In Malaysia, waqf comes under the purview and administration of the State Islamic Religious Councils (majlis). Laws and regulations are prescribed through enactments of the 13 states within the Federation and those of the Federal Territory. Waqf is mostly divided into two types of laws: wakaf am and wakaf khas. The first kind is when no specific conditions are specified by the donor upon making the waqf, whereby the benefits go to the ummah in general. The second type is where the donor specifies the beneficiaries or any other aspects that are permissible by Shariah upon creation of the waqf. Waqf meant for the families of the donor for a specified period of time falls under wakaf khas, and after the expiry of that certain period, wakaf khas becomes wakaf am.
Within the distributive justice framework, the current status of waqf in Malaysia can fairly be described as underdeveloped when compared to the role that has been assigned to waqf. Studies have showed that total zakat collected for Malaysia has grown steadily at around 15% per year since 1993. This is evidence of Muslims’ willingness to perform their obligatory religious duties concurrently with the country’s economic progress. This seems to imply that the underdevelopment issue surrounding waqf in Malaysia can only be ascribed to the way waqf is currently being administered.
In view of the established nature of the legal framework for waqf, the problem largely rests with the administrators’ machinery. Broadly speaking, the tasks in managing a waqf involve preservation of wealth, maximization of benefits and distribution of benefits to the needy. Given the organizational structure involving management skills, we can deduce that the problem boils down to the quality of the management. This has negative effects on society.
Two studies on waqf in Malaysia have been conducted. While there have been various calls for revamps of the waqf institution in Malaysia, things have moved at a rather slow pace. While the majlis is empowered to administer waqf properties so as to generate income and profit, there seems to be a lack of ideas and expertise on the part of the majlis. In practice, the majlis is run by a small group consisting mainly of clerical staff, save for the head, who is normally a religious scholar with no expertise in business. Three broad problematic areas were identified in the waqf of the federal territory.
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Insufficient manpower for administration.
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Implementation issues: land and properties handed over to the majlis being improperly registered, the purpose of the waqf not being stated clearly, the majlis lacking power to take action against the improper use of the waqf properties and legal constraints to registering in the name of the majlis for plots of land that are less than an acre.
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Problems such as unproductive land with no growth potential, or donors naming co-administrators who are non-Shariah compliant.
A recent study conducted by Siti Rokyah of the International Islamic University of Malaysia (IIUM) identified outdated financial reports and a lack of financial reporting and accounting by the State Islamic Religious Councils (SIRC) as being a key issue. Siti Rokyah’s study also covered areas of waqf. Her findings included the following:
(a) SIRCs do not have a proper waqf financial procedure.
(b) SIRCs do not have specific personnel to handle the accounting and financial matters regarding waqf. The accounts departments were maintaining the baitul mal and waqf accounts concurrently.
(c) SIRCs do not maintain proper waqf assets accounts, such as a fixed assets register.
Siti Rokyah recommended a whole host of accounting and policy measures that would help waqf to be professionally managed by the SIRCs. Amongst others, her recommendations included the involvement of the Malaysian religious council (JAKIM) and Malaysian Accounting Standards Board.
Dr Monzer Kahf, a former senior economist at the Islamic Development Bank (IDB), has observed that the development of waqf in the rest of the Muslim world is currently hindered in many aspects. First and foremost, he opined that waqf is not part the public sector and should not be managed by the government. “The creation of awqf is certainly not an invitation to the government authority to dominate the area of benevolent activities in society. Studying the history and fiqh of awqaf as developed throughout the centuries and looking into the Shariah rulings and fatwas issued in various Muslims cities and countries, however, indicate exactly the opposite.” And he went on further to say: “Everybody knows that government is a bad manager of economics enterprises; it is also a worse manager of benevolent projects.”
Due to the many impediments identified by these researchers, it can be presumed that many waqf lands in the hands of various state governments and state religions councils or majlis are currently lying idle. Perhaps what is needed now for Malaysia is a central agency to regulate waqf affairs, similar to the role played by Bank Negara Malaysia and the Securities Commission for financial institutions. The setting up of the Department of Awqaf, Zakat and Haji at the Prime Minister’s Department could be seen as a step in the right direction. However, it is too early to tell how this Department will serve the ummah in the near future in achieving the distributive justice goals. For the central agency to be effective in regulating the waqf administrator at state levels, the agency must be given legal validation.
The Islamic world view of philanthropic endowment is well established, being highly desirable for the individual and for the ummah. For the individual, a well-planned waqf promises much happiness for the donor’s wellbeing in the Hereafter. For the ummah, waqf can help to achieve distributive justice. As such, the institution of well-managed waqf holds many promises for the needy within the ummah. Islamic history has many examples to attest to this. However, the state of affairs of waqf at present indicates that there is much still to be done.
The author is an Islamic finance analyst for Azmi & Associates, a legal firm specializing in corporate commercial law in Malaysia. He can be contacted by email at:
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