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Unlocking Islamic land endowments(waqf) for social development

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1 Unlocking Islamic land endowments(waqf) for social development
25 March 2014 World Bank Land and Poverty Conference Unlocking Islamic land endowments(waqf) for social development Bernadette Baird-Zars, Rana Amirtahmasebi, Abdulla Darrat

2 Waqf as a land tool: Extent and status
Multi-country survey of administrative, legal and management context (a) administration and management bottlenecks and opportunities, (b) local legal innovations that could support a contemporary development agenda (c) lessons from policy and programmatic experiments in regeneration of properties.    Major findings Administration and legal framework Current management and utilization Cross-cutting obstacles Questions

3 WHAT IS WAQF? Waqf/Awqaf
Establishes permanent assets with a purpose – social development Some are religious; this paper will discuss ‘charitable’ waqf for social aims Assets can be liquid or semi-permanent; this paper will focus on land, particularly in urban or peri-urban areas Legal framework for management encouraged cross-subsidization, market rents Local boards of trustees, local court oversight Major provider of services historically; preserves endowments. Prominent method for women to control land WHAT IS WAQF?

4 extent Assets extensive but not well mapped
Neighborhood surveys suggest 10-20% of urban land in waqf Current Indian waqf board estimates place current asset value at over USD 1 trillion Largest landowner in Indonesia A 2010 global snapshot by Ernst and Young estimates at least 105 billion in waqf, 2/3 rds in property Single largest landholder in Syria extent

5 New lenses for old tools
Examining waqf for development Poverty alleviation Leveraging private sector participation in social development Growing local capacity – civil society and municipal management for investment and operations of services and social infrastructure ‘Strategic private philanthropy’ (Brookings) Municipal assets to financing expansion Seed funds to grow sector of mission-oriented developers; NGOs Source for civil society – or FBO. New lenses for old tools

6 Uniquely place and land-based
Cities Waqf Need land for social purposes – affordable housing, services Have little funding for expanding basic services, providing social infrastructure Have few established tools to partner with private sector, civil society Service area inherently place-based: neighborhood or city-scale Location in historic centers, areas just out of historic centers, large areas of peri-urban agricultural lands. Often host informal settlements Respected as method for non-statal delivery of services Coming from a practical standpoint Uniquely place and land-based

7 state of current Knowledge
A rich literature examines historical role and legal configurations of waqf The few studies that describe contemporary waqf underscore three points: Current administrative frameworks underinvest, and are often purely public Diversity in country-level tools and legal traditions Status of assets, eg current usages, extents, and new investments, only exist in city-level or neighborhood level profiles Note Sait and Lim, Cizezca state of current Knowledge

8 methodology On-site experience in Morocco, Iran and Syria
Initial scan and matrix of 18 countries In-depth analysis of 6 countries: Afghanistan, India, Indonesia, Iran, Morocco and Uzbekistan In-depth review published academic literature National-level reports and studies Public-sector data and official publications Conversations/interviews with officials, local experts in-country methodology

9 Findings: governance Local Centralized Local leaders/association
Local leaders/association Local governments / Neighborhoods National-states National ministry Single religious authority Local Centralized Afghanistan (de facto) Some Indonesia Morocco (family awqaf and sufi brotherhoods) Iran (management) Uzbekistan India Saudi Arabia Morocco Iraq (by sect), Syria, Egypt, Jordan, Lebanon, Afghanistan Kuwait (Consortium) Iran Note that Iran is mixed; management and property income is local Findings: governance

10 Scale of governance of current management systems, mapped along a spectrum of centralization and public/non-public management Legal and management framework type Examples from countries with waqf Centralized public - under direct administration and purview of national government agency. Algeria, Egypt, Iraq, Morocco, Syria, Turkey, Iran (religious authority) Centralized with regional boards Saudi Arabia, India, Southeast Asia Centralized ‘network’ of institutions Kuwait Local community boards or managers Previously widespread. South Africa, Indonesia to some extent. Officially removed from legal system. Many waqf properties persist de facto. Russia, Tunisia, former Soviet Republics 

11 Findings: asset management
Across all countries surveyed: Significant waqf land assets India: USD 19.5 billion estimated in waqf assets; 600,000 acres Indonesia: 594 square miles of land in waqf Underutilization India: 0.013% rate of return; could generate USD 1 trillion more/year Morocco rents are 2% to 6% of market rents; produce less than 50% needed for basic maintanence Indonesia: have potential of earning USD 1.9 billion/year Findings: asset management

12 Cross-cutting barriers
Space to integrate the awqaf into wider social processes by separating management of religious and charitable waqf Opportunity to reignite the waqf’s cultural legacy through new management incentives Need for innovative legal and financial mechanisms within the tradition of Islamic jurisprudence Demand to improve transparency and availability of data related to waqf holdings. Cross-cutting barriers

13 Questions Rana Amirtahmasebi: ramirtahmasebi[@]
Bernadette Baird-Zars: Abdulla Darrat: Questions

14 Singapore: 150 units, 130 million invested. Rapidly income-producing
Singapore: 150 units, 130 million invested. Rapidly income-producing. Warees waqf management. Putting into practice

15 Singapore: 150 units, 130 million invested. Rapidly income-producing
Singapore: 150 units, 130 million invested. Rapidly income-producing. Warees waqf management.

16 Putting into practice

17 Putting into practice Land
Remains in permanent endowment, cannot be sold and must serve dedicated social purpose in perpetuity. Previously managed by Ministry of Aqwaf, now managed by Municipal Redevelopment Company. Management and coordination: Municipal Redevelopment Authority. Likely a waqf board and management entity inside of MRA. Pays developer upon satisfactory completion of units. Qualifies residents, matches them to finance. Manages and maintains property. Collects income from rent-producing units, such as stores on the bottom floor. Ensures compliance to purpose of waqf. Construction and development finance Private banks to provide economical, sharia-compliant project finance. Financing for families (for long-term lease) Government housing bank; private banks or housing finance entities. Will require negotiation with management company. Residents Low-income families who are deserving and qualify for the original purpose of the waqf; waqf board can set income level and/or special needs (such as widows, etc). Putting into practice

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