With policies and strategies being formulated, the vastly underused waqf resources can effectively help to fulfil the targets of the development goals but only if waqf gets priority among policymakers, people are made aware adequately and property under illegal occupation is recovered, mobilised and enhanced.
THE Sustainable Development Goals is a collection of 17 goals designed to be a blueprint to achieve a better and more sustainable future for all. The goals, set in 2015 by the UN General Assembly and intended to be achieved by 2030, are part of UN Resolution 70/1, the 2030 agenda. Since the goals came into force, all countries have started mobilising efforts to end all forms of poverty, fight inequalities, ensure universal education, develop green economy, tackle climate change and promote sustainable growth while ensuring that no one is left behind.
The United Nations Conference on Trade and Development estimates that achieving the development goals by 2030 will require $3.9 trillion to be invested in developing countries each year. However, with the current annual investment of only $1.4 trillion, the annual investment gap is $2.5 trillion. If we want to achieve the goals, we will require mobilising the right scale and a mix of financing, including incorporating all resources — domestic, public and private and international. For a developing country like Bangladesh, managing such a huge investment gap is, indeed, a daunting task. It is high time we looked for alternative financing sources which would be sustainable in the long run.
Islamic finance has already crossed its $2.0 trillion benchmark and is projected to grow to $3.3 trillion by 2020. As the third largest Muslim-populated country in the world, Bangladesh has a competitive advantage in accessing and mobilising Islamic finance. One of the tangible products of Islamic finance is waqf. Waqf is a voluntary donation — a running charity. Waqf literally means tying up of an asset (real estate, cash, etc) for some specific Shariah-compliant objective in such a way that the principle remains intact and only its usufruct (income/benefit) is spent on the named objectives. Unlike zakat, the beneficiaries of the waqf are diverse and inclusive. Its expenditure sector is not specific but guided by Islamic financing outlook. Public utilities such as mosques, schools, madrassahs, colleges, universities, hospitals, bridges, graveyards, community centres, street lighting, passenger sheds, public toilets and drinking water facilities can be set up with waqf fund. The United Nations Development Programme also recognised waqf as a social-impact financing tool.
In some Muslim countries, waqf has spanned a third or more of cultivable land. According to one estimate, total world waqf assets could range from $100 billion to $1 trillion. For instance, the value of land and property waqf in Indonesia alone is estimated at about 4.4-billion square metres with the economic value of $27 billion. According to the 1986 census of waqf estate, there are 150,593 waqf estates in Bangladesh with total land of 606,107.23 acres. Income from these estates was only 700 million. In 2015–16, the waqf administration, the government body managing registered waqf estates, collected Tk 586.6 million from 21,588 registered estates. Economists estimated that the total waqf land in Bangladesh is more than 2 million acres but most of it is under illegal occupation.
It is not surprising that 24.3 per cent people of Bangladesh still live below the poverty line where 12.9 per cent are, according to the Bangladesh Bureau of Statistics records of 2017, extremely poor. A number of reasons can be identified for such a dire situation such as the lack of resource, misdirected resource mobilisation, policy deficiencies and poor implementation of social safety net programmes. In this situation, waqf can play a vital role in managing the finance needed to overcome the challenges. Waqf properties have a huge market value but currently have a little or limited impact on combating poverty, reducing inequalities, improving socio-economic infrastructure and developing human capital. It is so because of the apathy of waqf property trustees, lack of proper motivation and absence of workable national plan, strategy and honesty of purposes.
We need to manage a huge amount of investment to achieve the Sustainable Development Goals within 2030. There is substantial potential in deploying Islamic finance instruments to promote inclusive growth, reduce inequality and accelerate poverty reduction. The revival of waqf can be a real a game changer in this situation. For example, it might be possible to create a revolving investment mechanism through which the assets pooled under waqf structures would be invested to support small and medium-sized enterprises to generate revenues. Islamic banks in Bangladesh have already mobilised more than Tk 100 crore by using cash waqf certificates. In order to realise the full potential of waqf, we need a strong legal framework, decentralised waqf administration and control over rampant corruption. With policies and strategies being formulated, the vastly underused waqf resources can effectively help to fulfil the targets of the development goals but only if waqf gets priority among policymakers, people are made aware adequately and property under illegal occupation is recovered, mobilised and enhanced.
Dr Md Akther Uddin is an assistant professor at the school of business of the University of Creative Technology Chittagong.
Want stories like this in your inbox?
Sign up to exclusive daily email
More Stories from Opinion