Potential of Waqf to Finance the Social Development Projects.
Ministry of Islamic Affairs is the executive body responsible in Maldives to carry out religious tasks and waqf is also regulated by the Ministry of Islamic Affairs. The concept of immovable waqf is not common in Male’ as land is a scarce resource and further, the Land Act prohibits land in Male’, to be declared as waqf. In this regard, it is observed that Section 37 of the Land Act states: (a) any land in the Maldives or any fixed assets on such a land can be declared to be a religious endowment only if declaring it to be a religious endowment does not conflict with government policies on land use for the particular island and this shall further be subjected to the attainment of a written approval from the Ministry of Home Affairs, Housing and Environment; (b) land or fixed assets on a land in Male’ cannot be declared as religious endowments. However, it is imperative to note that waqf is an Islamic social finance institution and a tool that could be utilized for the social developments of islands without relying on the government budget to support such causes.
What is Waqf?
Waqf (Islamic endowment) is an Islamic social financial institution which is also considered as a redistributive institution. Though the term “waqf” is not found in Quran, Muslim jurists have derived its legitimacy from various sources of Islamic law including Quran and Sunnah. There are two kinds of waqf: immovable waqf and movable waqf which is cash waqf that has been approved by the Islamic scholars. Irrevocability, perpetuity and inalienability are essential conditions to create a waqf. The purpose in which waqf has been utilized is not limited only to religious matters; but it can be used for any purpose which is beneficial to the society that does not contradict with the tenets of Islamic law. Waqf is known as a sadaqat jariyah (on-going charity) while sadaqat is known as a one-time charity that could be given to any type of beneficiary identified by the giver at any time. Waqf is also different from zakat. Zakat is the third pillar of Islam which is compulsory for all eligible Muslims to pay to the legal beneficiaries mentioned in Quran. As such, zakat is a due right on specific items of assets/properties, in specific percentages with consideration of the passage of a year (hawl) and the satisfaction of nisab.
Awqaf Sector of Maldives
There are only two cash waqf funds established by the Ministry of Islamic Affairs. They are the Religious Awareness Waqf Fund and the Mosque Waqf fund. These two funds are maintained in a Public Trust Account formed under the Public Finance Act 2006. There is a Trust Committee set up to specifically deal with the funds and the ultimate supervisor of the fund in the Ministry of Finance & Treasury. Dharul Eeman Waqf project is an innovative waqf project successfully implemented by the Ministry of Islamic Affairs where the Ministry has developed a building on a land and has dedicated all the revenue received from renting of the building to Mosque waqf fund. By doing this, the Ministry intends to have enough financial capability to renovate mosques every year without waiting the government to approve funding for the purpose. Due to weak governance, though the project faced issued in implementing it as anticipated, it is hoped that the Ministry would be able to resolve governance issued and implement the project in a sustainable manner.
Sustainable Waqf Models for Island Councils to finance Social Development Projects
Island councils can play a leading role in reviving waqf in the country for social development activities. Below are some successful ways in which other countries in the world has implemented waqf for the purpose and the same approach could be customized and replicated in Maldives.
- Waqf Share Scheme (successfully practiced in Malaysia, Indonesia, Kuwait and the UK): In waqf share scheme, any specified institutions appointed by the government may establish this scheme and become the mutawalli (trustee). The appointed trustee will issue waqf shares in different values and sell the shares to donors for a specific project. The donors can buy the shares according to their affordability. The donors will receive cash waqf certificates as evidence of purchasing the waqf shares of the specified amount for the specified project. The amount collected from the sale of waqf shares will be managed by the trustee in terms of investment of the funds. The revenue generated from the investment will be used for financing the specified projects.
- Waqf Share Scheme (successfully practiced in Singapore): In this scheme, Muslim employees’ salaries are deducted through the Central Provident Fund (CPF) Board, i.e. Singapore’s national social security organisation. Monthly contributions of between USD$1 and USD$7 are made by Muslim employees. The amount of deduction depends on the Muslim employee’s monthly gross salary. The salaries of the Muslim employees are automatically deducted through an automatic check-off system whereby the salary is deducted by their employer and channelled through the CPF with Majlis Ugama Islam Singapore (MUIS) as the collecting agent. The collected amount is to finance charitable purposes such as building and maintaining mosques, funding educational programmes and building da’wah centres.
- Corporate Waqf Scheme (successfully practiced in Malaysia, Turkey, India, Pakistan and Bangladesh): In this scheme, first founder, either a private or public corporation known as the mother corporation/main founder, will establish an associated waqf institution as the trustee. The main founder will ask all its subsidiaries to contribute part of their profits or dividends to the corporate waqf on a regular basis, besides calling other donors such as individuals, companies and institutions to contribute cash waqf to this associated waqf institution. The associated waqf institution, in its role as the trustee, will manage and invest the accumulated cash waqf from the different contributors. The revenue generated is then channelled to the specific project after operational expenses have been deducted
- Waqf Takaful Model (successfully practiced in in South Africa and Pakistan): In this model, Takaful operator donates a seed fund to establish a Waqf fund for the product/policy. On a monthly basis, premium contributions made by participants are split into two portions – a portion for tabarru’ contribution to Waqf fund and a portion to participants’ risk account. The appropriation (based on percentage of premium contributed) shall be decided and agreed upfront between the takaful operator and participants. Any takaful claims will only be paid/deducted from the participants’ risk account while any surpluses will be credited back into the same account. Both Waqf fund and participants’ risk account will be invested in Shariah compliant instruments to generate returns where the return from the participants’ risk accounts will be credited back to the account. Returns from the waqf fund however, will be channelled to the waqf beneficiaries as approved by the takaful operator’s Shariah Committee. In the event of death, the deceased’s beneficiaries will be compensated with the takaful benefit from the participants’ risk account. No further amount is paid on behalf of the deceased to the Waqf fund (hence, the contribution to waqf fund is limited to the amount contributed while the participant is alive).
Apart from the above described waqf models, there are many other successful waqf models practiced in the world as well. The other successful waqf models that could be considered are: cash Waqf-linked Sukuk; Cash Waqf Deposit Product; MyWakaf Initiative; Waqf Fund Model for Education; Waqf Unit Trust Fund; and Waqf Using Blockchain Technology. It is anticipated that the stakeholders of waqf in Maldives will try to revive waqf in the country by adopting the contemporary application of it.
Dr. Aishath Muneeza is an Associate Professor at the International Center for Education in Islamic Finance.
The Cambodian Prime Minister arrives in the Maldives on an official visit
The Prime Minister of the Kingdom of Cambodia, Samdech Akka Moha Sena Padei Techo Hun Sen, arrived Sunday morning on an official visit to the Maldives at the invitation of H.E. President Ibrahim Mohamed Solih. It is Samdech Techo Prime Minister Hun Sen’s first visit to the Maldives.
The Cambodian Prime Minister and accompanying delegation were received at Velana International Airport (VIA) by the Minister of Foreign Affairs, Abdulla Shahid (ODRI). The government will hold a ceremony on Monday to officially welcome the Cambodian Prime Minister to the Maldives.
During the visit, President Solih would meet with Samdech Techo Prime Minister Hun Sen and hold official talks on strengthening bilateral cooperation, followed by the exchange of memoranda of understanding (MoUs) between the two countries. President Solih and the Cambodian Prime Minister would also deliver a joint statement on the outcomes of their discussions.
The Maldives and Cambodia established diplomatic relations on September 21, 1995.
Source(s): President Office.
Hinnavar port and outer wall construction is completed.
The contractor for the Hinnavaru Port Development Project, Maldives Transport and Contracting Company (MTCC), has announced that the land and outside wall have been finished. On November 10, 2020, the Ministry of National Planning, Housing, and Infrastructure tasked MTCC with expanding and modernizing Hinnavaru Port.
Hinnavaru is a significant island in the atoll that is linked to the economic growth of Fadhipolhu. Lack of consultation is a hindrance to transforming the atoll’s island area into a commercial power. A dam was formerly utilized to be designed by everybody in the north of Hinnavaru. After a piece of the port collapsed and the port was rendered unusable, efforts are being made to extend and improve the port in conjunction with the port.
Work on the damaged segment of the harbour and the building of the embankment were completed as part of the project. The exterior wall and groining have also been finished. According to the overall project status, 66% of the work has been accomplished. Hinnavaru’s new port will be 162 meters long and 47 meters broad. The dam work will fill an area of 65,170.76 cubic metres. It will also comprise the building of a 421-metre subterranean tunnel, a 123.9-metre outer wall, and a 140.55-metre revetment.
Fishing boats are constantly present in Hinnavar. Hinnavaru Council also recognized the island’s abundance of private launches and boats. According to the Hinnavaru council, traders and ordinary people suffered greatly as a result of the port’s failure.
According to the Hinnavaru Council, the port development project will alleviate the present challenges in implementing the suggestions, and no more economic growth will be brought to the island.
Security heightened at Indian High Commission in Maldives over arson threat
Security measures at the Indian High Commission in the Maldives have been heightened following arson threats.
Security measures at Indian High Commission in the Maldives were heightened in connection case under investigation by the police. No further details were disclosed.
Security measures were heightened at the Indian High Commission over a tweet by former State Minister for Finance Abbas Adil Riza, encouraging an arson attack on the building.
Abbas, in a tweet, alleged that arson was committed at Addu City during the unrest by members of Maldivian Democratic Party (MDP) on February 8, 2012 after then-President Mohamed Nasheed’s government was overthrown, was on the orders of India. Noting that revenge has yet to be taken over the matter, Abbas called to set ablaze the Indian High Commission in the Maldives.
Foreign Ministry has also expressed concerns over Abbas’ tweet.
In a statement, the Ministry, said that the government was investigating the case as a serious matter whereas security forces have administered the necessary security measures over the threat.
Commissioner of Police Mohamed Hameed has described Abbas’ tweet as an act of terrorism. On this note, he said that encouragement of terrorism will be investigated as very serious matters.
Political parties including MDP, Adhaalath Party and MRM have condemned the tweet as well.
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