Modeling Poverty Alleviation in Indonesia according to Ibnu Khaldun Philosophy (an approach to morality in the Qur’an)

Abstract

The poverty problem is a multidimensional discourse. The debate about poverty and how to exterminate it has been carried out for many years. This is important because the problem of poverty can have implications for social, economic, and political problems in society. In fact, in the hadith the Prophet Muhammad SAW stated that "Poverty (Poverty) is close to kufr". In Islamic history, one scholar who discussed poverty was Ibn Khaldun. Referring to the socio-economic dynamics theory compiled by Umer Chapra based on Ibn Khaldun's thoughts in his "eight wise principles" or Hikammiyah sentences, Ibn Khaldun views poverty as not only caused by economic factors but also influenced by multidimensional non-economic aspects (morality). This study aims to observe the influence of Ibnu Khaldun's social-economic dynamics, such as government spending in the social sector, corruption, human development index (HDI), Gross Regional Domestic Product (GRDP), Foreign Direct investment (FDI), and Gini ratio over poverty rates in Indonesia. This study used modeling using the static panel data regression method with the Generalized Method of Moments (GMM) approach. Based on panel data analysis which includes data from 34 provinces in Indonesia for the 2018-2022 period, it was found that the variables of government spending in the social sector, corruption and Gross Regional Domestic Product (GRDP), significantly affect the poverty rate in Indonesia. Meanwhile, the variables Human Development Index (HDI), Foreign Direct investment (FDI), and Gini ratio have no effect.