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Correct inaccuracies on waqf in sharia economy
The 2019-2024 Indonesian Sharia Economy Master Plan (MEKSI) was launched on May 14 by President Joko “Jokowi” Widodo
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span>The 2019-2024 Indonesian Sharia Economy Master Plan (MEKSI) was launched on May 14 by President Joko “Jokowi” Widodo. The final goal of this master plan is to transform Indonesia into a major player in the sharia economy. This will be achieved by implementing four main strategies such as empowering Indonesia’s halal value chain, strengthening the sharia financial sector, enhancing the role of micro, small and medium enterprises and utilizing and empowering the digital economy.
National Development Planning Minister Bambang Brodjonegoro in his opening remarks said in preparing the master plan, the government had coordinated with regulators at ministerial and institutional levels and had received many inputs from practitioners in the industrial sectors, academia, associations and other stakeholders.
We can thus assume the master plan is of the highest quality. However, a review of the zakah and waqf cluster in the document reveals that the master plan on waqf is hindered by at least three major issues: a lack of data accuracy, lack of coordination between stakeholders and lack of a clear direction in moving forward.
The lack of data accuracy is obvious. The total areas of waqf land nationwide, according to the MEKSI document, are 4.2 million hectares; while as of March 2016 the Indonesian Waqf Board (BWI) mentions that the areas are 435,944 ha. It could be a typo or miscalculation. But, it should not happen in such a strategic document.
Data discrepancy also lies in the estimated market value of registered land in Indonesia. A figure of Rp 800 trillion (US$55 billion) was mentioned by Bambang in 2016 during an Islamic Development Bank (IDB) meeting in Jakarta. A similar estimation was also given by the IDB’s Azmi Omar, a former leader of the Islamic Research and Training Institute in Kuala Lumpur. Surprisingly, the master plan cites a much lower figure at Rp 180 trillion. We wonder whether there was a lack of coordination in the preparation of the document with the minister.
Second, a clear lack of coordination with relevant stakeholders is shown through the quick wins target in the waqf cluster. It was stated that one immediate target was the drafting and implementing of waqf accounting standards. As of 2018, the document stated, there was no waqf accounting standard in Indonesia.
Hence, the master plan wants to expedite this.
Yet a simple cross check will reveal that on Nov. 7, 2018, the Islamic Accounting Standards Board of the Institute of Indonesia Chartered Accountants had issued the Financial Accounting Standard on waqf accounting which will be enforced on Jan. 1, 2021.
How could MEKSI overlook this fact, as the preparation of this standard involved many relevant parties such as the BWI, waqf practitioners, academics, regulators from Bank Indonesia and the Financial Services Authority? In addition, the exposure draft of Waqf Accounting Standard has been available online since last year to ensure that it reaches as many stakeholders as possible to solicit their feedback before the finalization of the document. One click on a search engine will lead everybody to the Waqf Accounting Standard’s exposure draft.
Hence it is very strange that the team that prepared the master plan had not accessed this information. Is it simply a case of working in silo mentality and lacking coordination among the stakeholders in preparing the master plan? If yes, then this would be worrying if the same thing happens during the implementation of the master plan in the near future.
Finally, the master plan on waqf lacks a clear direction as it fails to address the core problems of the waqf sector in Indonesia, ranging from data inaccuracy and the need to revise Law No. 41/2004 on the waqf sector. Apart from the issues of financing waqf properties, as most waqf institutions in Indonesia are unbankable and hardly have access to financial institutions. We do not want the master plan to fail to take off due to deficiencies in preparing the very important document, as this will be a huge setback for our country in its journey to be a key and main player in the sharia economy. The price would be very high.
The time has come for stakeholders like the National Committee for Sharia Finance and the consultants responsible for preparing the master plan to review the whole document as soon as possible and make revisions where necessary. Recognizing inaccurate data presented in the master plan is part of the solving the problem. In fact, this is the first thing that must be done.
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Fahmi M. Nasir is founder of the Center for Study and Consultancy of Waqf, Jeumpa D’Meusara, and a PhD student in waqf law and governance at Ahmad Ibrahim Kulliyyah of Laws, International Islamic University Malaysia. Hidayatul Ihsan is a lecturer at Padang State Polytechnic and member of the Sharia Accountant Compartment, the Institute of Indonesia Chartered Accountants.
