INCEIF

THE GLOBAL UNIVERSITY IN ISLAMIC FINANCE

PHD PROGRAM

WAQF CONTINUED RELEVANCE AS THE THIRD SECTOR

IN TERMS OF MOBILIZING RESOURCES FOR

PRODUCTIVE USE IN AN ISLAMIC ECONOMIC SYSTEM

ISLAMIC CAPITAL MARKET – FN 6603

SEMESTER SEPT 2009

Name: Ariffhidayat Ali

Matric No: 0900320

ABSTRACT

The Quran reveals inasmuch as it hides. It reveals to us Allah as the

Almighty, it is clear on treatment of our fellow man and our treatment the

external environment including economic resources.

With regards to muamalat, the unfathomable wisdom of Allah has rendered

mankind guidelines (within the rules permissibility reign). To show Allah’s

love for mankind Allah sent down the practical example namely the Prophet

s.a.w. Thus the theory and practice is perfected. Based on the two sources,

we apply our limited reasoning in deriving decisions and actions to be put in

place. Thus usul al-fiqh points the way to fiqh. The term ‘ijtihad” is often

applied as the exertion that we make to arrive to a particular decision

especially with regards to matters of law.

The concept of “charity” or “benevolent” gives rise to several implements in

Islam. It range from the wajib (“zakat”) to the mustahabb (favoured).

Concepts such as sadaqah and the subject matter at hand i.e. waqf.

Fundamental to applying waqf, is our foremost recognition that all belongs

to Allah. Thus waqf is an instrument seeking Allah’s pleasure thus deserving

of reward. The institution of waqf in Islamic history similar to the religion

has gone through its rise and decline. Present focus on waqf is

overshadowed by focus on Islamic banking and finance. It remains relevant

within the Islamic economic system (which is grounded in the Islamic

Worldview), this paper will emphasized this, it faces challenges to be

elaborated, and it necessitates innovation. The paper will discuss this in

both the Malaysian and the global context.

Key Terms: Al Quran, Sunnah, Shari’ah, Fiqh, Ijtihad, Charity,

Muamalat, Legal, Property, Innovation, Islamic Economics and Islamic

Worldview.

(i)

TABLE OF CONTENTS

Pages

Abstract (i)

Part 1:- Islam as a Comprehensive Gift to Mankind

a) Islam as Religion 1

b) The Notion of Comprehensiveness 2

c) The Gift to Mankind 3

Part 2:- All Economics are derivatives of Reason and Ijtihad

a) Modern Economics as derivatives of Reason 5

b) Islamic Economics as derivatives of Ijtihad 6

c) The Shariah and the “Maqasid” 7

Part 3:- The Essence of Waqf

a) Definition, Motive and Origins 8

b) Constitution of Waqf 10

c) The Current State of the Ummah and 15

Current pre-occupation with Islamic Banking and Finance

Part 4:- Mobilizing resources via the Institution if Waqf

a) Examples from various Muslim countries 16

b) Trends detected in countries cited 21

c) On-going challenges to Waqf 22

C-1:- The Role of Government and Regulators 23

Part 5:- Conclusion 24

Bibliography B1 – B3

Important Note:- All Quranic quotes are denoted by Q followed No.

(Surah) and No. (Ayah). Example Q 2 -36 means Al-Baqarah Ayah 36

Part 1:- Islam as a Comprehensive Gift to Mankind

a) Islam as Religion

From Dictionary.com religion is defined as a set of beliefs concerning the

Cause, nature, and purpose of the universe, esp. when considered as the

creation of a superhuman agency or agencies, usually involving devotional

And ritual observances, and often containing a moral code governing the

conduct of human affairs.

Literally the word Islam conjures multiple meanings such as peace,

submission; total surrender of oneself to God (Allah) and put together gives

meaning “peace acquired by submission to the will of God (Allah)”.

Thus peace is contrasted to a state of war/chaos and this peace is not of the

present only but also of the afterlife. Submission and total surrender is

contrasted to false, temporary surrender or surrender with conditions. The

will of Allah is to be contrasted to the free will of Man or any other will (anti-

God) that may have misguided Man. This will if approached in the legal

context renders man subject to duties, obligations, actions that carries

positive, neutral, negative (rewards and punishments). The will of Allah also

entails that accountability for action may be extracted from us in the

present lifetime or in the afterlife.

This will personifies itself into the two primary sources of Islamic law (the

“Shari’ah” literally meaning “the path to water”). The sources are the Al-

Quran and the Sunnah/Hadith of the Prophet Muhammad s.a.w.

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b) The notion of Comprehensiveness

The notion of comprehensive entails comprehension and/or understanding.

This is crystallized in the first revelation to the Prophet s.a.w. Without

understanding and/or knowledge the comprehensiveness of Islam cannot be

attained by mankind.

Q 96-1~3:-Proclaim! (Or Read!) In the name of thy Lord and

Cherisher, Who created man, out of a (mere) clot of congealed

blood. Proclaim! And thy Lord is Most Bountiful, He Who taught

(the use of) the Pen, Taught man that which he knew not.

Besides the initial demand of knowledge/understanding, comprehensiveness

entails multi-dimensional facets in terms of originality, verifiability,

applicability, immutability and transcends all boundaries.

In discussing originality, Islam traces its routes to the Creator (Allah) who

created was is now, what has become, what will be in the future and is the

owner of all. The challenge to the disbelievers to produce a Surah identical

to one of the Al-Quran is the test of originality of Islam.

Comprehensiveness does not entail completeness at the most minute level

but it entails coverage of the relationship between the Creator and Man,

relationship between Man and his inner faculties (body, mind and spirit),

relationship between Man and other men (family, social) and relationship

between Man and the environment (other creations of the Creator).

The above covers our whole existence prior to conception till the Day of

Judgment as per what is now believed to be the last Ayahs revealed to the

Prophet s.a.w.

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Q 2-281:- And fear the Day when ye shall be brought back to Allah.

Then shall every soul be paid what it earned, and none shall be

dealt with unjustly.

c) The Gift to Mankind

What makes us so deserving of a gift, the whole reason remains with Allah

but since the gift is clear, it create certain obligations on us and one of it is

to relief the hardship of our fellow men. The prevalent term being used is

“charity” and Islam has elevated “charity” to such a high-level namely the

obligatory (zakat), the recommended (mandub) as per the following:-

Q 5-55:- Your (real) friends are (no less than) Allah, His

Messenger, and the (fellowship of) believers, - those who establish

regular prayers and regular charity, and they bow down humbly (in

worship).

The importance of charity is related to the given human

condition, each of us is endowed with differing qualities,

attributes, skills and dispositions. This is also demonstrated with

regions or geographical having endowed with differing resources

thus giving rise to trade due to the theory of comparative

advantage, specialisation. With time communities with different

level of wealth, economic development became pronounced and

thus the level of inequalities also existed. The history of the

human race has been fraught with struggles over economic

resources or Allah’s bounty.

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Whilst Q 96 1-3 has been viewed as the first revelation, there are

others who opined that Q 96 1-5 as being the first, namely Ayahs

4-5 “Day, but man doth transgress all bounds. In that he

looketh upon himself as self-sufficient”.

The above points to the corruptive influence of economic self-

sufficiency without the realization that the abundance is in itself

a gift from Allah. To subvert what belongs to Allah as belonging to

man who is the caretaker is to be forgetful of our position as “Abd

– servant” and “Khalifah – vicegerent” as appointed by Allah.

Since we are creatures needing reminding, thus the particular gift

of Al-Quran, the Shariah, the Sunnah/Hadith (practices, sayings,

actions, silence, approvals/disapprovals of the prophet). These

are all meant to correct, guide mankind to accept his actual

position in the Universe.

A major point to be stated is that “charity” as stated above should

not be construed as mere hand-outs. The author sees this as

more namely the means of mobilizing resources. Resources

encompass man, the environment, man-made implements,

technology and financial capital. Thus “charity” is to be seen as

the “fishing rod” being given to the fisherman.

Islam itself has become a great leveller in terms of its focus on

economic justice, in terms of redistributing economic resources,

surpluses via encouraging both individual and collective effort. So

much so that the majority of initial converts to Islam were

initially economic disenfranchised and the richer converts gave

up their wealth without much persuasion.

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This model of “selflessness” permeates throughout Islamic

Economics. Contrast this model with the “self-interested” model

of Classical Economics. ‘Selflessness” does not mean surrender to

the will of Allah (for Allah will is unknown, man remains a “free

agent”). Thus the Prophet s.a.w admonished the Bedouin for not

tying his camel. Selflessness entails surplus thus a rich Muslim

is preferred to a poor Muslim.

Part 2:- All Economics are derivatives of Reason and Ijtihad

a) Modern Economics as derivatives of Reason

All branches of modern science derive its foundation from mankind

preoccupation with philosophy. Philosophy is in itself a struggle of man in

rationalizing his own existence, the concept of “self”, quest for “truth”

independent of self, search for an “independent reality”. All of this uses the

faculty of Reason. Much contribution were of Greek origin,

unknown/unrecognized are the contributions of Muslim philosophers,

scientists etc. Throughout the ages economics became its own discipline

bearing contributions of the Mercantilists, Physiocrats, Classical, Keynesian,

Marxist and various offshoots. What remains is a body of knowledge

divorced from religion much like other Western sciences (although there are

some who opined that there remain traces of the Protestant work ethics in

classical economics). However we conclude that present day economics

remains concern with the secular, non religious, pre-occupied with the

earthly life thus the struggle of modern economics in tackling the economics

of externalities, the impact of present day action on future generations and

the focussed on monetary measurement as the only viable measure of

human action.

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b) Islamic Economics as derivatives of Ijtihad

The Al-Quran and Sunnah gave the parameters and guidelines pertaining

conduct within the economic realm. Islamic Economics recognizes the role of

consumers, producers, the government’s role, the role of international trade,

the role of money in facilitating trade, the role of the market, market

imperfections, the price mechanism etc. These activities are to be conducted

within a “riba-free”, maysir-free (speculation) and gharar-free environment.

This remains the model par excellence however the human condition of

varying levels of “taqwa”, the competition from non-Muslims, the disparities

between nations etc does not entail the ideal.

Sait & Lim (2005) cited The Qur’an contains no specific reference to the

endowment (waqf) and its legal parameters have been developed through

centuries by jurists. It is inspired from repetition and emphasis upon

charity within Islam as an act of devotion to God. In the Sunnah, waqf is

seen as a legacy from the tradition of the Prophet Muhammad s.a.w. when

he said: "When the son of Adam dies, all his good deeds come to an end

except three: ongoing charity, knowledge from which others may benefit

after he is gone, and a righteous son who will pray for him." (Sahih Muslim)

‘Ongoing charity’ in the said hadith is the basis of waqf. What developed

since is an institution developed out of “Ijtihad”.

Most scholars define Ijtihad as the effort of a “Mujtahid” to coming to a

decision pertaining to a legal matter by reference to the sources of Islamic

law (the collective term for Islamic law being Shariah, the primary sources

being the Al-Quran and Sunnah) and other secondary sources namely

qiyas, ijma, istihsan , urf etc. Muamalat was ripe for the application

of Ijtihad since Al-Quran did legislate as much in this area. The validity of

Ijtihad is unquestionable (Muaz ibn Jabal case in point).

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The decline of Islam has been commented as related to the decline in Ijtihad.

Perhaps this remains a simplification, the author points towards disunity,

the secular approach of some Caliphs post Ali Ibn Talib, the repression

meted out to scholars and perhaps lack of “religious” leadership who saw

rebellion as a valid weapon against tyranny as opposed to “non-violence”

methods.

c) The Shariah, the Maqasid and Waqf

Shariah is all encompassing; it does not embrace the obligatory only but

also includes the much preferred notion of charity. Interlinking this with

waqf, it is logical that waqf serves the objectives (Maqasid) of the Shariah.

What is more pronounced is that the institution of waqf impacts the three

overriding objectives namely Educating the Individual, Establishing Justice

(Adl’) and Consideration of Public Interest (Maslahah) clearly. In retrospect,

the preferred in Islam impact all three objectives to varying degrees. One

important point that needs pointing out is the various classification of

charitable donations/source of finance in Islamic history. This contrast is

necessary if we deemed waqf as being important. The classifications were as

follows:-

1) Khums (i.e. part of the booties of battles), 2) Fai , 3) Zakaat, 4) Sadaqah, 5) Ushr, 6) Kharaj, 7) Jiisya, 8) Ransom money, 9) Khums of Treasure Trove, 10) Contribution of the Muslims in time of need

More on these are no longer applied and replaced by seignorage (money

creation) and public sector borrowings. (Issues remains with both)

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Part 3: The Essence of Waqf

a) Definition, Motive and Origins

(a1) – Definition

According to What is Waqf? (2007), the word waqf literally means ‘to stop,

contain, or to preserve. In Ahmed (2005), in the context of the Shari'ah, it

implies a form of gift in which ‘the corpus is detained and the usufruct is set

free’. The meaning of 'detention' of the corpus in this context, is its

prevention from being inherited, sold, gifted, mortgaged, rented, lent, and

others. As to the meaning of usufruct, it means its devotion to the purpose

mentioned by the waqif (donor) without, any pecuniary return.

According to What is Waqf? (2007), a Waqf is a voluntary, permanent,

irrevocable dedication of a portion of ones wealth, in cash or others, to

Allah. Once a waqf, it belongs to Allah and the corpus of the waqf always

remains intact.

(a2) – Motive of Waqf

The motive of waqf is always religious. Seven words but to a true Muslim,

this represents his or her entire existence. It does entail achievement of

sorts and the author suggest that the “thought process” of a waqif should

be a subject of further research since charity can take various guises and if

we were to name the likes of affluent Muslims in Malaysia such as Syed

Mukhtar Al-Bukhary, Tan Sri Halim Saad, the notable Razak family all have

foundations to their

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name and yet all have not alienated any of their holdings into a waqf. The

author doubts that this is out of ignorance, out of irreligiousness (the author

does not wish to discuss person/s religiosity). This is perplexing and gives

rise to concerns over the “perception” of wealthy Muslims on the idea

of the “waqf”.

Leaving this aside, waqf is mubah or permissible act, but it must be

remembered, even though waqf is not considered wajib, there is a striking

peculiarity connected to it. The term waqf itself imports religious merit

thawb. The basic for the transaction and consideration for it being thawab

means there is no other human disposition which enjoys this peculiarity.

Waqf refers as a desire to approach Allah.

(a-3) Origins of Waqf

‘What is Waqf?’(2007) outlines the origins of waqf. According to the article,

based on hadith, which was reported by Ibn ‘Umar: ‘Umar acquired land in

Khaibar. He came to Allah’s Apostle (saw) and sought his advice in regard to

it. He said: “Allah’s Messenger, I have acquired land in Khaibar. I have never

acquired more valuable for me than this, so what do you command I do with

it? Thereupon the Prophet (saw) said: If you like, you may keep the corpus

intact and give its produce as Sadaqah. So ‘Umar gave it as Sadaqah

declaring that the property must not be sold or inherited or given away as a

gift. And ‘Umar devoted it to the poor, to the nearest of kin, to the

emancipation of slaves, to wayfarers/guests, and in the way of Allah. -

Sahih Muslim.

The above hadith is believed to set the precedent for Muslims, to popularise

the waqf system for any imaginable shari’ah compliant purpose.

9

Others points towards the Kaabah as the first, others point to the mosque in

Quba’ and we take these multiple claims as signs of where the early

Muslims placed their priorities.

b) Constitution of Waqf

(b-1) Conditions of validity

Muhd Zain (1982) outlines conditions or principles to be adhered to, for

waqf property to be valid. The conditions are per listed below:

• The waqif

The settler waqif must be of full age, sound mind and unrestrained in the

use of his own property. He must therefore, able to understand the effect of

his action, a free man and not a slave.

• Clear intention of waqf

The property must be declared waqf with clear intention. The dedication

may be either oral or written.

It’s sufficient for the settler to indicate his intention to make the property

waqf, and to specify the charitable purpose to which it is to be devoted. It is

generally accepted that this declaration is sufficient in itself the creation of a

waqf and that the delivery of possession to the mutawalli or administration

is not an essential condition of validity

• Predetermined property

According to Osman (2002), Shafie scholars are in consensus regarding the

intended waqf property must be predetermined first before waqf status is

being established. If ambiguities exist or the property cannot be determined

due to certain circumstances, the waqf is considered invalid.

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In Public Trust (Ahmed), there is no doubt that prior to donation the waqf

property is owned by the waqif, because a person cannot make waqf of a

property that he does not own.

The intended waqf property must be tangible. A waqf is also considered to

be invalid if its ownership is not established, such as reserved order, which

has not been received yet by its owner.

An incorporeal right cannot be dedicated as waqf, and for movable property,

if there’s conflict of opinions.

• Perpetuity and Continuity

Majority of scholars agree that the declaration of waqf must be irrevocable,

unconditional, and permanent. If in the case of a testamentary waqf which

takes effect solely upon the death of the founder, the declaration must be

intended to take effect immediately.

According to Ahmed (2005), all schools, with the exception of the Maliki

school, concur that a waqf is valid only when the waqif intends the waqf to

be perpetual and continuous, and therefore it is considered a lasting

charity. Hence if the waqif limits its period of operation, such as when he

makes waqf for certain specified limit time frame or until an unspecified

time when he would revoke it at his own pleasure, it will not be considered a

waqf in its true sense.

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Many scholars agree that such condition implied on the intended waqf,

nullifies the waqf, though it will be considered as valid habs (detention) if

the owner of the property intends habs. But if the owner intends it to be a

waqf, it will be nullify the conditions to be a valid waqf and a valid habs as

well. By a valid habs, it is meant that the usufruct donated by the owner for

a particular object will be so applied during the period mentioned and

return to him after the expiry of that period.

According to the Maliki school, perpetuity is not necessary in waqf and it is

valid and binding even if its duration is fixed, and after the expiry of the

stipulated period the property will return to the owner.

• The object of waqf must be a work pleasing to Allah, although this is not

always apparent on the surface. It must be charitable in general sense.

(b-2) Subject of waqf

Subject of waqf refers to what may be dedicated as waqf. Below are the

subject of waqf as per outlined by Muhd Zain (1982) in his book, Islamic

Law with special reference to the Institution of Waqf:

• Immovable property

All jurists of all schools are in entire agreement as to the validity of waqf as

immovable as illustrated in the early history of waqf institution, where waqf

of land is widely made by the companions of Prophet Muhammad s.a.w.

It’s also lawful to dedicate every movable that may be an accessory to it, as if

dedicating cattle and slaves.

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• Movable property

There are differences of opinions for movable property since the prevailing

view indicates that movable cannot be made waqf because they do not

possess the quality of permanency. Yet, some exceptions had been made

upon movable property beneficial uses such as movables attached to

immovable property. Even it is valid to make waqf of such movables with

respect which had been ‘urf in the society, such as copies of Holy Qur’an,

axe, books or water from a public fountain.

• Undivided property (musha)

Majority jurists agree that the waqf of share in a property, which is

incapable of partition is valid. Waqf of undivided share in a thing, which is

not capable of partition is also considered valid.

The above Fiqh cuts across the following the following time span:-

i) 610 AC – 661 AC (Prophet s.a.w – Ali Ibn Talib leadership)

Contrast the above to the time of the Four Sunni Imams

1. Imam Malik – Maliki school (circa 711 - 795). Locality Madinah.

2. Imam Abu Hanifa – Hanafi school (circa 699 - 765). Locality Iraq.

3. Imam Shafii – Shafii school (circa 767 – 820). Locality (various)

4. Imam Hambali – Hambali school (circa 780 – 855). Locality (Baghdad

although he also travelled extensively)

In the context of muamalat great was the contribution of Imam Hanafi, in

the context of simplicity of approach it was Imam Malik, methodology goes

to Imam Shafie whilst Imam Hambali was overshadowed by Imam Shafie

although remaining steadfast in his treatment/collection of the hadith.

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The above also entails different locations, time, economic development, the

Umayyah, the Abassids, the melting pot of expansionary Islam and other

contexts that affected the Fiqh of the Imams.

The next often cited period of intense waqf activity was during the rule of the

Ottoman Empire (Turks of “Hanafi” persuasion). Why this is is just that the

state took deep interest in the institution of the waqf as compared to earlier.

Before going further the key points already pointed out and new points to be

developed needs stipulation:-

i) Waqf is a result of Ijtihad.

ii) The leeway accorded to “Ijtihad” was large.

iii) Each “Fiqh” school contributed in line with their understanding of the

subject matter.

iv) Waqf is a “privately” driven initiative (the Ottoman period is an

exception).

v) The public sector in early Islam was almost non-existence. Case in

point the “Treasury” was only instituted during Umar Al-Khattab’s

time. The role grew (Siddiqi is the prime commentator on this matter)

vi) The “old economy” was agriculturally driven thus land being

discussed most in waqf literature. Colonialism was severe on land

thus stifling waqf. (Leaving discussion of “cash waqf” aside for now,

the studies of Cizacka in this area is pre-eminent).

vii) The voluntary will always be secondary, the ups and downs of Islam,

of Islamic economics impacts elements within the economic system

differently (waqf contrasted to zakat)

viii) Fewer studies have been made on waqf as compared to let say Islamic

banking and finance. Islahi (2003) on Waqf bibliography cited no

major references on waqf law post 2000, on cash waqf it was 2002.

14

Why stress the above is due to the author not wanting to dispute the role

and the contribution of waqf in early, in medieval Islam up till perhaps the

1800s.

Much Ijtihad was applied at the beginning but not of late.

c) The current state of the Ummah & current pre-occupation with

Islamic Banking and Finance

Below is from the author earlier work questioning whether the Ummah, the

Maqasid al Shariah is being championed by Islamic Banking and Finance.

The Pew Forum on Religion & Public Life (2009) estimated that there 1.57

billion Muslims in the world making up 23% of the world population. More

than 60% of the global Muslim population is in Asia and about 20% is in

the Middle East and North Africa. Two-thirds of all Muslims worldwide live

in 10 countries, six are in Asia (Indonesia, Pakistan, India, Bangladesh,

Iran and Turkey), three are in North Africa (Egypt, Algeria and Morocco) and

one is in Sub-Saharan Africa (Nigeria).

Economically these countries rank low in terms of per capita income faced

with numerous handicaps such as ruled by corrupt and dictatorial

governments, having little or dwindling resources and subjected to

international sanctions in the case of Iran. The author concluded that

arriving to the Maqasid via Islamic Banking and Finance is questionable

and much repair is needed due to our preoccupation with such capital

market instrument of “sukuk” bent on the profit motive and competing

with conventional offerings.

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Part 4:- Mobilizing resources via the Institution of Waqf

Much has taken place since the revival and interests in Islamic Economics.

The waqf itself has attracted much attention. Below are some examples

from various Muslim countries:-

i) Malaysia

The establishment of the Department of Waqf, Hajj and Umrah in 2004

under the Ministry of Prime Minister Department shows the commitment of

Federal Government to consolidate waqf activities at the national level.

Johor Corporation is seen as a quasi-governmental body particular having a

deep interest in the waqf. In 2006 it launched the Corporate Waqf share and

via its subsidiary the Kumpulan Waqf An-Nur, a number of clinics known as

An-Nur Waqf Clinic in various places and a hospital was initiated. This has

been depicted as part of the Corporate Social Responsibilities (CSR) agenda

of JCorp.

In 2008, the Waqf Foundation of Malaysia (YWM) was set up to strengthen

waqf developments in the country. Currently, the foundation actively

promotes its waqf fund projects and cash waqf scheme.

In October 2009, International Islamic University Malaysia (IIUM) held the

International Conference on Waqf Laws & Management, Realities and

Prospects.

The world of academia, concerned corporate bodies and the federal

government were instrumental for the above.

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ii) Singapore

A small island state renders the management of Islamic affairs under the

sole authority of Majlis Ugama Islam Singapura (MUIS). It has taken bold

steps to safeguard Muslim interests in a non-Muslim dominated nation.

Much of its activities are commercially oriented vis a vis the real estate

property under its administration (price of real estate is premium in

Singapore. The two major financial tools utilized are via the cash waqf and

the “sukuk” based on the “Musyarakah” concept.

iii) Kuwait

Perhaps smaller nations have the natural advantage of easily mobilizing

waqf resources. Mohd Daud (1999) outlines the waqf institutions in Kuwait

and the United States. Waqf in Kuwait dates back to 1695 and in recent

times, waqf administration system is being administered under Ministry of

Awqaf and Religious Affairs. Waqf administration in Kuwait started in year

1949 with the establishment of Public Waqf Centre, who is in charge of

mosques’ administration and public waqf property.

The centre act as a trustee to

• Administer waqf property which doesn’t have any nazir assigned to it

• Spend excess revenue from waqf to fields which are not mentioned by

waqif

• Administer special waqf where its intended heir died

• Administer waqf property that’s beyond repair by its administrator

• Administer waqf property, which had been handed by the Sha’riah Court

and

• Administer any other types of waqf

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The Centre is being administered by Waqf Council, which usually consists of

several prominent people in the society. The Centre is being headed by

President of the Waqf Council, who also acts as the director.

After Kuwait’s independence, the centre had been renamed as a ministry

and waqf administration function had been broadened to cover such an

extensive scope. The ministry organise activities to increase communities’

awareness towards creating new waqf property. Besides that, Waqf property

is also invested through proper channels either through stock and property

market through Islamic financial institution, with the aim of increasing the

value of waqf property. The ministry is also engaged in developing waqf

institution through research and development.

In 1993, Kuwait Awqaf Public Foundation was established to strengthen the

role of waqf in socio-economic development. 70% of the waqf properties

owned by (KAPF) had income generating potential (Ahmed, 2004). An

autonomous General Secretariat was also established to administer waqf

funds better. The emphasis is to utilize new waqf funds for investments as

well directing the revenue for specific objectives. This is one of the trends

that are enveloping the waqf world where there is a growing emphasis on

“investment” or “liquid” types waqf funds via instruments such as the Cash

Waqf. Till today the foundation is active in promoting waqf, the waqf tarajim

initiative serves as a database of person/s involved in the hope of revitalizing

the waqf with links to various other bodies in Kuwait as well in other Middle

East/African nations. If the Maqasid entails educating the individual, this

initiative personifies it in its simplest form.

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iv) The United States

Waqf institution is developed differently. This is by virtue of the secular

nature of American society whereby the government remains aloof of

religious matters. Traditionally local Muslim communities will establish a

non-profit organization, which in turns owns the waqf (Kahf, n.d.). Another

way for Waqf administration is managed via the North American Islamic

Trust. This foundation is managed by few trustees who are selected among

Muslim communities in the United States.

The moment the foundation was established; all waqf properties owned by

Muslim Students’ Society in the United States, such as mosques and

buildings, the ownerships were transferred or waqf to the foundation. The

foundation was further developed through cash waqf, which are then used

to acquire buildings for education purposes and mosque. The foundation

also provides various services such as financial assistance, books or

scholarly journals publication, and Islamic audiovisual related equipments.

The foundation plays an active role in ensuring waqf property development

through direct investments such as agriculture sector, poultry rearing, food

& beverages or investment through Trust Fund.

It is common in the United States to use North American Islamic Trust’s

approach in waqf development. But, according to Mohd Daud (1999), the

approach will only works best through cash waqf since it wouldn’t involve

issues of ownership exchange from waqif to the foundation.

19

Dr. Monzer Kahf has opined that the major challenge to Muslim in

protecting waqf properties in the United States and also North America

comes via the ability of the waqf managers (mutawalli) to dispose of the waqf

fraudulently as well as the ability of non profit organization (waqf) to be sued

by other external parties (Kahf, n.d.).

v) Pakistan

It has a long experience with awqaf nevertheless it remains an extremely

poor nation with per capita income of USD $ 517 and 34% of its population

remains under the poverty line (Ahmed, 2004). Similar to most nations, waqf

administration is in the hands of the government. In Pakistan case, it is

administered by the provincial governments.

Initially Awqaf in Pakistan were managed by private concerns and

individuals. One of the drawbacks of privately managed waqf is the potential

of fraud and mismanagement. This forced the government to assume

responsibility in 1959 operating via the provincial governments. Based on

the two province of Islamabad Capital Territory and the province of Punjab,

there are some pertinent points to be raised on the administration and

application of waqf.

• Emphasis remains on the management of mosques and shrines

• Income are from donations by devotees

• Most of the activities are for religious/charitable purposes

• There is a bureaucracy involve in maintaining and administering the

waqf.

• In Punjab, 35.8% of total revenue is spent on administration compared to

31.5% on Religious Affairs, 10.5% on Health and only 2% on Social

Welfare

• There is excess revenue over expenditure.

• Only 30% of the revenue is generated from leasing and rents

20

4b) Trend detected in countries cited

i) The increased role of government in championing the waqf.

ii) Academics remains deeply interested in waqf focussing mostly on the

legal impediments to waqf, looking at alternative structures to enhance the

waqf, most times via “sukuk” of various types, particular emphasis on

Musyarakah. Most developments are construction related.

iii) Cash waqf is seen as the “magic bullet” to be utilized rather than

repair existing defects in other forms of waqf.

iv) Involvement of corporate bodies remains limited. However the Johor

Corp Corporate Waqf is a model to emulate (refer JCorp Annual Report

2008)

v) Ease of organization in smaller countries.

vi) Experience does not guarantee success and the social context impacts

the “reform” agenda if any.

These trends are positive but as yet giving rise to concerns.

i) Political support changes over time. The previous Prime Minister

supported the “waqf”. He introduced “Islam Hadhari”. This is no

longer heard today, it is all about “1Malaysia”.

ii) Government institutions may be bureaucratic,

wasteful in

Nature and remain prone to moral hazard issues.

iii) Academics may theorize but theory into policies takes time.

iv) Cash waqf remains misunderstood outside academia and

practitioners. There remain multiple variants to it. Different fiqh persists.

v) Successes are not publicize and remains away from media spotlight.

vi) The culture pervasive in a particular country impacts initiative.

21

4c) On-going challenges to Waqf

As early as 1999, Kahf has raised his opposition to government

administered or controlled waqf. He also identified unresolved fiqh related

issues. The two are not only the issues that are preventing waqf gaining

faster momentum.

Legal issues pertaining to land matters is a global issue affecting waqf, non

existence of Waqf laws in Non-Muslim countries may impact its legality,

majority of endowments is economically non-productive since it carries

religious usage. Transparency of managers, knowhow and skill to manage

for value (i.e. accruing economic benefits) remains limited if the managers

are employees of the State Religious Departments more predisposed to

either office management, family law or issues over inheritance.

Waqf accounting as a branch of accounting is yet comprehensive, Shahul

Hameed & Hidayatul Ihsan (n.d) have pointed that we may need to use

accounting standards developed for the use of charities in the United

Kingdom to support the need for accounting and transparency. In certain

countries, record keeping was hazardous making some endowment

unrecognizable, some sold to Non-Muslims (something that’s old need not be

technologically deprived). The author cites lack of “individuals” of renowned

financial standing campaigning for the “Waqf”. Earlier mentioned of wealthy

Malaysia not participating is a case in point. We need the “Cat Steven’s”, the

Bono’s pushing for this agenda. An old world example will be the likes of

Imam Shafie who travelled extensively to campaign for his methodologies.

Personalities and belief mixed together remains a very powerful potent in

encouraging others to participate especially with regards to something

voluntary.

22

4C-1) The role of Government and Regulators

Taking Malaysia as an example, the Bank Negara Malaysia Annual Report

2008 does not mention waqf; neither does the Takaful Report 2005. Where

do we search for such, Offshore Banking via LOFSA (Labuan Offshore

Financial Services Authority) but lip service is the treatment given.

It is parked under the concept of “trust” an offshore banking implement. If

“trust” was not an implement it is doubtful whether waqf will ever come into

the picture.

Few questions arise:-

i) Is this a rejection of the economic role to be played by waqf?

ii) Is “redistributive economics” not part of macroeconomics?

iii) The 3rd sector is not seen as a potential fiscal stabilizer in a world

dominated by emphasis on “laissez faire” government and pre-

occupation with monetary stability?

iv) What then is the value of the 3rd sector to the Maqasid-Al-Shariah?

v) The Maqasid-Al-Shariah is not important to our economic thought

leaders in Malaysia?

vi) Is Waqf to be treated as the poor man economics since waqf is subject

to the realm of developmental economics, push it to one side, let the

scholars talk about waqf being an instrument of micro-finance (much

literature on this)

vii) Is it too much Ijtihad being applied elsewhere in other areas (for profit)

and too little Ijtihad applied to the waqf (for the Maqasid)

A suggestion of the author, we talk about Malaysia being a “halal” hub. Why

not utilize the “waqf” as a mobilizing instrument in our quest for this status?

Need we depend on banks, on venture capitalist to support such initiative?

23

A hub promotes international trade between Islamic nations; only then

abundance can be shared across boundaries more so with the poorer

Muslim nations.

Failure to answer or refusal to answer the above undermines the ability of

waqf to promote economic growth. Putting aside economic growth, even the

smaller objective of poverty alleviation is sacrificed. The role of international

bodies like the World Awqaf Federation, the Islamic Development Bank (IDB)

and the United Nations (UN) can still be enhanced.

Is the cap on the feathers for the modern waqf is to be the ZamZam Tower.

Quote “Sukuk Al-Intifa’a – the right that entitles all Muslim from around the

world regardless of their nationalities to obtain a residential suite in

ZamZam Tower”

Unquote – (if you are poor, you have don’t have the right). The author is

sure that this deprivation if told to Umar Al-Khattab it will bring tears to his

eyes)

Part 5:- Conclusion

The volume of scholarship on the Waqf is constantly on the rise. The

author’s owned learned teachers like Dr. Yusuf Saleem wrote on

Institutional Mutawaali (increasing professionalism in Waqf) and Nurhaliza

Mohd Nor & Mustafa Omar Mohammed wrote on categorization of Waqf

Land and working towards investment models for usage in Selangor. Others

like Umar Oseni wrote on Nigeria (important since Nigeria is a country gifted

in resources but manipulated by its political masters) and Adnan’s Takric

writing on Bosnia (a country ravaged by war and seeking to re-gather its

Islamic heritage) shows the on-going life and death struggles of some

24

Muslim to deal with economic matters. The real problem inhibiting a

complete revival of Islam as a whole is the lack of political will that

approaches Islam in totality. The success of early Islam is secularism is

rejected outright and the religion is put ahead of “self”. The absence of a

collective will at the top also permeates below at the level of mass society.

Reform movements are often sidelined as attempts toward radicalizing the

accepted mainstream. Ijtihad is sidelined to academia or into patronage

driven think tanks.

Islamic history is undeniable. The golden age of Islam is the golden age of

Islamic Economics. Our present preoccupations due to the above represent

a “brake” to the waqf playing its intended role in Islamic Economics. Without

shifting mindsets (at the top and/or grass root pressure), we do not do

justice to the likes Mohammad Baqir al-Sadr, to Chapra, to Siddiqi, to

Mannan and a list that goes longer by day. The author also doubts that the

Prophet s.a.w will be pleased with the present as compared to his pleasure

of accepting the answer from Muaz Ibn Jabal.

Whilst we wait as such, the current efforts of modelling alternatives should

be continued. This with the hope of generating enough thought leadership

that will oppose the mainstream trend. Once this is achieved by the forces of

natural or perhaps divine justice, the falsehood will be swept away without

as much of a whimper. Thus the assembly of a ready force comes in and

rejuvenates society whilst at the same time monitors itself against the

corruptive influence of power.

25

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