Waqf Economy is based on Islamic principles of giving and sharing in a way that produces sustained abundance, shared prosperity, peace, love and compassion among all people.
The present economies based on capitalistic system or other ideologies are unsustainable in nature with rising inflation, widening gap in wealth and income distribution, rising poverty, unemployment, unaffordable housing, rising household debt and environmental destruction to name few. This dynamic is quite universal. A new model of economic development therefore need to be urgently structured and implemented before the situation becomes unbearable. Periodic economic recessions come and destroy much of whatever that was built earlier.
The current Covid19 pandemic has brought to light the vulnerability and unsustainable nature of the present monetary and economic systems. This has brought forth a golden chance for true Islamic Economic model to emerge. This is where WAQF ECONOMY comes in as a viable alternative to address the shortcomings of the present economic models. WAQF ECONOMY is people-centric economy. It eliminates cartels and capitalistic controls, avoids and prevents speculation, avoids interest and all forms of riba, and reduces or even eliminates taxes by providing an alternative to public financing through Waqf.
Waqf Economy is based on people’s capital injection and not simply through new money creation by the banking sector that is the fundamental cause for inflation, wealth gaps and unaffordability of homes. Further, by embedding the element of Waqf into businesses and economic practices the mechanism of people-support-people is enhanced. The system practices risk sharing and profits sharing, where people practice Waqf embedded investments and reinvestments.
WAQF ECONOMIC PRINCIPLES
1. Genuinely free from Riba’ (usury)
2. Free from speculative businesses
3. Business based on “Real Economy”
4. Deal with high potential ready operated businesses
5. Continuous return on investment based on mudharabah or musyarakah
A unique feature of Waqf Economy compared with Classical Waqf is that in Waqf Economy, Waqf is CREATED and managed professionally instead of waiting to be contributed by people. Other than providing for the Mauquf ‘Alaih just like in classical Waqf, Waqf Economy continuously increases the Waqf size, provides employment, reduces riba-based borrowing and transactions, and contributes to sustainable development.
PRINCIPLES ADHERED TO IN MANAGING WAQF FUND
- Amanah – Belongs to Allah SWT. Public Interest. Trustee
- Professional – SOP driven. Governance. Audited
- Accountability – Professional reports
- Transparency – Real-time information
- Maqasid Al-Shari’ah driven – Riba-free; Risk-sharing principles
- Digitalization – IT and Mobile Apps driven