Islamic: Waqf

THE CONCEPT OFWAQF 

Since ancient times, waqf has been a successful system that had existed in human life for a long time before Islam came and has fully applied the use of waqf in every aspect of their life, although it is not named waqf. At that time, the construction and financing of places of worship were done by the concept of waqf. Same goes with buying and selling, marriage and others that already existed before Islam. The waqf system was known in Roman, Babylonian, and Pharaoh civilisations. 

When Islam came, many similar concepts of waqf existed, and then Islam put the system on waqf (Mohsin, 2013). The waqf system in Islam is not a system adopted from a pre-existing system but a pure system of the Qur'an and Sunnah. It is not limited to places of worship only but covers the social, economic and military spheres. "Waqf" is derived from the Arabic word "waqafa", meaning to detain or keep in custody (Saleem, 2010). 

Hence, in Islamic terms, it means to keep some property and safeguard it for philanthropy and prohibit any use or disposal of it. The process is carried out by removing the corpus of the asset from individual ownership and permanently dedicating it to God. This concept emphasises that the donor (waqif) and the donated assets have no further relationship after establishing a waqf contract. Thus, the donor does not have the right to carry out any transaction on donated assets. 

Besides, the term waqf itself refers to withholding specific property that can be used. The condition of such property must be permanent and transferrable, with the party who endowed it deciding on its administration. The objective of waqf depends on the intention of the donor. Usually, the main purpose of waqf is either to gain spiritual reward or humanitarian purposes. In the Anglosphere country, waqf may be known as the word 'endowment'.

HOW IT RELATES TO THE ISLAMIC ECONOMIC WORLDVIEW?

1. WAQF HAS THE POTENTIAL TO REDUCE GOVERNMENT EXPENDITURE AND PREVENT DEFICIT FINANCING

Cizakca (1998) stated that waqf can minimise government spending and avoid funding deficits. In truth, waqf may be able to help modern governments eliminate interest and promote more fair revenue distribution. It can be accomplished by instructing Islamic banks to combine cash waqf donations from investors with mudarabah enterprises, often known as "joint-stock firm shares." As a result, one way that waqf can help to reduce unsustainable debt is to fund government spending, at least in part. As a result, the federal government will be able to pay down its debt with more tax money. 

Furthermore, waqf can have a significant impact on government spending reduction. Moreover, waqf can have a significant effect on government spending reduction. Waqf has a critical role in lowering interest rates by delivering the most basic social services free to the government. If the budget deficits decrease, it will lessen the need for government borrowing, which helps keep the crowding-out effect at bay. Lowering interest rates is one of the most significant barriers to private investment and economic growth. As a result, it's crucial to look at the waqf system's gradual removal or drop of interest. The wealthy could donate to the waqf for it to carry out these functions.

2. WAQF HELP THE COUNTRY'S ECONOMY GROW AND ENHANCE ECONOMIC PROGRESS

Waqf aids in the growth and development of the country's economy. The country's economy would then benefit from well-managed waqf properties. During the Ottoman Empire, waqf properties were greater (Budiman, 2014). The stronger the involvement of the private sector, the faster the economy grows. The more actively the private sector participates in the economy, the stronger the national economy will be. As a result, waqf provides public goods, a solution to the prevalent problem of undersupply in conventional economies. There is an excess supply of public goods rather than a scarcity as a result of the private sector's significant role in the Islamic economy. According to the Holy Quran, giving waqf as part of charitable giving enhances the flow of money within a community. Preventing wealth hoarding and laziness in the economy can lead to economic progress (Uthman & Adesina-Uthman, 2012).

Many waqf initiatives have resulted in job possibilities for the community. Increased demand for products and services has resulted from the flow of wealth throughout society, such as money into the hands of the impoverished. The more waqf, the more products and services are produced, resulting in economic prosperity. This will gradually increase the society's living standards. From the standpoint of the government, waqf has aided in the reduction of government expenditure on public goods and services, which would eventually result in the avoidance of deficit financing since there will be less expenditure, reducing the crowding-out effect.

HOW WAQF DIFFERS FROM CONVENTIONAL TRUST FUNDS? 

Under English law, there is a system slightly similar to waqf under Islamic law. The purpose is the same: "The property is held up, and the usufruct is given to a religious or benevolent organisation." However, waqf can be differentiated from a trust in certain ways.

Waqf can only be established for religious, pious, or benevolent purposes, whereas trusts can be established for any authorised purpose. Next, a waqf's founder cannot reserve any advantage for himself, except under Hanafi law, although a trust's founder can be a beneficiary.

In comparison to the rights of a trustee, the mutawalli relatively restricted authority. Also, a waqf is usually eternal and irrevocable (Abdullah & Ismail, 2017). While, a trust does not have to be perpetual and can be cancelled under specific circumstances. Lastly, the trust fund is regulated by Trust Act, but the act cannot be applied to waqf.  

THE ROLE OFWAQF IN SOCIO-ECONOMIC DEVELOPMENT AGENDA

1. EDUCATION

A waqf educational institution is a nonprofit organisation or institution that was founded with the help of the Muslim community or erected on property or buildings dedicated to Islamic education. The fundamental goal is to seek Allah's SWT pleasure and to build a devout Muslim community, mukmin and muttaqin. Waqf plays a variety of essential roles that can help Muslims improve their quality of life. Education is a critical component of the country's progress.

Quality education leads to better human capital, a more productive workforce, and more efficient educational institutions. As a result, education endowment has become one of the long-term instruments for raising the country's academic standards (Mujani et al., 2018). The existence of an educational endowment can not only help the development of a country, but it can also produce people who are well versed in endowment activities and enjoy participating in them.

From another perspective, the objective of waqf in Islam is not confined to assisting the poor and religious purposes but also encompasses a wide range of societal goals, including the needs of knowledge, educational institutions, and Islamic studies students. The proof, in the form of waqf, is also used at research universities and institutes that distribute Islamic pamphlets to the public, such as Al-Azhar University. 

Educational waqf has been widely carried out by foreign countries to develop their academic standards. Great universities like Al-Azhar University have developed with the concept of waqf funds only and are able to produce quality graduates every year. Even in Western countries, this fund is also known as an endowment. For example, Harvard University is built on cash funds, and its land is funded by certain individuals. Harvard University is also the largest university receiving funding or financial endowment worth $32 billion in 2011 (Mujani et al., 2018). 

Among the famous waqf religious schools in Malaysia is Madrasah Al-Attas in Pahang. It was endowed by Syed Hassan bin Al Attas. The goal of the establishment was to spread Islam and the Arabic language to the local people. The first madrasah built in 1860 was the Madrasah Al-Attas. It was built on land endowed by al-Habib Hassan al-Attas (Azha et al., 2013). During its development period, the school faced various financial problems. From 1966 until now, it has been handed over to the Pahang state government. It is now known as the al-Attas Religious Secondary school. Al-Habib Hassan al-Attas later migrated to Johor and established another Madrasah Al-Attas there in 1913.

This madrasah remains to this day and is administered by his heirs. The Council of Trustees is the trustee for the waqf property of the late al-Habib Hassan al-Attas based on the will of the late. It has played a role in developing the Arabic language in Johor. The medium of instruction used is Arabic, and the students consist of students in and outside the state of Johor. His teachers were brought from southern Yemen, Egypt and Indonesia. Some students were sent to AlAzhar University in Egypt.

In the 1970s, the madrasah changed its policy to focus on academic education only to avoid closing it. The community then contributed less to Arabic and religious education. In 1975, Tuan Syed Ali al-Attas changed the policy by integrating all religious and Arabic lessons with academics. One of the successful scholars born from this madrasah is YB Dato' Syeikh Alwi Thahir al Hadad, the ninth Mufti Johor who pursued his study at University AlAzhar later (Syed Jaafar & Ramli, 2021). In addition, the flourishing of waqf activities in education also aids in the reduction of school dropouts and lagging among poor Muslim Malay children. 

Therefore, implementing educational endowment is an important practice in developing the education sector. Waqf aims to help fellow Muslims in terms of education and further improve the quality of the Islamic economy's third sector and the country's future. The implementation of this educational endowment can not only be seen as encouraging the community to know more about the endowment activities; it also can help in producing quality human capital by only investing through endowment funds. All of these benefits, in turn, will make Malaysia, a country that practices waqf progressively known as a country with quality human capital and generates economic progress.

2. HEALTHCARE

Apart from that, waqf also provides opportunities for the waqif to worship in any form of charity they like, especially in the healthcare sector that can be used by the public regardless of their background. History proves that waqf plays a very significant role in the healthy development of a country. Medical institutions in Islamic civilisation, such as clinics, hospitals, mobile clinics and university hospitals, were mostly established at the cost of waqf. Similarly, Rest and Relax services like boarding houses (hostels), Sufi centres, mosques and educational institutions rely heavily on assistance from waqf.

Although in Malaysia, there are hospitals and clinics provided by the government and the private sector, waqf institutions also play a role in delivering health at a low cost to the community. For example, Johor Corporation, through Masjid An-Nur Kotaraya and in collaboration with the Johor Islamic Religious Council (MAIJ), has established a network of Waqaf An-Nur Clinics (KWAN), which is a health centre based on the concept of waqf. Johor Corporation (JCorp) has endowed Lots 85, 86, and 87 Level 3 of Plaza Kotaraya next to Masjid An-Nur Johor Bahru as a clinic site with a total development cost of RM 425, 160.58. 

The Wakaf An-Nur Clinic network has 8 networks, of which half of the clinics are located in Johor, one in Negeri Sembilan, 3 in Selangor and one in Sarawak. In addition, there is a Wakaf An-Nur Hospital operating in Johor. All chains of Wakaf An'Nur Clinics also provide dialysis services at a subsidised rate (Ab Rahman, 2009). Kumpulan Wakaf An-Nur Berhad has also collaborated with the Kelantan Islamic Religious and Customary Council (MAIK) to open a waqf clinic in Kelantan, specifically in Kampung Sireh Mosque. This waqf clinic aims to provide medical services to underprivileged patients regardless of religion at the lowest price. A hospital or waqf clinic will help the poor get health care for free or at a low fee.

To conclude, waqf plays a great role in ensuring the well-being of the ummah regardless of religion and race because the recipients of waqf are not specifically required to be Muslims alone. Therefore, waqf cannot be sold, donated or inherited by anyone. It has remained under the possession of Allah SWT throughout the ages.

3. ECONOMY

Furthermore, waqf also has the potential to be a source of productive funds that can be developed so that the benefits continue to be enjoyed by the beneficiaries of waqf. In other words, waqf has become a tool for wealth redistribution to achieve economic development in a holistic context because waqf has played a role in providing education, health centres, places of worship, road facilities, bridges and so on. In the time of Rasulullah SAW, Othman bin Affan endowed the al-Raumah well, which was the main source of water supply for Muslims at that time (Khairi et al., 2014). Water is a basic facility needed for life. 

The waqf of money implemented during the Ottoman Empire greatly contributed to various economic development activities for the community, namely educational facilities, health, welfare and other activities that benefit the community. Financial waqf is implemented by the way waqf money is invested, and profits are spent for the benefit of the waqf. It means that the original amount of the waqf money remains and does not decrease. Even the practice implemented during the Ottoman Empire is very interesting to highlight. A sample of waqf money made by El-Hac Sulayman El-Hac, in which he endowed 70,000 dirhams of silver produced in 1513. 

El-Hac endowed 30,000 dirhams to be used for school construction. The remaining 40,000 dirhams became capital to be invested by lending to interested parties with a profit margin of 10 per cent per annum on the murabahah contract. The profits earned are spent on prescribed items; 3 dirhams to the salary of a schoolteacher, 1 dirham to his assistant, 1 dirham to the person who reads the Quran and 2 dirhams to the mutawalli.

In a nutshell, most of the profits from waqf money during the Ottoman government were used for waqf administration expenses, education, food, justice institutions, and expenses for the maintenance of waqf properties, namely mosques, residential rental, religious, social, taxes and waqf inspectors.

Nowadays, the role of waqf in economic development can be seen worldwide, for example, in Singapore. Mawardi et al. (2019) added that 170,000 Muslim workers make contributions of $2- $11.50 a month using the CPF (Central Provident Fund) mechanism and raise $6 million annually. In addition to monetary waqf, there is 100 waqf registered in Singapore. Then the earnings of waqf property are distributed to mosques, madrasahs, welfare, funerals, the poor and others.

In the UK, Islamic Relief has introduced several forms of waqf to help Muslims worldwide, namely water and sanitation waqf, sacrifice waqf, health waqf, education waqf, orphan waqf, flood waqf, generational income waqf and future fund waqf. Among the beneficiaries of these various endowment projects are Palestinian children, war victims in Bosnia, the poor in Bangladesh, Mali, Sudan and many more. 

A SUCCESSFULWAQF INSTITUTION: UNIVERSITY AL-AZHAR

Al-Azhar University in Egypt is the most prestigious university for Islamic learning in the world and has succeeded in producing Islamic scholars from all over the world. AlAzhar University in Egypt, built in 975 AD, is one of the world's oldest universities in the world, which is also fully funded by waqf resources that provide free education from primary to university education. In 1986, a total of $ 147, 324, 300 was allocated by AlAzhar University to fund development and educational activities, including the expenses of managing 55 existing faculties (Mohd Taib & Mujani, 2014). Education at Al-Azhar only requires students to pay very low tuition fees and does not burden students. 

The concept of educational endowment that is highlighted is more on equality in seeking knowledge and easing the financial burden of the students. Because of this advantage, various nations and countries flocked to gain knowledge in Egypt. 

In addition, the construction of Al-Azhar University also provides an important contribution to the development of education in Egypt through the implementation of a cash endowment, which turns out to be a backup fund that can be used to help educational institutions with cash flow problems.  

Cash waqf's ability to assist Islamic educational institutions has been proven by the success of the education system in Egypt itself.

As stated by Islam (2014), Al-Azhar University was built using cash endowment funds, and it has invested most of its cash endowment funds to build storage warehouses on the Suez Canal. In addition, Al-Azhar University has also lent its cash waqf funds to the Egyptian government. The sustainability of Al-Azhar University has proven the effectiveness of cash endowment funds in the development of educational institutions.

SUMMARY

By this, we can learn that the concept of waqf or endowment is a powerful tool for organising, changing, and managing the Muslim community's financial status and resources. History has also recorded evidence that the development of waqf has great implications for the socio-economic development of Muslims.

Waqf property also consists of various classes of high-quality assets such as agricultural land, commercial complexes and hotels that can generate income and provide employment opportunities to the community.

Therefore, the development of waqf property is a development that can stimulate not only the economic and social growth of the community but also the development of a country. Every waqf property should be given attention and administered as best as possible since it is a valuable asset to the country. 

REFERNCES

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Abdullah, R., & Ismail, A. G. (2017). Taking stock of the waqf-based Islamic microfinance model. International Journal of Social Economics. 

Azha, L., Baharuddin, S., Salahuddin, S., & Afandi, M. R. (2013). The practice and management of Waqf education in Malaysia. Procedia-Social and Behavioral Sciences, 90, 22-30. 

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Uthman, I., & Adesina-Uthman, G. (2012). The role of zakah and waqf management in poverty alleviation of Muslim women in Nigeria. In: International Islamic University Printing Sdn Berhad.