UNLOCKING ISLAMIC LAND ENDOWMENTS(WAQF) FOR SOCIAL DEVELOPMENT 25 March 2014 World Bank Land and Poverty Conference Bernadette Baird-Zars, Rana Amirtahmasebi,

UNLOCKING ISLAMIC LAND ENDOWMENTS(WAQF) FOR SOCIAL DEVELOPMENT

25 March 2014World Bank Land and Poverty Conference

Bernadette Baird-Zars, Rana Amirtahmasebi, Abdulla Darrat

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Waqf as a land tool: Extent and status• Multi-country survey of administrative, legal and

management context• (a) administration and management bottlenecks and

opportunities,• (b) local legal innovations that could support a contemporary

development agenda• (c) lessons from policy and programmatic experiments in

regeneration of properties. • Major findings

• Administration and legal framework• Current management and utilization

• Cross-cutting obstacles• Questions

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WHAT IS WAQF?

Waqf/Awqaf• Establishes permanent assets with a purpose – social

development• Some are religious; this paper will discuss

‘charitable’ waqf for social aims• Assets can be liquid or semi-permanent; this paper

will focus on land, particularly in urban or peri-urban areas

• Legal framework for management encouraged cross-subsidization, market rents• Local boards of trustees, local court oversight

• Major provider of services historically; preserves endowments.

• Prominent method for women to control land

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EXTENT

Assets extensive but not well mapped• Neighborhood surveys suggest 10-20% of urban land in

waqf• Current Indian waqf board estimates place current asset

value at over USD 1 trillion• Largest landowner in Indonesia• A 2010 global snapshot by Ernst and Young estimates at

least 105 billion in waqf, 2/3 rds in property

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NEW LENSES FOR OLD TOOLS

Examining waqf for development • Poverty alleviation• Leveraging private sector

participation in social development

• Growing local capacity – civil society and municipal management for investment and operations of services and social infrastructure

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UNIQUELY PLACE AND LAND-BASED

Cities Waqf• Need land for social

purposes – affordable housing, services

• Have little funding for expanding basic services, providing social infrastructure

• Have few established tools to partner with private sector, civil society

• Service area inherently place-based: neighborhood or city-scale

• Location in historic centers, areas just out of historic centers, large areas of peri-urban agricultural lands.

• Often host informal settlements

• Respected as method for non-statal delivery of services

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STATE OF CURRENT KNOWLEDGE

• A rich literature examines historical role and legal configurations of waqf

• The few studies that describe contemporary waqf underscore three points:• Current administrative frameworks underinvest, and

are often purely public• Diversity in country-level tools and legal traditions• Status of assets, eg current usages, extents, and

new investments, only exist in city-level or neighborhood level profiles

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METHODOLOGY

On-site experience in Morocco, Iran and Syria

Initial scan and matrix of 18 countries

In-depth analysis of 6 countries: Afghanistan, India, Indonesia, Iran, Morocco and Uzbekistan• In-depth review published academic literature• National-level reports and studies• Public-sector data and official publications• Conversations/interviews with officials, local experts in-country

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FINDINGS: GOVERNANCE

Local leaders/association

Local governments /Neighborhoods

National-states National ministry

Single religious authority

Local Centralized

Afghanistan (de facto)Some IndonesiaMorocco (family awqaf and sufi brotherhoods)Iran (management)

Uzbekistan

IndiaSaudi ArabiaMorocco

Iraq (by sect), Syria, Egypt, Jordan, Lebanon, AfghanistanKuwait (Consortium)

Iran

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Legal and management framework type

Examples from countries with waqf

Centralized public - under direct administration and purview of national government agency.

Algeria, Egypt, Iraq, Morocco, Syria, Turkey, Iran (religious authority)

Centralized with regional boards Saudi Arabia, India, Southeast Asia

Centralized ‘network’ of institutions Kuwait

Local community boards or managers

Previously widespread. South Africa, Indonesia to some extent.

Officially removed from legal system. Many waqf properties persist de facto.

Russia, Tunisia, former Soviet Republics 

• Scale of governance of current management systems, mapped along a spectrum of centralization and public/non-public management

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FINDINGS: ASSET MANAGEMENT

Across all countries surveyed:

Significant waqf land assets• India: USD 19.5 billion estimated in waqf assets;

600,000 acres• Indonesia: 594 square miles of land in waqf

Underutilization• India: 0.013% rate of return; could generate USD 1

trillion more/year• Morocco rents are 2% to 6% of market rents; produce

less than 50% needed for basic maintanence • Indonesia: have potential of earning USD 1.9

billion/year

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CROSS-CUTTING BARRIERS

• Space to integrate the awqaf into wider social processes by separating management of religious and charitable waqf

• Opportunity to reignite the waqf’s cultural legacy through new management incentives

• Need for innovative legal and financial mechanisms within the tradition of Islamic jurisprudence

• Demand to improve transparency and availability of data related to waqf holdings.

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QUESTIONS

Rana Amirtahmasebi: ramirtahmasebi[@]worldbank.orgBernadette Baird-Zars: bbairdzars[@]alarifeassociates.comAbdulla Darrat: adarrat[@]alarifeassociates.com

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PUTTING INTO PRACTICE

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PUTTING INTO PRACTICE

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PUTTING INTO PRACTICE

Land Remains in permanent endowment, cannot be sold and must serve dedicated social purpose in perpetuity. Previously managed by Ministry of Aqwaf, now managed by Municipal Redevelopment Company.

Management and coordination: Municipal Redevelopment Authority. Likely a waqf board and management entity inside of MRA. Pays developer upon satisfactory completion of units.  Qualifies residents, matches them to finance. Manages and maintains property. Collects income from rent-producing units, such as stores on the bottom floor. Ensures compliance to purpose of waqf.

Construction and development finance

Private banks to provide economical, sharia-compliant project finance.

Financing for families (for long-term lease)

Government housing bank; private banks or housing finance entities. Will require negotiation with management company.

Residents Low-income families who are deserving and qualify for the original purpose of the waqf; waqf board can set income level and/or special needs (such as widows, etc).