By Roslina Abdul Rahim

Over the past centuries, waqf (Islamic endowment) has evolved from a traditional instrument to a more dynamic instrument for socio-economic development and welfare of ummah. Historically waqf was implemented by universities and hospitals, such as the University Al-Azhar in Egypt, the Hospital Al-Noori in Damascus, Syria, and the Dhaka University in Bangladesh (NST, 2018).

In the 15th century, the Ottoman Empire adopted the idea of cash waqf that supported the large-scale public works. During this golden age, the ruler and the wealthy aristocrat donations contributed to this enormous projects’ development. It is created in order to preserve the socioeconomic unity of the nation and the city through endowment contributions (Mokhtar et al, 2010)

Waqf development is now capable of being even more exceptional and unique. All around the globe, several products and waqf programmes are emerging. There is a new concept of corporate waqf today in South East Asia countries.

Corporate Waqf in South East Asia

Singapore

Wakaf accounts for the majority of the assets under Majlis Ugama Islam Singapura (MUIS) management. 68 of the 91 wakaf registered under MUIS are administered by MUIS, while 29 are managed by trustees. MUIS established Warees Investment Pte Ltd (WAREES), a wholly-owned subsidiary the expert administration of its wakaf assets. The 2020 MUIS annual report shows that the overall value of wakaf assets has increased to almost SGD $1 billion (Karim, 2021).

MUIS Compulsory Cash-Waqf Scheme salary deduction raised approximately S$130 million (RM400 million) which was utilised to construct 22 mosques. Musharakah Bond is the first sukuk Syariah financing that has raised S$60 million to develop Singapore waqf real estate (NST, 2018). MUIS applies istibdal method (to change or replace) as an investment tool while constructing waqf projects and developing waqf property in Singapore. The istibdal wakaf project, carried out by WAREES, involved the issuance of S$25 million in musharakah sukuk to replace 20 waqf sites situated in unattractive locations with a building at 11 Beach Road (Pertiwi et al,2018).

Indonesia

Fortunately, Indonesia has a significant cash waqf potential. Cash waqf and shares waqf are important outcomes of waqf development in Indonesia (NST, 2018).

Indonesia's cash waqf is enormous, amounting to between USD1.42 billion and USD1.78 billion from potential waqf donors (individuals, businesses, and the government). This cash waqf fund can be used to finance traditional markets, public hospitals, state schools, mosques, and other public infrastructures projects (Ismal, 2022).

In order to implement the Cash Waqf Linked Sukuk (CWLS) model, Badan Waqaf Indonesia (BWI) and the Indonesian government's Ministry of Finance issued the sovereign Islamic securities known as Sukuk Waqf Indonesia (SWI) in 2020. This so called SWI, is a new series of waqf-based sovereign Sukuk with the aim to increase cash waqf collection and utilization through this newly developed model (Ismal, 2022).

Malaysia

One of the corporate waqf innovations that has caught the attention of the Muslim community is Waqaf An-Nur Corporation Berhad (WANCorp). Business jihad is the fundamental principle of corporate waqaf originated from the former CEO Johor Corporation (JCORP) Tan Sri Muhammad Ali Hashim. The spirit of jihad and corporate waqaf in JCORP’s has been very empowering among the Muslims, integrating ibadah and amal soleh into modern business activities and corporate life to enhance the socioeconomic Malay community well-being (Ramli et al, 2019).

WANCorp is a fully functioning waqf corporate institution based in Malaysia that is crucial to the development of a viable corporate waqf Islamic business model. It has contributed enormously through education, healthcare, micro-financing, national security, transportation facilities, provide basic necessity such as shelter and food for the poor and needy (Ramli et al, 2013). Since its establishment, the corporate waqf’s asset value has increased from RM90.05 million to RM575.9 million in just in six years (the latest figures increase in assets RM value) (NST, 2018).

In June 2017, Larkin Sentral Property Berhad (LSPB), a wholly-owned subsidiary of WANCorp, offered up to 850 million Waqf ordinary shares at RM0.10 per share to institutions and individuals and subsequently (through waqf) to WANCorp. This is the world's first public offering of waqf shares approved as Shariah compliant by the Shariah Advisory Board of the Securities Commission of Malaysia. This offering is considered a public Waqf.

Both Muslims and non-Muslims can participate in WSLS offerings and benefit from the proceeds from the offerings. This will primarily be used to finance the modernization and renovation of Larkin Central and to finance the acquisition of land for proposed developments of a 7 storey parking lot. Individual and institutional participants are entitled to tax deductions of up to 7% and 10% of their aggregate income respectively (Ramli et al, 2019).

Conclusion

A new perspective of ​​waqf models in numerous countries may help to solve the pandemic and epidemic economic woes in Malaysia. The Waqf Investment Fund Framework (WIFF) has been introduced to alleviate poverty and to promote equality and social inclusion. In line with the 12th Malaysia Plan (RMK-12) and Budget 2022 announcement, WIFF explores the considerations to develop Waqf assets in Malaysia that will support the overall National Waqf Masterplan (PwC Malaysia, 2021).

National and state policymakers and implementers should focus on developing holistic enterprise waqf business models for long-term financial solutions. Compassionate efforts should also come from individuals, communities and non-governmental organizations.