Bismillah al-Rahman al-Rahim
Assalamualaikum Warahmatullahi Wabarakatuh –
It is with great pleasure for me to be here on the occasion of 11th World Islamic Economic Forum 2015 to speak on “The Role of Islamic Finance and Waqf in Healthcare”.
Waqf is an important Islamic institution that supports both the social welfare and economic development objectives of society. The benefits it has historically provided had been wide-ranging, including the building and upkeep of mosques, education and healthcare services, as well as guest houses, water
wells and rest facilities for travellers.
The concept originates in the guidelines that Prophet Muhammad, PBUH, gave to Umar Al-Khattab. The latter had a piece of land in Khaybar and told the Prophet that this was the best property he had but he wanted to donate it to charity. The Prophet advised that he may hold the property as waqf, and give its yield into charity.
The Prophet PBUH also took a keen interest in healthcare so much so that a substantive body of his sayings has given rise to the development of a separate discipline of learning in the name of al-Tibb al-Nabawi (Prophetic medicine), which brings together his detailed instructions on the subject. In one hadith, the Prophet highlighted the many rights that the faithful should be mindful about, one of which is that “your body has a right over you,” thus making healthcare an integral part of the Islamic faith and ethos.
Reading these messages in the context of the goals and purposes, or maqasid, of Shariah, it is imperative for an Islamic polity to ensure that protection of life and health are high on the priority list of Islamic finance and the value structure it seeks to protect.
Ladies and Gentlemen!
Since waqf is an endowment in perpetuity, it has increased over time in all parts of the Muslim world and become a major supporter of welfare services, and more recently also an important vehicle of economic development. It is indeed a form of financial intermediation that is well anchored in the real economy and social welfare objectives.
An impressive initiative of financing poverty alleviation through waqf has been taken by the World Waqf Foundation of the Islamic Development Bank, which has set up the Islamic Solidarity Fund for Development. This Fund, is based entirely on waqf and has a principal target capital of US$10 billion aimed at reducing poverty, reducing illiteracy, and combating disease, particularly Malaria, Tuberculosis (TB) and AIDS.
These initiatives have materialised through greater international cooperation in Islamic finance that also taps into the vast potentials of waqf as a vehicle of economic development. Going forward, the Islamic financial system is envisaged to play an increasingly important role in connecting the world economies through facilitating increased international trade and investment activities.
Ladies and gentlemen;
In Malaysia, the government and regulatory authorities have made eye-catching efforts to enhance the depth and diversity of the Islamic financial system over the years, which have more recently extended into important initiatives for the development of awqaf.
Hailed as the first of its kind, Malaysia established the Labuan International Waqf Foundation in 2015 with the objective of managing waqf properties based on the Shariah principles. It recognises different types of waqf to attract domestic and international participants, including:
- charitable waqf (al-waqf al-khairi)
- family waqf (al-waqf al-ahli)
- joint waqf (al-waqf al-mushtarak)
- self-dedicated waqf (al-waqf ‘ala al-nafs).
This has resulted in simplified procedures whereby the registration of waqf has become less bureaucratic and waqf can operate independently from State’s jurisdiction.
Ladies and Gentlemen,
The potential of waqf institution in improving the quality of life of the Muslim remains relevant even today as it used to be in the past. In area of healthcare, the innovativeness of corporate waqf pioneered by the Malaysian Johor Corporation or JCorp is another proof that waqf is a dynamic economic instrument of Islam which its practicality remains valid regardless of timeframe and where the concept is applied or who applies it.
The JCorp waqf programme was established on August 3, 2006 when the corporation endowed RM200 million worth of its share in three of its public listed subsidiaries namely Kulim (Malaysia) Berhad, KPJ Healthcare Berhad and Johor Land Berhad to a waqf programme. Waqaf An-Nur Corporation Berhad is a company established under limited guarantee by JCorp, entrusted with managing all equity PLC shares transferred by JCorp to Waqaf.
In order to ensure the corpus of waqf remains intact, only the dividend earned from these shares is channelled to the intended beneficiaries or purposes. One of them is to finance the operation of 20 Waqaf An-Nur Clinics (KWAN) and Waqaf An-Nur Hospitals (HWAN) in several states in Malaysia. In term of percentage, the allocation channelled stands at 12.5% on a firm commitment basis.
The main objective of KWAN and HWAN’s establishments is to provide healthcare treatments and dialysis facilities at nominal charge to the general public particularly the deserving, regardless of ethnicity and religion.
Until June 2015, a total of 1,098,510 treatments were discharged to the patients in the chain of KWAN. Out of that portion, 84,045 treatments were extended to non-Muslim patients.
The initiative of JCorp could be replicated by other corporations and philanthropic foundations. It is hoped that by emulating this exemplary deed, the access to good healthcare for all members of society – regardless of their genetic status – will improve as more charity based clinics and hospitals will be built throughout the country.
All this is indicative of the synergies between waqf and Islamic finance to meet the changing demands of the modern economy. The combined resources of waqf and Islamic finance can certainly be used to develop innovative healthcare products as their most important contributions to society.
Ladies and Gentlemen!
The waqf sector can be further developed through supportive legislation and policy initiatives. To this end, Malaysia and other Muslim countries should design coordinated action plans for better exploitation of waqf resources within and beyond their countries for the benefit of the Ummah.
Efforts are also needed perhaps to make the awqaf self-supporting and economically viable, which would require, in turn, policy initiatives and law reform. Some of this has already occurred but there is scope for wider levels of cooperation.
Ladies and Gentlemen!
WIEF has become the Islamic equivalent of Davos’s World Economic Forum. It has become a vibrant venue for important initiatives. I am confident that WIEF 2015 will be another milestone of achievement. I wish all of you great success in your deliberations.