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Jakarta Post

A page from history: Demystifying waqf for transforming Indonesia

  • Fahmi M. Nasir and Nezar Patria


Kuala Lumpur/Jakarta   /   Fri, January 29, 2021   /   01:38 am
A page from history: Demystifying waqf for transforming Indonesia An employee of PT Pos Indonesia takes a picture of social cash assistance recipients on Jan. 13, 2021 in Sawah Besar, Central Jakarta. (JP/Dhoni Setiawan)

The launch on Monday of the National Cash Waqf Movement (GNWU) by President Joko “Jokowi” Widodo is the latest effort by the government and the country’s waqf stakeholders to tap the huge potential of this sector. President Jokowi says the time has come for developing waqf toward achieving the national goal of reducing poverty and inequality.

The government’s expectation is very much in line with the role and the sterling record that the waqf sector has shown thus far. It is extremely ironic that the waqf sector was very successful in the past, but has now been left struggling despite its huge potential, especially in terms of assets.

In our observation, the very definition and the essence of waqf, our current mindset toward waqf assets and waqf governance, in particular trust in the government, as well as the absence of a game-changer in cash waqf collection, are some key problems that must be addressed in order to maximize on waqf’s potential.

First are the definition and the essence of waqf. Monzer Kahf (2005), a Turkish waqf scholar, defines waqf as holding an asset and preventing its consumption to repeatedly extract its usufruct for a righteous objective. Mohd. Daud Bakar, who chairs the Shariah Advisory Council at the Central Bank of Malaysia, has pointed out that waqf is a financial institution with the potential to finance various projects.

Here, we would like to propose a new definition of waqf to resolve this matter. If we look back, waqf was used in the past to solve community problems. One of the most notable waqf assets was a well in Medina that belonged to Usman bin Affan. Usman had bought the well and turned it into a waqf to help address the local community’s water shortage. Thus, the waqf was created to solve the problem.

It is worth noting that contemporary scholars like Daud Bakar argue that Usman’s well is the first record case of a cash waqf, as initially he bought the well using cash.

Second is the current mindset toward waqf assets. Many stakeholders deem that most waqf assets today are waqf land that is being used for religious schools, mosques and cemeteries. We have to understand that these assets were created to address society’s needs and problems at a particular point in time.

Note that one of the most valuable assets is land. As time passed, many new types of waqf assets emerged, including digital assets that are considered one of the most valuable types of assets today. So now, we have to look at these various types of waqf assets as a means for us to help rejuvenate society.

The next pressing matter is trust in government. Many may suspect that the government is running out of revenue so they must tap into the huge potential of cash waqf. For them, the government should not be involved at all in waqf governance, especially of cash waqf.

As far as waqf governance is concerned, history shows three types of waqf governance: decentralized, semi-centralized and centralized.

Decentralized waqf governance occurred during the time of the Prophet Muhammad (PBUH). The administration of waqf was decentralized, and the founder of the waqf could either administer the waqf himself or appoint a trustee to administer the waqf on his behalf.

Second, in the first century of Hijri, the state was encouraged to manage and supervise waqf assets due to an increase in waqf properties. During the times of Hisham bin Abdel Malik (684-705 AD), the Diwan Ahbas (Ministry of Awqaf) was created to protect waqf property from abuse. The management of public waqf was placed under the jurisdiction of the Diwan Ahbas, while the management of family waqf was left to their founders and trustees. This is known as semi-centralized waqf governance.

The third type is centralized waqf governance, in which the Ministry of Awqaf has the authority to manage and administer all waqf property.

However, the core issue of waqf governance is not the type of administration per se. Rather, it is accountability and transparency. Hence, accountability and transparency in the governance of waqf assets matters, whether our government manages cash waqf and other waqf assets directly or indirectly.

Last but not least is the issue concerning the channels for receiving cash waqf. Vice President Ma’ruf Amin has stated that sharia financial institutions that receive cash waqf should be expanded through Islamic financial institutions receiving cash waqf (LKS-PWUs) and Islamic microfinance institutions (IMFIs) taking an active role in various regions. The issue here is the limited coverage of LKS-PWUs and IMFIs in Indonesia.

The solution to this issue is hiding in plain sight: We have the national postal service, Pos Indonesia, whose nationwide network covers more than 17,000 islands. It already has a network infrastructure that reaches almost 100 percent of all regencies and cities and 42 percent of urban and rural areas as well as 940 remote transmigration settlements through its 4,800 offices across Indonesia.

Pos Indonesia has the potential to contribute to the successful delivery of the cash waqf program. The time has come for LKS-PWUs, IMFIs and waqf stakeholders to collaborate and leverage the potential of the nation’s postal service.

All in all, we believe that all issues as identified above must be addressed with good planning, careful implementation and better governance to transform the country’s waqf sector, especially cash waqf. Otherwise, we will only repeat the failure of the first GNWU that was launched with much fanfare in 2010.

Fahmi M. Nasir is the founder of the Jeumpa D’Meusara (JDM) Waqf Research and Consultancy Center in Banda Aceh and a doctoral student in waqf law and governance at the Ahmad Ibrahim Kulliyyah of Laws (AIKOL), International Islamic University Malaysia (IIUM); Nezar Patria is director of institutional affairs at Pos Indonesia. The views expressed here are personal.


Disclaimer: The opinions expressed in this article are those of the author and do not reflect the official stance of The Jakarta Post.