It’s become common when we talk about Islamic Finance, the main issue that will appear will be sukuk and Islamic bank. The other institution or concept relating to Islamic Finance are still little to be seen or discuss via any news. Today I will share an article regarding Waqf, one of the important instrument in Islamic Economic. Waqf has been tremendously performed in Islamic Civilization before. Nowadays, a lot of people are talking about waqf, here and there.
This article quite interesting because the author trying to introduce some innovation in term of the medium (wasilah) of waqf. Hope it will be a useful article as future reference.
By: Mohamad Azhar Hashim (Fellow of IKIM)
‘Waqf’ matters can be rather technical, which could be the reason why many Muslims today are unable to perform this great deed.
WAQF, or its plural awqaf, is an Islamic instrument of wealth distribution that if properly structured and administered can provide perpetual benefit to the entire society.
Invariably, the historical significance of waqf in Islamic history cannot be overemphasised albeit the instrument was used to provide everything to society, including hospitals, schools, roads, bridges, orphanage shelters and others.
In a hadith narrated by Abu Huraira, the Prophet (peace be upon him) says: When a man dies, his acts come to an end, but three; recurring charity or knowledge (by which people benefit), or a pious offspring who pays for him (reported by Muslim 1992, Chapter 3, hadith 14). Indeed this hadith has provided the underlying principle for the body of knowledge on waqf, which has then evolved for centuries.
The “recurring charity” referred to in this hadith can be attributed to waqf, whereby the single act of creating and establishing waqf will lead to the recurring charity that benefits the needy and the society, and if the waqf is properly structured, the benefits can even last in perpetuity.
Despite the evolution and the richness of the body of knowledge, waqf matters can be rather technical, both in term of its legality as well as the Syariah aspects. Perhaps, this could be the reason why many Muslims today are unable to perform this great deed.
From the Islamic worldview, the objective of establishing a waqf is solely to achieveal-falah i.e. being successful in this world and in the hereafter. Meaning which, the instrument is underpinned by one’s faithful belief that there is another life after one’s death. Therefore, there will be recurring reward for the recurring charity, even after the person has passed away.
Through a waqf, a Muslim can achieve recurring charity whereby the benefits of the act flow to the needy repeatedly.
However, contrary to what some people may understand, waqf is not a mere religious instrument, which provides benefit in terms of performing religious rituals alone.
In fact, waqf, as historically proven, is a vital public finance instrument that can be used in providing public good for the people, and is capable of contributing towards economic growth and development.
It has provided economic, commercial, education, health, social and spiritual benefits.
From the macroeconomic perspective, waqf can be looked upon as a savings-investment mechanism where surplus resources are diverted from being consumed by the owner, to be invested in productive assets with perpetual benefits that can be consumed by society.
This function would enable waqf not only to serve philanthropic or religious objectives, but also to unlock its economic viability.
In this modern era, we may now be able to diversify the sources of waqf. We may not be confined to waqf of landed property or cash donations, but we can also use other assets that yield income such as proceeds from intellectual property (IP) rights or royalty payments.
This will pave the way for many talented Muslims in our society, be it in science, technology, arts, or literature, to participate together in establishing and promotingwaqf in this country.
A facilitative structure and Syariah-compliant guidelines should be developed and put in place so that we can benefit immensely from the waqf of intellectual property rights or royalty. Nonetheless, waqf is only a voluntary charity or donation from the donors, be it from an individual or group.
Inevitably, today’s society may overlook wealth as being a divine sustenance to help those in need.
The belief that wealth is a divine blessing that leads to the establishment of manyawqaf to support the needy, which has been practised by the society of past centuries, may have now been overtaken by a widespread desire for personal consumption and luxurious living.
Nevertheless, the tradition of our society, which is imbued with a sense of kindness and generosity, provides a huge comfort to our hearts.
Given the right guidance, information and knowledge, both in term of the legal and Syariah aspects, our society would be keen to establish waqf that in turn will allow for the creation of sustainable and perpetual benefits not only for the Muslim community but also for the entire nation.