 to 2019.
The analytical method used is descriptive analysis on the available variable data. Descriptive analysis was conducted to determine data distribution patterns and comparisons between villages. This aims to obtain in-depth information regarding the potential of ZISWAF in Sorong City in order to reduce poverty and improve community welfare.

RESULT AND DISCUSSION
In Islam, zakat is one of the obligations that must be carried out by every Muslim. As for charity is part of generosity in the context of Muslim society as a form of gratitude for Allah's blessings that have been given to him so that a servant is willing to set aside a portion of his assets for religious purposes both in the context of helping others and the struggle for Islamic da'wah.
The management of shodaqoh is the same as the management of zakat, but the distribution of shodaqoh is not the same as zakat 25 . The distribution of zakat has been determined to who has the right to receive it, while shodaqoh are given to things of a social nature, such as helping victims of natural disasters, providing compensation to orphans, providing assistance to underprivileged children for school, and other social activities. Apart from zakat and shodaqoh, the existence of infaq and waqf also has great potential in increasing welfare and reducing poverty 26 .

The Potential of ZISWAF in Improving Welfare and Reducing Poverty
Researchers analyzed the potential for the application of Islamic economics in optimizing the collection and distribution of ZISWAF to strengthen the economy of the City of Sorong and to help accelerate poverty alleviation programs. So far, the Islamic economic system is still focused on the concept of riba liberation and the Islamic banking system 27 . 25  Meanwhile, the focus of the development of the application of Islamic economics can be seen from three aspects, namely banking and finance; ZISWAF; and Islamic political economy 28 .
ZISWAF is expected to minimize the income gap between rich and poor people. Besides, ZISWAF is also expected to improve the economy of the population or household, community, even nationally.
Based on data released by BPS, in 2018 the composition of the Muslim population was 46,54% of the total population of Sorong City. By not combining the percentage of Protestant Christians (44,46%) and Catholics (8,16%), Islam is the religion of the majority of the population of Sorong City. Thus, it can be assumed that at least 40% of the total population of Sorong City is a donor in collecting ZISWAF. Besides, the distribution is not limited to one particular district but can reach all districts in Sorong City.
Based on Law no. 38 of 1999, the official zakat management organization in Indonesia consists of the Amil Zakat Agency (BAZ) which was formed by the government (at the central, provincial, and district/city levels), and the Amil Zakat Institution (LAZ) which was formed by the community and received approval 28 Sri Abidah Suryaningsih. "Women Workers and Professional Zakat Literations." IQTISHODUNA: Jurnal Ekonomi Islam 9 no. 2 (2020), 247-258. from the government. Currently there is only BAZNAS as a nonstructural government institution that can professionally manage ZISWAF in Sorong City.
The funds collected from ZISWAF have the potential to be a solution to solving community welfare problems. Based on data collected in 2018, the ZIS (zakat, infaq, and shodaqoh) collected at BAZNAS Sorong City was Rp2.310.044.334. This amount is obtained by adding zakat fitrah, zakat mal, infaq, and sadaqah. The funds that come from zakat fitrah are obtained by adding up zakat fitrah funds in the form of money and zakat fitrah funds in the form of rice with the assumption that the price of rice is adjusted to BPS data of Rp12.106/kg.  The most widely collected source of ZIS comes from zakat fitrah, which most likely comes from 40% of the population groups who have the highest income, especially those who are Muslims. The total zakat fitrah collected in 2018 was Rp1.046.575.000 for cash and 28.239 kg for rice.
The growth of ZIS proves that the participation of the Muslim community in this kind of fund has increased from year to year. Very fast growth occurred in 2016, it's about 23% from the previous year. 30 BAZNAS of Sorong City The average growth rate based on ZIS from 2012 to 2018 was 12,37%. This ZIS growth is higher than the economic growth of Sorong City, which decreased during the 2014-2018 period. Therefore, with the economic capacity of the Muslim community increasingly civilized, optimizing the Islamic economic system in Sorong City will ultimately continue to encourage growth in ZISWAF in the following years.   From the Figure 1, we can see that the achievement of the reach of zakat distribution in the city of Sorong was the highest in 2015. Although in the following year there was a decrease in the affordability of zakat distribution, 32 BAZNAS and BPS of Sorong City the decline occurred no more than 10% per year and in 2018 there was a sufficient increase significantly about 7%.
Next, in line with data in the Integrated Database, the number of poor people with the lowest 10% welfare level in Sorong City is 1.177 people or 204 households. If the ZIS distribution uses a household approach that includes the poor, then the distribution of zakat in Sorong City has been felt almost 100% by the poor with the lowest 10% welfare level.

Strategic Steps to Increase ZISWAF Participants
The source of funds which come from zakat, infaq, shodaqoh, and endowments can be a promising alternative to alleviate poverty in Sorong City. Therefore, there are at least five strategic steps that can be taken.
First, mobilizing massively to all Muslim communities in Sorong City to distribute ZISWAF to BAZNAS institutions or ZISWAF collectors which are coordinated with BAZNAS. This raising consists of two stages, namely (1) public education on the concept of zakat, and (2) an invitation to distribute ZISWAF to BAZNAS by aggressively disseminating the benefits of distributing ZISWAF to BAZNAS.
The second step is to strengthen the legitimacy of zakat channeling institutions from the national level to the districts/cities. The role of the government, in this case, is very strategic to create a clear legal umbrella and fully support the distribution of ZISWAF through BAZNAS. There needs to be political support from every political institution in initiating the formation of this policy design.
The third step is to improve the internal performance of BAZNAS itself. There needs to be an increase in facilities at BAZNAS that make it easier for people who want to distribute their ZISWAF, for example, the establishment of BAZNAS at the village level and the use of smartphone applications.
In the fourth step, BAZNAS is encouraged to innovate the allocation of funds which is not merely social assistance but productive assistance. ZISWAF funds are very strategic to improve the working climate of indigenous people, especially those who are Muslims, to boost their skills in doing business, especially at MSMEs.
The fifth step in this regard is at the international level, namely by intensifying the "ZISWAF Global" concept in the world. Indonesia has become a pioneer of "ZISWAF Global" by conducting international cooperation with Islamic countries in the world to form a global standard on ZISWAF. Developed countries such as Qatar, UAE, Brunei, and others are expected to help third-world countries such as Indonesia, Pakistan, Bangladesh, and others. If initially, ZISWAF aims to narrow the Gini ratio at the national level, then it is hoped that