ROLE OF WAQF IN SOCIO-ECONOMIC DEVELOPMENT

ROLE OF WAQF IN SOCIO-ECONOMIC DEVELOPMENT

By Alishba Fazal ur Rehman
A researcher from Pakistan and a member of the Young Researchers Program at AlBaraka Forum for Islamic Economy

Definition of Waqf:

The word Waqf (plural, awqaf) is derived from an Arabic word that means to detain or in other words ‘restrict’ because it acknowledges that all properties belong to God⁽¹⁾. The definition of Waqf according to the accepted doctrine of the Hanafi school of Fiqh is the extinction of the proprietor’s ownership in the thing dedicated and its detention in the implied ownership of God in such a manner that the profits may revert to and be applied for the benefit of mankind⁽²⁾. Thus, it is defined as a property permanently dedicated to Allah Almighty. The permanent, irrevocable and inalienable nature of Waqf made it unique from other properties.
Waqf is not expressly mentioned in the Quran but certain verses encourage Muslims to do charity, generous acts, and good deeds. Thus, the jurist associates the legitimacy of Waqf with the Quranic text which promotes charity and advocates for the social well-being of people including the Almighty’s saying in Surah Al-Imran (3:92), “Never will you attain the good (reward) until you spend (in the way of Allah) from that which you love, and whatever you spend – indeed, Allah knows of it”. Moreover, the main motivation for creating the Waqf can be found in verse 261 of Surah Al-Baqarah, Allah stated, “The likeness of those who spend their wealth in the way of Allah is as the likeness of a grain which grows seven ears, in every ear has a hundred grains. Allah gives a manifold increase to whom He pleases. Allah is all-embracing, all-knowing.” All these verses clearly show the importance of spending money for the cause of Allah as a good deed and making Waqf meets the standard of these verses as a way for Waqf owners to attain righteousness.

History and Origin of Waqf:

In the history of Islam, the first to define the Waqf was Prophet Muhammad (PBUH) who donated the land for the construction of the famous masjid of Quba⁽³⁾. Waqf was created during the lifetime of the Prophet and he encouraged Muslims to make Waqf when he identified any need in society. This is evidenced by the hadith where the Prophet said, “When a human being dies, his work comes to an end, except for three things, ongoing charity, knowledge benefited from, or a pious son who prays for him”⁽⁴⁾. Scholars understood the ongoing charity stated in the Hadith as Waqf⁽⁵⁾. An ongoing charity is established on such a structure and arrangement that enables the charity-giver to earn the reward of charity continuously (even after his/her death) as opposed to a one-off reward.
The real innovation in the idea of Waqf started in the early Islamic Period in Madinah. It was initiated by the Prophet (PBUH), when he exhorted Muslims to buy the well of Rumah and designate it as a public utility of drinking water free for all. The hadith mentioned that the Prophet (peace be upon him) asked, “Who will buy the well of Rumah and dip his bucket in it alongside the buckets of the Muslims, in return for a better one in Paradise⁽⁶⁾?” prompted Othman bin Affan to buy it and make it a public endowment (Waqf) from which everyone can drink for free. More than 1400 years have passed since the great companion Othman bin Affan purchased the well of Rumah and the well still irrigates the city residents with its water. Another example is when the Prophet (PBUH), advised Umar to assign his land in Khaibar as a Waqf for the poor and needy. Umar gave it away as alms, declared that the land must not be sold, inherited or donated⁽⁷⁾. This marked the second innovation that transferred ‘supporting the poor and needy’ from a scale of individual charity to a scale of social civic institution with capital investment.

Thus in the Prophet era, the practice of Waqf was common and played a significant role in establishing the welfare of the society. The Prophet (PBUH) made a lot of announcements encouraging Sahabah (the companions of the Prophet) to give Waqf for the sake of Allah (SWT). As Imam Shafi’ said: “more than eighty men of the companions participated in Waqf⁽⁸⁾”. The history of Waqf is rich and extensive with expressive achievements during the era of the Prophet and Caliphate serving the poor and enhancing the welfare of the Ummah (nation). As Ibn Batuta, the famous world traveler commented in the 13^th century that “endowment in Damascus were plentiful, uncounted and unlimited⁽⁹⁾”. Waqf is considered as a significant pillar of the public interest (masalah). The welfare of the society is achieved through the fulfillment of the principles of Maqasid of Shariah (objectives of Sharia) which includes the protection of religion, life, intellect, lineage, and property. It protects religion and life through righteous actions that purify the soul and draw a Muslim closer to Allah, and perpetuity in Waqf ensures protection of property that supports state development. Additionally, Waqf land benefits people by enhancing their quality of life, thus protecting life. The importance of Waqf is emphasized by its alignment with Quranic teachings, Hadiths, and Maqasid of Shariah. Historically, Waqf has boosted Islamic economies by reducing poverty, creating employment, and lowering government spending.

Role of Waqf in Socio-Economic Development:

A healthy and balanced society requires that wealthier individuals share their income and resources with those less fortunate to ensure everyone has access to essential needs. This promotes financial and social inclusion, which in turn boosts overall economic growth. By helping the poor, maintaining their human capital and supporting counter-cyclical economic policies, such redistribution promotes equitable economic development. Financial institutions must function equitably and efficiently, similar to the heart’s role in supplying blood to all parts of the body. Waqf, a unique institution within the Islamic economy facilitates resource sharing across different groups to meet both immediate consumption needs and long-term production for those in need. The Waqf system can significantly contribute to the ultimate goal of modern economies which includes a substantial reduction in government expenditure. This reduction leads to decreased budget deficits and less reliance on government borrowing⁽¹⁰⁾.

Waqf is an important institution in the Islamic socio-economic system. It has played a key role throughout Islamic history. During the Ottoman period, financing of health, education and welfare services was entirely entrusted to the Waqf system, as the following expression states: “Thanks to the Waqf during the Ottoman Empire, a person would have resided in a Waqf house, slept in a Waqf cradle, ate and drank from Waqf properties, read Waqf books, taught in a Waqf school, received his salary from a Waqf administration, and eventually when he died, he would be put into a Waqf coffin and buried in a Waqf cemetery⁽¹¹⁾”. During this period, almost all state services, religious, social, scientific, and modern life requirements were financed and managed by Waqf facilities at no cost whatsoever to the government. Therefore, it highlights the significant importance of the Waqf system in social, economic and cultural life of Ottoman society.

Moreover, Waqf has played an essential role in socio-economic development, including the field of education. The prominent centers of Islamic learning about Waqf include Al-Azhar University founded in Cairo in 972 AH which was financed by Waqf revenues until the government of Muhammad Ali took control over the Awqaf in Egypt in 1812, likewise Al-Qarawiyyin in Morocco, and Zaitouna university in Tunisia. Waqf has also made significant contributions to healthcare. For instance, Al Noorie Hospital in Damascus was established in 1145 AD. Notable physicians, such as Ibn Nafis, who discovered the blood circulation, graduated from this institution. Additionally, Waqf has greatly benefited the poor, needy, orphans, and people in distress. Healthcare facilities were funded by Waqf, such as the Shishli Children’s Hospital in Istanbul, founded in 1898 represent how Waqf revenues have been used to construct hospitals and support medical services, including spending on physicians, apprentices, patients, and medicines⁽¹²⁾.

Today, more than 8,000 educational institutions and more than 123,000 mosques in Bangladesh are Waqf institutions. A large shopping complex in Dhaka is Waqf-based, providing employment to a large number of people and even financing a publication house, a large auditorium, and a mosque⁽¹³⁾. Moreover, Notable examples of Waqf contributions include the Süleymaniye Waqf in Istanbul, which funded the construction of schools and universities, and the Waqfs of Murad II and Bayezid II in Edirne, which established and operated hospitals providing free medical treatment.

An important way to alleviate poverty is through charity. While charity comes in many forms, the most lasting is one characterized by perpetuity. Waqf is a perpetual voluntary charitable act. It is an instrument in the Islamic economic system aiming to promote equitable and just wealth distribution. The political and socio-economic growth and development of Muslim countries and communities have been significantly influenced by the contributions of Waqf, making it one of the most visible evidences of charity in Islam. Waqf has significantly contributed to the socio-economic development of Muslim communities globally. The proceeds from Waqf assets have been utilized for various developmental projects, including healthcare, education, poverty alleviation, skill acquisition, and youth empowerment. Many Islamic banks have also adopted the Waqf model as an intervention tool for socio-economic development. For instance, in 1999, the Islamic Development Bank established the largest Islamic charitable endowment fund of approximately 1 billion dollars to provide charitable services throughout Muslim countries and communities⁽¹⁴⁾.

Waqf supports economic growth by transferring wealth from the donor (Waqif) to the administrator (Mutawalli) which promotes job creation, production and consumption. Waqf investments in infrastructure, which are considered social overhead capital (SOC) contribute significantly to industry and economic development⁽¹⁵⁾. At the macro level, Islamic economists argue that Waqf reduces public spending on public goods, lowering the tax burden on citizens. This, in turn increases savings, private investment, and economic growth. Additionally, Waqf creates a permanent and growing capital base that supports sustained growth and expands compassionate activities beyond zakah and charity. The Waqf institution maximizes social profit by enhancing both human and environmental well-being, unlike capitalist systems that focus solely on economic profit. Waqf have historically played a crucial role in promoting social justice and sustainable development, including investments in human capital, afforestation, and environmental protection⁽¹⁶⁾. Waqf funds have addressed diverse needs, such as supporting the underprivileged, providing for travelers and pilgrims, raising orphans, helping those in debt, and maintaining public amenities. They also promote education fostering significant social change and creating opportunities for dynamic development in Muslim societies⁽¹⁷⁾.

Conclusion:

Waqf, as a powerful Islamic economic instrument, has played a significant role in socio-economic development throughout Islamic history. According to Ibn Khaldun’s book “Al-Muqaddimah”, “the state should ensure the prevalence of Sharia and accelerate human development and well-being.” The comprehensive economic system in Islam, which includes Waqf aims to eradicate poverty and improve the socio-economy of the Muslim nation. Historically, Waqf has contributed to the provision of social services like education and healthcare, public goods, utilities, religious services, and aid for the poor and needy. Furthermore, Waqf can finance “maqaṣid-oriented SDGs” and accelerate their achievement in Muslim-majority countries, addressing poverty, hunger, inequality, health, sanitation, economic growth, and sustainable community development. Waqf‘s real purpose and philosophy align closely with the SDGs, making it a vital tool for socio-economic development, capable of developing well-being, equity, and sustainability. The concept of Waqf promotes social welfare and economic development by providing a perpetual source of funding. By removing wealth from private ownership and dedicating it to the public good, Waqf helps the redistribution of wealth and reduction of economic disparities. This not only supports the immediate needs of the community but also ensures long-term economic stability and growth. Conclusively, the institution of Waqf stands as a testament to Islam’s commitment to social justice and economic development. By utilizing the principles of Waqf, Muslim communities can address current socio-economic challenges, promote sustainable development, and create a more equitable society.

⁽¹⁾ What is Waqf? – Waqf fund best charities to donate to (2022) International Waqf Fund.
⁽²⁾ S.A. et al. (2022) Concept and explanation of Waqf under Muslim law, iPleaders.
⁽³⁾ Organization, B. (2022) Everything you ever wanted to know about Waqf in Islam, Bonyan organization.
⁽⁴⁾ Riyad as-Salihin 1383 (Book 12, Hadith 8)
⁽⁵⁾ al- Miṣrī Aḥmad Ibn-an-Naqīb and Mim, K.N.H. (1997) Reliance of the Traveller the Classic Manual of Islamic Sacred Law; in Arabic with facing English text, commentary, and appendices = ʻUmdat al-Salik. Beltsville, Md: Amana Publ.
⁽⁶⁾ Sunan An Nasai 3638
⁽⁷⁾ Sahih Muslim Book 13, Number 4008
⁽⁸⁾ Baqutayan, S.M. et al. (2018) “Waqf between the past and present,” Mediterranean Journal of Social Sciences, 9(4), pp. 149–155.
⁽⁹⁾ Ibid
⁽¹⁰⁾ Cizakca, M. (1998), “Awqaf in history and its implications for modern Islamic economies”, Islamic Economic Studies, Vol. 6 No. 1, pp. 43-70.
⁽¹¹⁾ Waqf System as a Redistribution Mechanism in the Ottoman Empire. Paper presented at 17th Middle East History and Theory Conference. May 10-11. Center for Middle Eastern Studies, University of Chicago.
⁽¹²⁾ Monzer Kahf (2003) Role Of Waqf In The Welfare Of The Ummah.
⁽¹³⁾ Sadeq, Abulhasan M. (2000). “Waqf, Perpetual Charity and Poverty Alleviation”
⁽¹⁴⁾ M. Kabir Hassan and Mervyn K. Lewis 2007; Edward Elgar Publishing Limited page 281
⁽¹⁵⁾ Cizakca, Murat. Islamic Capitalism and Finance (Cheltenham: E. Elgar, 2011)
⁽¹⁶⁾ Institutional Roots of Authoritarian Rule in Middle East: Waqf as Obstacle to Democratization” (version of 21 October 2012).
⁽¹⁷⁾ Senkaya, O. (2012). Significance of philanthropic institutions in Ottoman social life. Fountain Magazine. Issue 88 July-August