The impact of Waqf on economic development
Waqf (plural Awqaf) is a process that combines savings and investment. It involves allocating funds away from consumption and then turning them into investments to increase the productive wealth of society.
Shariah scholars encapsulated this concept in their definition of Waqf as ‘keeping the principal and donating the benefit’ meaning the capital is preserved while additional profits are added.
This is now known as ‘circulation,’ meaning the movement and transfer of money, preventing it from being frozen or stagnant in one place.
Economically, Waqf is a developmental process and a productive asset. It cannot be sold, consumed, or diminished, nor can it be encroached upon or neglected from investment. This implies that it is a cumulative wealth that grows day by day.
For the development and investment of Awqaf, and to employ their revenue in serving developmental goals to uplift society in all its fields, modern investment methods have been introduced.
These include investment deposits in Islamic banks, stocks and bonds, units in Waqf funds, and electronic Waqf. These are modern forms that align with the economic essence of Waqf.
Specialists in Waqf have focused on linking it with new elements in the world of economics, to open up to more beneficial formulas and ensure the continuity of the ongoing charity (sadaqa jariya).
This openness has had a significant impact on the economic development of societies.
How Waqf promotes economic development
Waqf enhances the state's general budget by covering many expenses that burden the state but are important for civilisation and development.
Waqf contributes to the production process, helps create employment, reduces the budget deficit, stimulates domestic trade and the economy, improves infrastructure and plays a role in city planning and construction.
Waqf creates income sources for poor communities, unemployed people, widows, orphans, and vulnerable members of society, covering their basic needs. This leads to an improvement in their living standards which can increase their economic productivity.
Waqf can contribute to the development of human capital by providing a skilled and diverse workforce in various fields through the different forms of Waqf.
How to revive and advance Waqf
To preserve Awqaf and enhance their economic benefit to society, they must be developed and invested in. This can be achieved through a series of steps:
1- Protecting Waqf assets, maintaining them from loss and neglect, and keeping their records.
2- Reviewing old Waqf records to identify Waqf properties, registering those that require formal documentation, and reclaiming any that were lost or unlawfully seized.
3- Enhancing the productive efficiency of Waqf funds to generate the maximum revenue for the purposes for which they were endowed.
4- Facilitating regulatory procedures, providing support and facilities by developing legislations governing Waqf work, and exempting it from taxes and fees.
5- Addressing the root problems of Awqaf and working on their practical resolution.
6- Re-evaluating inherited Waqf jurisprudence (fiqh), moving it from its theoretical regulatory framework to practical application. This involves a balanced openness between original principles and civilisational changes, dealing with Awqaf with a new perspective that either did not exist in the past or was not needed.
7- Innovating new types of Waqf, whether in terms of concept, structure, investment, or the objectives of the Waqifs (endowers who donate the Waqf), to achieve the best returns for the community and its various segments.
