Zakah is an important ethico‐economic institution in the Islamic code of life. It provides a mandatory mechanism for sharing societal resources in a Muslim community. It redistributes income and wealth, plays an important role in poverty alleviation, and thus can contribute to grassroot development. This paper analyzes Zakah's role in this context, and suggests how this institution can be made an instrument of self‐reliance and sustainable development of those who live below the poverty line. By transforming Zakah from a simple relief mechanism into a strategic tool for economic empowerment, the author argues that Muslim communities can foster a more equitable society and reduce long-term dependency on external aid.

Core Concepts: Zakah, Ethico-Economics, Poverty Alleviation, Wealth Redistribution, Self-Reliance, Grassroot Development, Sustainable Economics, AUB.