Revitalising Waqf: Role of Islamic Finance

Penang, 27 Sep 2022 – A structured waqf which is managed professionally, disclosed transparently and regulated through enabling frameworks offers unlimited potential to reduce the economic burden on  the financially vulnerable. It would also be a much welcomed viable tool in a world looking to recover from the incessant environmental and socio-economic shocks brought about by a pandemic, wars and climatic disasters, according to panellists at a discussion on waqf.

`Revitalising Waqf: Role of Islamic Finance’ was one of the topics discussed at the World Islamic Economic Foundation (WIEF) Roundtable Penang 2022. The panel was moderated by INCEIF University’s Assist Prof Dr Ziyaad Mahomed from the Centre of Excellence in Islamic Social Finance, who briefly shared the historical contribution of awqaf. Societal reliance on waqf extended across religious, medical, education and scientific development. Dr Ziyaad was joined by other panellists including Dr Shamsiah Abdul Karim, Executive Director of Pergas Investments in Singapore; Mdm Sharifatul Haniza, Executive Director of Islamic Capital Market Development at the Securities Commission Malaysia; and Mr Rosidi Hussain, CEO of Wakaf Pulau Pinang.

In a post pandemic world which continues to face the consequences of climate change and financial & economic instability, policy makers and multilateral organisations require an urgent, circular approach to the revitalisation of waqf which has a historical record of great success. For a start, panellists indicated that the same challenges have prevailed over the last two decades: need for professional waqf asset management, need for an enabling waqf framework with broader definitions and the need for reliable data and information frameworks. One suggestion was that a centralised national database of waqf assets was required to enhance public trust, monitor development and grant funding access to waqf development.

The panellist also touched on potential for broader application of istibdal (substitution) and an increased awareness of waqf potential beyond mosques, schools and cemeteries. Another concern raised in the discussion was the leakage of waqf assets due to management challenges. International examples were provided were waqf assets were illegally occupied or potentially converted into private assets. Moving forward,  waqf innovation using crowdfunding, loyalty based donor strategies, cash waqf linked sukuk, and blockchain driven waqf databases are expected to be the game changers for the globally vulnerable and potential beneficiaries.

The theme for the WIEF Roundtable Penang 2022 is `Economic Rebound: Transforming The Future’. In his keynote speech when opening the Forum, Penang Yang Dipertua Negeri Tun Ahmad Fuzi Abdul Razak said Malaysia should look at potentially attractive sectors, such as Islamic finance, the halal ecosystem, regional high-end tourism, ecotourism and medico-tourism to grow the economy post pandemic.

 

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