ISLAMIC ECONOMIC APPROACH AS AN ALTERNATIVE PARADIGM: REALIZING WELFARE AND SOCIAL JUSTICE IN THE ERA OF GLOBAL INEQUALITY

Abstract

Global economic inequality has become a pressing issue, as conventional economic systems often prioritize growth over equitable wealth distribution, leaving marginalized populations vulnerable. Islamic economics offers an alternative paradigm that integrates ethical principles, social justice, and welfare-oriented financial mechanisms to address these disparities. This study aims to systematically analyze the role of Islamic economic instruments in promoting social justice and reducing inequality. A Systematic Literature Review (SLR) was conducted using the PRISMA framework, reviewing 21 selected studies published between 2016 and 2025 from international and national academic databases. The analysis focuses on key instruments, including zakat, waqf, Islamic microfinance, and macro-level financial inclusion. The results indicate that zakat and waqf significantly contribute to poverty alleviation and sustainable development, while Islamic microfinance empowers economically marginalized communities by enhancing financial access and independence. Macro-level Islamic finance further supports inclusive economic growth and aligns with the Sustainable Development Goals (SDGs). The discussion highlights both the effectiveness and challenges of these instruments, emphasizing the need for robust governance, regulatory support, and financial literacy programs. In conclusion, Islamic economics provides a holistic and ethical approach to address global inequality, offering policymakers and practitioners practical strategies for achieving inclusive and sustainable economic development.