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Potential of Waqf to Finance the Social Development Projects.

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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).

 Conclusion

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. 

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President Solih ruling against wishes of the people: Nasheed

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Despite the electoral pledge by Maldivian Democratic Party (MDP) to hold a constitutional referendum to decide on switching to a parliamentary system of governance, President Ibrahim Mohamed Solih is currently running the government against the wishes of the people, states MDP leader and Parliament Speaker, former President Mohamed Nasheed.
Nasheed, who has announced his intention of running in the MDP primary for the 2023 presidential elections against President Solih, travelled to GDh. Thinadhoo to launch his campaign Friday.

Speaking at a rally Friday evening, Nasheed said the decision by President Solih to run the government without holding a referendum was “a big mistake”.

He asked President Solih to hold the referendum “as was decided by the people”.

“I am calling for government to be run based on what the people want. The government must be composed based on what the people decide. I told the president that I wished for him to prioritize this when he began his administration. There are many inconsistencies in this. These inconsistencies will ultimately prove an obstacle to our development,” he said.

Nasheed said that MDP’s manifesto, which the coalition partners had endorsed, called for a referendum within the first 18 months of the administration.

It isn’t wise to make new pledges without first delivering the electoral pledge to hold the referendum, he said.

All government coalition leader except for Nasheed have since rejected plans to switch to a parliamentary system, citing that the current political and economic climate did not accommodate such a significant change.

Source(s): sun.mv

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Small grant recipient organizations selected

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By: Fathimath Lauza

Bank of Maldives Selects Small Grant fund Organization .According to BML, the project was announced as part of its 40th anniversary celebration.

BML Small Grants Fund is open to organizations implementing sustainable development and environmental projects.

8 projects will be selected from the projects submitted and MVR 250,000 will be paid to each project.

Through BML Small Grants, 8 projects submitted by NGOs have been selected to win a grant of MVR 250,000 to carry out community-based projects around the areas of sustainability, climate change mitigation and adaptation.

The 8 organizations selected for this small grant are:

1. Maldives Ocean Plastic Alliance (MOPA)
2. Huvadhoo Association for Tourism (HAT)
3. Vaadhoo Association for Future Development (VAFD)
4. Kumundoo Revival Initiative (Kri)
5. Women in Fuvammulah
6. Small Island Research Group
7. Huvadhoo Aid
8. Kihaadhoo Development Society (KIDS)

BML is celebrating its 40th anniversary and is doing various activities.

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New high commissioners from Pakistan and Singapore have presented their credentials to President

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The credentials were presented by the new Pakistan High Commissioner Vice Admiral (Retired) Muhammad Fayyaz Gilani, and new Singapore High Commissioner Soo Kok Leng in separate meetings at the President’s Office on Tuesday.

Meeting the Pakistan High Commissioner Gilani afterwards, President Solih congratulated him on his new appointment.

H.E. Vice Admiral (Retd.) Muhammad Fayyaz Gilani, presented his credentials to H.E. President Ibrahim Mohamed Solih.

They discussed the long-standing historical relations between the two countries, which both agreed were based on mutual respect, understanding, shared values, and faith.

They also discussed ways to further enhance cooperation at regional and international fora on mutual interest areas, including education, health, sports, and defence.

Speaking at the meeting, President Solih conveyed his deepest sympathies and condolences to the government and people of Pakistan following the devastation and loss of life caused by the recent floods in Pakistan.

They concluded the meeting in the hopes of renewed commitment to strengthening bilateral and multilateral cooperation between the two countries.

In his meeting with Singapore High Commissioner Soo, President Solih congratulated him on his new appointment and reaffirmed the two countries’ long-standing bilateral relations, which he said was based on shared values and people-to-people contact.
President Solih stated that Singapore is an important development partner for the Maldives.

They also discussed various issues of common interest, including regional and international collaboration, trade and investment cooperation, tourism cooperation, and climate adaptation.

High Commissioner Soo also commended President Solih and his administration on the successful management of Covid-19 in the Maldives.

Before concluding the meeting, President Solih and High Commissioner Soo expressed their commitment to further strengthen the long-standing bilateral and multilateral cooperation between the two countries.

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