Sustainable Development through Waqf Wasim Abdul Wahab

Why Use Islamic Finance for Development? Islamic finance is based on principles of equality, justice and risk sharing It provides customized solutions for all needs linked to the real economy, thus promoting financial stability Islamic finance can play a vital role in alleviating poverty and enhancing financial inclusion Islamic finance can help in resource mobilization through alternate means, thus broadening the financial net. Thus Islamic finance has potential to play a unique role in promoting sustainable economic and social development globally – Specially through Waqf.

Islamic Financial Sector – At a Glance Breakdown of Islamic Financial Services Industry by Sector and by Region (USD billion, 2017)

International and Multilateral Institutions Promoting the Use of Islamic Finance Including Waqf Islamic Development Bank - IsDB World Bank Asian Development Bank - AsDB International Monetary Fund - IMF United Nations Capital Development Fund - UNCDF United Nations Development Program – UNDP UK AID (Previously DFID) GIZ AFD

Waqf – The Islamic Social Finance Sleeping Giant According to some estimates the Islamic endowment industry could be worth more than US$1 trillion; however, the true size is almost impossible to estimate as many waqf assets are private or family Waqf. Historically, the institution of Waqf provided essential services at no or very small cost to the state. There are Waqfs for agriculture, health, education, scientific research, victims of war, and even animal care.

Waqf Benefits of Waqf Reduce un-employment Poverty eradication Contribute to socio-economic progress Unlock beneficiaries’ economic potential Achieving philanthropic objectives Govt. expenses on social sector reduced. Sustainable funding solution Waqf

Cash. (Permanent or Temporary) Type of Waqf Assets Property: Land, Houses, farms,  buildings, medical equipment, computers, schools, water wells, and any other asset which benefits the community. Businesses: Also called Corporate Waqf in which an x number of shares are dedicated to Waqf and whatever profits they earn goes towards charity for the poor and needy. Wealth: Cash. (Permanent or Temporary)

Beneficiaries of Waqf Public: Supports the poor and vulnerable. Private/Family: Benefits the relatives of the endower or specific individuals. Combined: Giver dedicates a part of the Waqf to his family and another part to the public, so that both receive the benefits.

Role of Islamic Finance in Supporting the Sustainable Development Goals - SDGs Financing for Infrastructure Development Financing Innovation to Achieve Efficiency Financing for Social Development In this slide, we attempted to map all 17 SDGs based on the target laid down and we found that at least one of the target in each goal need funding or finance requirement for it achieve its objective. Based on our quick study, we can group all the funding activities into three board categories as follows: Finance for Social Development. - What we mean by ‘Finance for Social Development’ is that to raise or mobilize funds to finance the social aspect of the society for example, we should be able to raise sufficient funds to finance any program related to fighting poverty and hunger. Financing for Infrastructure Development. - Meanwhile, the term ‘Financing for Infrastructure Development’ means that sizeable amount of funding is needed in developing any infrastructure related projects for example in achieving Goal no 6: Clean Water and Sanitation requires huge funding to build the necessary infrastructure. Financing to promote innovation to achieve efficiency. Lastly, the term ‘Financing to promote innovation to achieve efficiency’ is referring to the funding requirements that are needed for any innovation activities. Innovation, as the name suggest is normally associated with high risks activities as any new innovation is carrying high failure rate. As such, a specific mechanism shall be devised to fund this kind of activities. SDG 7 on Affordable and Clean Energy for example requires high amount of funding for new innovation.

Islamic Finance and SDGs

Comprehensive Islamic Finance Solutions in Supporting SDGs Category Number of SDGs Islamic Finance Mechanism Financing for Infrastructure Development 8 SDGs (SDG 4, SDG 7, SDG 9, SDG 11, SDG 13, SDG 14, SDG 15, SDG 17) Raising wholesale funding mainly from 1. Sukuk programme 2. Islamic Syndicated financing Finance for Social Development 6 SDGs (SDG 1, SDG 2, SDG 3, SDG 5, SDG 8, SDG 10) Islamic Social and Financial Inclusion. 1. Zakat 2. Waqf 3. Islamic Microfinance (including Microtakaful) Financing to Promote Innovation in Achieving Efficiency 6 SDGs (SDG 6, SDG 7, SDG 8, SDG 13, SDG 14, SDG 15) Equity based structure is more suitable in promoting innovation such as 1. Islamic Private Equity. 2. Islamic Venture Capital 3. Equity Funds 4. Crowdfunding

IsDB – Awqaf Sector Development Creating enabling environment, capacity building and promulgation of Waqf law. International Waqf Center in Madinah, Saudi Arabia Awqaf Properties Investment Fund (APIF): APIF was established in 2001 for providing financing for the development of idle Waqf lands, purchase of constructed properties and renovation of buildings. Beneficiaries of APIF financing are Awqaf Ministries, waqf and charitable organizations in IsDB member and non-member countries. More than 60 projects in 32 countries worth more than US$ 1.0 Billion.

Together, we build a better world through Waqf! Thank you – Merci Beaucoup