I’d recommend against thinking along the lines of what Muslim wealth would have to be to make the 1tr figure plausible, given that the figure seems to be made up. But I definitely agree with the idea of forming multiple estimates using different approaches.
Some ideas for getting a good figure:
The combined GDP of Organisation of Islamic Cooperation countries is 10tr, about 10% of global GDP. This does not include most muslims in countries where they are a minority (importantly, India, Europe and North America) but it does include non-muslims in OIC countries
Straight off the bat we can see that $1tr is implausible.
If we assume that OIC countries have 10% of global wealth, this would be $40-70Trn according to your estimate. This implies $1-1.75bn of wealth eligible for Zakat.
Where is all that wealth? Given that, as you say, a big chunk of wealth is help by the top 1%, I would guess that most of the wealth is in shares of companies, plus property and other physical assets. The value of such assets can easily be hidden or obfuscated by those who do not wish to pay Zakat on it.
It seems like Zakat is enforced by law in Saudi, and collected & used by the state(!) [source 1, 2]. So the $18bn figure is probably quite reliable.
Saudi GDP is about 1% of global GDP. Assuming Saudi therefore has 1% of global wealth (probably an underestimate because oil), and that 20% is a hard limit on the share of global wealth owned by muslims, I would guess 20*$18bn = $360bn is a very hard upper limit on global Zakat
More realistically I would assume that 10% of global wealth is owned by Muslims eligible for Zakat and that payment rates outside of Saudi are much lower—I’ll say 75% lower[1]. Then global Zakat would be $18bn*(1+9*0.25) = $85.5bn
Importantly, it seems like Zakat paid in Saudi is not influencable as it is kept by the state. Therefore my best estimate of the amount of influencable Zakat is $67.5bn worldwide.
As a sense-check: where are the Gaza billions? The war in Gaza was a huge huge issue in the Muslim world this past Ramadan, and presumably a lot of Zakat donations went to helping Gazans. If it was ins the tens or hundreds of billions (ie at least 10% of $200+bn), that would be $10,000s for each person in Gaza, which should be easy to spot. But it is not coming up in some brief googling.
I imagine the main factors are (1) simply underpaying or not paying because it must hurt to give away 2.5% of one’s wealth each year and (2) fudging by underrating one’s wealth (not counting or being naive about the value of one’s house, livestock, car etc.)
I haven’t done any enough research to know how much this would affect the estimates but I do want to point out that zakat is calculated on wealth, and wealth is not the same thing as GDP (maybe you’re already aware of this and think that GDP is a good enough proxy to estimate wealth).
Thanks for sharing your calculations!
I’d recommend against thinking along the lines of what Muslim wealth would have to be to make the 1tr figure plausible, given that the figure seems to be made up. But I definitely agree with the idea of forming multiple estimates using different approaches.
Some ideas for getting a good figure:
The combined GDP of Organisation of Islamic Cooperation countries is 10tr, about 10% of global GDP. This does not include most muslims in countries where they are a minority (importantly, India, Europe and North America) but it does include non-muslims in OIC countries
Straight off the bat we can see that $1tr is implausible.
If we assume that OIC countries have 10% of global wealth, this would be $40-70Trn according to your estimate. This implies $1-1.75bn of wealth eligible for Zakat.
Where is all that wealth? Given that, as you say, a big chunk of wealth is help by the top 1%, I would guess that most of the wealth is in shares of companies, plus property and other physical assets. The value of such assets can easily be hidden or obfuscated by those who do not wish to pay Zakat on it.
It seems like Zakat is enforced by law in Saudi, and collected & used by the state(!) [source 1, 2]. So the $18bn figure is probably quite reliable.
Saudi GDP is about 1% of global GDP. Assuming Saudi therefore has 1% of global wealth (probably an underestimate because oil), and that 20% is a hard limit on the share of global wealth owned by muslims, I would guess 20*$18bn = $360bn is a very hard upper limit on global Zakat
More realistically I would assume that 10% of global wealth is owned by Muslims eligible for Zakat and that payment rates outside of Saudi are much lower—I’ll say 75% lower[1]. Then global Zakat would be $18bn*(1+9*0.25) = $85.5bn
Importantly, it seems like Zakat paid in Saudi is not influencable as it is kept by the state. Therefore my best estimate of the amount of influencable Zakat is $67.5bn worldwide.
As a sense-check: where are the Gaza billions? The war in Gaza was a huge huge issue in the Muslim world this past Ramadan, and presumably a lot of Zakat donations went to helping Gazans. If it was ins the tens or hundreds of billions (ie at least 10% of $200+bn), that would be $10,000s for each person in Gaza, which should be easy to spot. But it is not coming up in some brief googling.
I imagine the main factors are (1) simply underpaying or not paying because it must hurt to give away 2.5% of one’s wealth each year and (2) fudging by underrating one’s wealth (not counting or being naive about the value of one’s house, livestock, car etc.)
Yeah the assumption the author makes about Muslim wealth make no sense to me. One can actually look up the GDP of these countries!
I haven’t done any enough research to know how much this would affect the estimates but I do want to point out that zakat is calculated on wealth, and wealth is not the same thing as GDP (maybe you’re already aware of this and think that GDP is a good enough proxy to estimate wealth).