Islamic finance sector also benefits non-Muslim nations - Abdullah

Malaysia's fast-growing Islamic finance sector benefits not only the Muslim world but also non-Muslim countries, said former Prime Minister Tun Abdullah Ahmad Badawi.

The Islamic finance industry has introduced several products including waqf, which is an important Islamic institution that supports both the social welfare and economic development objectives of society, he said.

“The benefits it has historically provided are wide-ranging, including the building and upkeep of mosques, education and healthcare services, as well as guest houses, water wells and rest facilities for travellers," he said in his keynote address on "The Role of Islamic Finance and Waqf in Healthcare" on the last day of the 11th World Islamic Economic Forum.

In Malaysia, he said, the government and regulatory authorities have made eye-catching efforts to enhance the depth and diversity of the Islamic financial system over the years, which have more recently extended into important initiatives for the development of waqf.

"Hailed as the first of its kind, Malaysia established the Labuan International Waqf Foundation in 2015 with the objective of managing waqf properties based on Shariah principles.

"It recognises different types of waqf to attract domestic and international participants, including charitable waqf, family waqf, joint waqf and self-dedicated waqf,” he said.

Abdullah added that the potential of the waqf institution in improving the quality of life of Muslims remains as relevant today as in the past.

In healthcare, the innovativeness of corporate waqf pioneered by the Malaysian Johor Corporation (JCorp) is another proof that waqf is a dynamic economic instrument of Islam whose practicality remains valid regardless of the time frame and where the concept is applied or who applies it, he said.

The JCorp waqf programme was established on Aug 3, 2006 when the corporation endowed RM200 million worth of its shares in three of its public-listed subsidiaries -- Kulim (Malaysia) Bhd, KPJ Healthcare Bhd and Johor Land Bhd -- to a waqf programme.

"The waqf sector can be further developed through supportive legislation and policy initiatives.

"To this end, Malaysia and other Muslim countries should design coordinated action plans for better exploitation of waqf resources within and beyond their countries for the benefit of the Ummah," said Abdullah.

Efforts are also needed to make waqf self-supporting and economically viable, which would require, in turn, policy initiatives and law reforms, he added.