STRUCTURAL RE-POSITIONING ISSUES OF WAQF AS A THIRD SECTOR ORGANISATION INTO THE MAINSTREAM ECONOMY

Dr. Mohd Nahar Mohd Arshad ma.nahar@iium.edu.my  Centre for Islamic Economics, KENMS, IIUM

Prof. Dr. Mohamed Aslam Mohamed Haneef  mdaslam@iium.edu.my  Centre for Islamic Economics, KENMS, IIUM

ABSTRACT

Waqf is considered to be one of the most important institutions of third sector (voluntary sector) that exists in the Islamic heritage. Modern mainstream economy has downplayed the crucial roles of the third sector organisations (TSOs), focusing more on two-sector economic model, characterised by the dominance and conflicts between the public and private sectors. A theoretical model that encapsulates the third sector (including waqf) together with the public and private sectors is discussed in this study. This model is argued to be not only economically viable, but also ethically superior, in achieving goals of socio-economic development. Modern re-emergence of waqf, however, requires a clear understanding of structural re-positioning of the institution within the mainstream economy. Structural re-positioning issues of waqf, not just as a third sector organisation, but also as corporation (e.g. waqf bank and corporate waqf) as well as public endowments (state initiated waqf) are further analysed in this study. We stress that waqf is a value-loaded and value-driven institution. In the exuberance to modernise the institution, we need to be careful not to compromise the novelty of waqf institution.  To strengthen the roles of waqf, the study also calls for multi-dimensional improvements in the management of TSOs.

Keywords: Third sector, waqf, voluntarism, value, sustainability.