If we observe carefully, the row of five-star hotels right in front of the Grand Mosque, Makkah, are all productive waqf assets. On the front of the row of five-star hotels is clearly written waqaf Malik Abdul Aziz (waqf from King Abdul Aziz).
Hospitality traffic around the Grand Mosque is always packed with Umrah and Hajj pilgrims (during the Hajj season). Therefore, imagine how much profit these waqf-based five-star hotels make. The bigger the profit, the bigger the waqf surplus, and the bigger the benefit given to mauquf ‘alaih (the beneficiaries of waqf). Moreover, the waqf surplus is sustainable, as the waqf principal remains. This is how strategic productive waqf is.
Therefore, one of the homework for every waqf institution is to formulate a strategy on how to own strategic productive waqf assets, such as five-star hotels, in premium locations.
In the macroeconomic context, the more strategic economic assets owned by the ummah through waqf institutions, the more it will reduce the economic gap. We cannot deny that the economic gap in this country is still ranked in the top five in the world. One percent of the population controls almost half of the national wealth assets.
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Therefore, one of the homework for every waqf institution is to formulate a strategy on how to own strategic productive waqf assets, such as five-star hotels, in premium locations.
In the macroeconomic context, the more strategic economic assets owned by the ummah through waqf institutions, the more it will reduce the economic gap. We cannot deny that the economic gap in this country is still ranked in the top five in the world. One percent of the population controls almost half of the national wealth assets.
So, how is it implemented? There are at least two strategies that can be pursued by waqf institutions. First, building waqf retail infrastructure with the mu’aqat waqf pattern (term waqf). Mu’aqat waqf is an alternative for people who are not ready to endow muabbad (waqf forever). Mu’aqat waqf is possible in waqf governance in Indonesia based on Law No. 41/2004 on waqf.
In practice, Muslims work together for mu’aqat cash waqf to finance a strategic waqf project. The waqf value of each individual waqif is recorded by system. At the agreed maturity date, the principal will be returned. Meanwhile, the profit sharing is endowed in muabbad.
With the mu’aqat waqf scheme, the waqif earns jariyah rewards during the time span of the waqf contract until maturity. Furthermore, the waqif can get back his waqf principal at maturity. In addition, the waqif still receives a share of the reward from the profit-sharing value of the muabbad waqf.
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In this case, the important task of the waqf institution is to ensure that the feasibility study of a productive waqf project must be valid based on data and facts. The business prospects must be good. Thus, the strategic waqf project can later generate significant surplus.
Second, accessing individual and corporate investments. This means that waqf institutions must open networks to entrepreneurs or companies that are willing to cooperate in financing strategic waqf projects with a profit-sharing scheme within a certain period of time.
Under the above scheme, the investor is entitled to a profit share from the waqf surplus generated within an agreed period of time. After the period is reached, the waqf asset is fully endowed to the waqf institution. The investor entrepreneur or company no longer has any shareholding in the productive waqf asset.
The next question is how to access entrepreneurs or companies that are ready to finance waqf projects with investment schemes? This is where it is important for waqf institutions to build and expand a network of strategic relationships, both domestic and international.
We have no shortage of Muslim entrepreneurs and conglomerates. Perhaps, they have not been consolidated into one big force. In this case, it is possible that the idea of waqf investment can be a means to bring together Muslim entrepreneurs and unite them in the movement to build the strategic economy of the ummah based on waqf.
Therefore, a strategic step that should be taken by waqf institutions is to put the idea of the synthesis of waqf and investment in the grand narrative of building a waqf-based strategic economy of the ummah. Then, this narrative is reviewed, discussed, and criticized constructively. In the end, it is agreed upon and implemented together in order to build an Indonesian waqf civilization.
Written by Muhammad Syafi’ie el-Bantanie
(Practitioner of Dompet Dhuafa Waqf Development and Investment Institute)