WIEF-IDB AWQAF ROUNDTABLE
5 JUNE 2014, JAKARTA, INDONESIA
SPEECH FOR
YABHG TUN MUSA HITAM, CHAIRMAN, WIEF FOUNDATION
- DR MULYA E SIREGAR, DEPUTY COMMISSIONER OF BANKING SUPERVISION, INDONESIA FINANCIAL SERVICES AUTHORITY,
- MR KUNRAT WIRA SUBRATA, ACTING DIRECTOR, IDB REGIONAL OFFICE KUALA LUMPUR
- PANEL SPEAKERS AND MODERATORS,
- LADIES AND GENTLEMEN, ASSALAMUALAIKUM AND A VERY GOOD MORNING.
- I WOULD LIKE TO THANK ALL GUESTS AND PARTICIPANTS FOR ATTENDING THE ROUNDTABLE THIS MORNING.
- I WOULD ALSO LIKE TO EXPRESS MY GRATITUDE TO IDB (ISLAMIC DEVELOPMENT BANK) FOR JOINTLY ORGANISING THE ROUNDTABLE WITH OUR FOUNDATION. OUR PARTNERSHIP MARKS A FUTURE STEEPED IN SUCCESS, AND SOMETHING TO LOOK FORWARD TO.
- AS WE ALL KNOW, WIEF BELIEVES IN BUILDING BRIDGES THAT CONCERN BOTH MUSLIM AND THE NON-MUSLIM WORLD THROUGH BUSINESS AMONG OTHERS. WE DO SO THROUGH OUR PRACTICE OF ORGANISING ROUNDTABLES IN-BETWEEN OUR ANNUAL SESSIONS TO FOCUS ON SPECIFIC ISSUES SUCH AS ISLAMIC FINANCE, MICRO FINANCE, THE HALAL INDUSTRY, EDUCATION AND PUBLIC-PRIVATE ECONOMIC COLLABORATION.
- TODAY’S ROUNDTABLE MARKS WIEF’S AND IDB’S VERY FIRST COLLABORATION, WHICH IS A SPECIAL ROUNDTABLE ON WAQF. I LOOK FORWARD TO BEING PART OF THE DISCUSSION TODAY, AND LEARNING FROM EXPERTS AND SPECIALISTS ON THE SUBJECT.
- WAQF IS AN IMPORTANT ISLAMIC INSTRUMENT OF WEALTH DISTRIBUTION, AND IS EVEN MORE SO WHEN ONE CONSIDERS EXTREME POVERTY AND DEPRIVATION ON ONE HAND AND INCREASED WEALTH AND PROSPERITY OF THE RICH ON THE OTHER HAND PARTICULARLY IN THE MUSLIM WORLD TODAY. WAQF CAN INDEED BE THE INSTRUMENT TO SUBSTANTIVELY NARROW SUCH A GAP.
- WAQF IS UNUSUAL IN THE SENSE THAT IT PROMOTES ‘RECURRING CHARITY’, WHICH WOULD ENSURE THE IMPLEMENTATION OF A UNIQUE WEALTH DISTRIBUTION SYSTEM THAT COULD PROVIDE PERPETUAL BENEFIT TO THE ENTIRE COMMUNITY.
- TODAY’S ROUNDTABLE IS TO ENABLE PARTICIPANTS TO REFLECT ON THE TRUE SIGNIFICANCE OF WAQF AND THE HUGE POTENTIALS THAT EXIST. ACCORDING TO THE SEPTEMBER 2013, 26TH ISSUE OF ‘ISLAMIC FINANCE NEWS’, FOR EXAMPLE, THE WAQF SECTOR COULD BE WORTH UP TO US$1TRILLION GLOBALLY.
- WHILE THERE IS NOW AN INCREASING AWARENESS OF WAQF, IT REMAINS AS A POTENTIAL UNTAPPED AND SOMEWHAT ‘NEGLECTED’ ASPECT OF ISLAMIC PRACTICE THAT SHOULD BE GIVEN GREATER PUSH AND A HIGHER PROFILE IN RESPECT OF IMPLEMENTATION.
- ALLOW ME TO QUOTE SOME STATISTICS AND NUMBERS. ACCORDING TO THE INSTITUTE OF ISLAMIC UNDERSTANDING MALAYSIA, IN MALAYSIA ALONE THE 2010 STATISTICS ISSUED BY THE DEPARTMENT OF WAQF, ZAKAT AND HAJ SHOWED THAT THERE WERE 11,511 HECTARES OF WAQF LAND WORTH RM116,441,667 BUT ONLY 0.72% OF IT WAS DEVELOPED. WE CAN ALSO SEE HOW BENEFICIAL IT COULD BE TO ALL STAKEHOLDERS CONCERNED WHEN, AS AN EXAMPLE, AN IMPRESSIVE BUILDING THAT HOUSE THE ISLAMIC BANK WAS DEVELOPED ON A PIECE OF WAQF LAND IN KUALA LUMPUR. INDEED THIS DEVELOPMENT, JUST LIKE THE WAQF TO BUILD THE MOSQUE OF QUBA’ IN MADINAH UPON THE ARRIVAL OF PROPHET MUHAMMAD TO THE CITY IN 622 AD, HAS BECOME SYMBOLIC OF THE RELEVANCE OF THE INSTITUTION OF ISLAMIC WAQF TO BENEFIT THE COMMUNITY, IF PROPERLY ADMINISTERED.
· IN INDONESIA THE FIGURE IS EVEN MORE STAGGERING. ACCORDING TO A SENIOR ECONOMIST OF IDB, WAQF LAND IN INDONESIA HAS REACHED MORE THAN 3.9 BILLION SQUARE METERS IN MORE THAN 428,000 LOCATIONS THROUGHOUT THE COUNTRY. ONE CAN IMAGINE HOW BENEFICIAL IT WOULD BE IF ALL SUCH WAQF LAND COULD BE DEPLOYED FOR SUSTAINABLE DEVELOPMENT TO ENRICH THE WELLBEING OF INDONESIANS GENERALLY.
- WHILE THE MALAYSIAN AND INDONESIAN CASES ARE SPECIFIC EXAMPLES, THERE IS ALSO THE BROADER PICTURE ABOUT WAQF THAT NEEDS TO BE APPRECIATED. APART FROM CREATING A SOCIALLY BENEFICIAL WEALTH DISTRIBUTION MECHANISM THAT I HAVE MENTIONED ABOVE, THERE NEEDS TO BE THE DEVELOPMENT OF A STRONG AND CREDIBLE INSTITUTION OF WAQF AS A USEFUL MECHANISM IN HELPING TO “REDUCE GOVERNMENT EXPENDITURE, PREVENT GOVERNMENT BORROWING THROUGH DEFICIT FINANCING, PROMOTE GREATER PRIVATE SECTOR PARTICIPATION THROUGH VOLUNTARY ACTION AND CONTRIBUTE TOWARDS NATIONAL ECONOMIC PROGRESS.” AS ENUNCIATED BY IKIM, MALAYSIA, THESE BROAD OBJECTIVES ALONE SHOULD SPUR GOVERNMENTS IN THE MUSLIM WORLD CONCERNED TO MAXIMISE THE POTENTIALS OF WAQF AS AN IMPORTANT COMPONENT OF THEIR NATIONAL ECONOMIC STRATEGY.
- IT IS HIGH TIME THAT WE TAKE A FRESH LOOK AT THE EVOLUTION OF WAQF MODELS – FROM LAND TO CASH TO SHARES AND NOW TO CORPORATE WAQF. SUCH AN EVOLUTION HAS PROVIDED A WIDE RANGE OF OPTIONS FOR WAQF TO BE DISBURSED BY THE BENEFACTORS.
- IN RESPECT OF CORPORATE WAQF, IT IS INTERESTING TO NOTE THAT A MALAYSIAN GOVERNMENT LINKED COMPANY BASED IN THE STATE OF JOHOR, JCORP, HAD ESTABLISHED THE WAQF AN-NUR CORPORATION BHD, A CORPORATE WAQF AS A TOOL OF ‘BUSINESS JIHAD’. THIS REVOLUTIONARY IDEA APPARENTLY WAS PROMPTED BY THE NEED TO PROMULGATE A KEY IDEOLOGICAL STRATEGY IN THE STRUGGLE FOR ISLAMIC ECONOMIC TRANSFORMATION. WHO IS THE PERSON THAT PASSIONATELY PURSUED THESE IDEAS? HE IS… I BELIEVE THAT THE ESCALATION OF THIS IDEA FROM THE NATIONAL TO THE GLOBAL LEVEL WOULD HAVE A TREMENDOUS POSITIVE IMPACT ON THE LIVES OF MUSLIMS WORLDWIDE.
- NEEDLESS TO SAY THERE ARE INDEED CHALLENGES FACING THE DEVELOPMENT OF A TRULY GLOBALISED INSTITUTION OF WAQF:
- THERE ARE DIFFERENT TYPE OF JURISDICTIONS AT NATIONAL AND STATE LEVEL THAT EXIST IN THE MUSLIM WORLD IN ADMINISTERING THE INSTITUTION OF WAQF THAT HAS LED TO UNCOORDINATED STRATEGIES AND CAPITAL ALLOCATION.
- THE ABSENCE OF AN EFFECTIVE CENTRALISED STRUCTURE TO CAPITALISE ON WAQF OPPORTUNITIES AND MAXIMISE THE BENEFITS TO THE RIGHTFUL BENEFICIARIES IS ANOTHER ISSUE TO RESOLVE.
- THERE IS A LACK OF PROPER LEGAL AND REGULATORY FRAMEWORK TO ENSURE GOOD GOVERNANCE IN DEVELOPING SPECIFIC WAQF ASSETS.
- POOR MANAGEMENT AND ACCOUNTING AND THE LACK OF QUALIFIED, KNOWLEDGEABLE AND PROFESSIONAL TRUSTEES AND MANAGERS TO PROVIDE THE NECESSARY CONFIDENCE TO WAQF STAKEHOLDERS AND POTENTIAL DONORS IS A HUGE FACTOR TO CONSIDER.
- GOVERNMENTS MUST PUSH FOR THIS. POLITICAL LEADERSHIP IS IMPORTANT IN BRINGING ABOUT A NEW POLICY EMPHASIS TO HARNESS THE FULL POTENTIAL OF WAQF, NOT ONLY AT THE NATIONAL LEVEL BUT ALSO AT THE REGIONAL AND INTERNATIONAL LEVEL. A PROACTIVE LEADERSHIP WOULD HELP PUT IN PLACE AN ISLAMIC BASED GLOBAL WEALTH DISTRIBUTION SYSTEM THAT WOULD BE UNPRECEDENTED IN SCALE AND CONTENT. IT COULD EVEN SERVE AS A GOOD MODEL FOR OTHERS TO FOLLOW. I BELIEVE THAT THIS IS A PRACTICAL AND DOABLE PROPOSITION IF ONLY WE HAVE THE POLITICAL WILL TO DO SO.
- I HOPE THAT THIS ROUNDTABLE WILL ALLOW FOR INTERACTIVE DIALOGUES ON VARIOUS ASPECTS OF THE INSTITUTION OF WAQF. OUR IDEA OF COURSE IS NOT TO TURN THIS ROUNDTABLE INTO A PURELY ACADEMIC EXERCISE BUT TO GENERATE CREATIVE AND INNOVATIVE IDEAS INCLUDING COMING OUT WITH RELEVANT AND DYNAMIC MECHANISMS AND INSTRUMENTS TO DEVELOP THE INSTITUTION OF WAQF TO BE ACTIVE AND EFFECTIVE IN SOCIAL DEVELOPMENT.
- PERSONALLY, I HAVE CONFIDENCE THAT THE PRESENCE OF SO MANY EXPERTS AND PRACTITIONERS INCLUDING BANKERS HERE AT THIS ROUNDTABLE WOULD BE HELPFUL IN ALLOWING US TO ENGAGE IN ROBUST DISCUSSIONS ON THE VARIOUS DIMENSIONS OF THE SUBJECT OF WAQF.
- MAY THIS ROUNDTABLE END WITH SOME USEFUL AND PRACTICAL IDEAS AND RECOMMENDATIONS. THE BANKING SECTOR, WELL REPRESENTED HERE TODAY, COULD PERHAPS TAKE THE LEAD IN CREATING SPECIALLY DESIGNED PRODUCTS THAT COULD BE IMPLEMENTED WITHOUT TOO MUCH BUREAUCRATIC IMPEDIMENTS.
- THE WIEF, TOGETHER WITH IDB WOULD BE HAPPY TO CONTINUE TO JOINTLY ORGANISE A SIMILAR GATHERING OF EXPERTS ON WAQF ON A REGULAR BASIS SO AS TO EVENTUALLY TURN IT INTO AN IMPORTANT GLOBAL PLATFORM THAT WOULD BE ABLE TO COMPLEMENT SUBSTANTIVELY THE GOOD WORK OF OTHERS ON THIS SUBJECT FOR THE BENEFIT OF THE COMMUNITY AT LARGE.
- WITH THESE FEW WORDS I WISH ALL PARTICIPANTS EVERY SUCCESS IN YOUR DELIBERATIONS.
- THANK YOU.