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Waqf, perpetual charity and poverty alleviation

International Islamic University, Kuala Lumpur, Malaysia
Keywords Developing countries, Economics, Ethics, Religion Abstract This paper discusses the potential role of the institution of waqf in poverty alleviation, particularly in the developing world. It attempts to define a new approach to poverty analysis and suggests a way to make the role of waqf more effective in the poverty alleviation and socioeconomic development of a resource-poor country.

Perpetual charity and poverty alleviation 135

AbulHasan M. Sadeq

Poverty is a universal problem. The great majority of the world population lives in the low-income countries and hence many of them suffer from abject poverty. A minority of the world population lives in the developed countries, but there are poor people there, too. There are many ways to handle the poverty problem, starting from preventive to curative measures. An important way to alleviate poverty is charity, which has been playing a role and can potentially be an effective means to overcome the poverty problem. Charity has again many forms, but a long-lasting form of charity is one that has the characteristic of perpetuity. The institution of waqf is such a perpetual charity in the Islamic ethical system. The objective of this paper is to discuss and analyze the potential role of the institution of waqf in poverty alleviation with special reference to a resourcescarce, low-income country. In particular, the specific objectives of the paper are to: . deal with the poverty scenario of the world with special emphasis on the developing world and a new approach to poverty analysis; . analyze the role of waqf in poverty alleviation in the historical and contemporary contexts; and . suggest a way to make the role of waqf more effective in the poverty alleviation and socio-economic development of a resource-poor country. The paper has five sections. The first section presents the poverty scenario in the present world with an appropriate approach to poverty analysis and its alleviation. The role of waqf in poverty alleviation is analyzed in the second section in historical and contemporary contexts. The third section proposes a way to make the role of waqf more effective in poverty alleviation and socioeconomic development, while the fourth section analyses how waqf can be used as an instrument of general welfare for all and its interactive process in the multidimensional institutionalism for poverty alleviation. A final section concludes the paper.

International Journal of Social Economics, Vol. 29 No. 1/2, 2002, pp. 135-151. # MCB UP Limited, 0306-8293 DOI 10.1108/03068290210413038

International Journal of Social Economics 29,1/2 136

Poverty and poverty alleviation Poverty is an affront to human rights, including basic rights to food, health, clothing, shelter, education and employment. Yet a large number of the world's population are deprived of their basic human rights:
Fifty years after adoption of the Universal Declaration of Human Rights, one-third of the developing world's people are enslaved by a poverty so complete that it denies them fundamental human rights (UNDP, 1998a).

Poverty exists amidst plenty even in those countries that have been doing better (see Ariffin, 1994). Poverty should not be viewed merely as a phenomenon that relates to low income alone. A more ``comprehensive'' view should be adopted to address the problem of poverty, since it is a multi-dimensional phenomenon. Characteristics of poverty-related phenomena may be divided into three categories: (1) low income; (2) non-income factors such as poor health and low literacy rate; and (3) lack of access to opportunities such as physical facilities, resources and employment. Although there may be a number of variables that are related to poverty under each of these categories, we may usefully single out four variables, namely income level, education, health and infrastructure, which have major bearings on poverty. These variables may be considered to have causal relationships with poverty in a two-way causality. Poverty leads to low levels of education (poverty causes illiteracy), but the poor are poor due to lack of education (poverty is the effect of illiteracy). The poor people have poor health since they are deprived of nutritious food, medical care, and again their productivity is low due to poor health and hence they are poor. Similarly, low income is an obstacle to gaining access to income-earning capabilities, and again the poor are poor because they have low income. In this sense, the four variables are both causes and effects of poverty, as indicated by arrows in Figure 1.

Figure 1. Poverty and factors with causal relationship

A poverty-alleviation program should address issues related to the four Perpetual charity variables. If peoples' access to education, health care and physical and poverty infrastructure is increased, it is expected to alleviate the problem of poverty alleviation without even any direct income-enhancement strategy. Any further incomeenhancement strategy will reinforce the positive effects on poverty alleviation. It is therefore important to take a comprehensive approach to poverty and 137 poverty alleviation. Waqf, as a constituent ingredient of the poverty alleviation program of Islam, takes such an approach. Interestingly enough, Islam provides a novel concept of poverty and poverty line as implied in the concept of zakah, which is a charity-based povertyalleviation institution in the Islamic ethical system[1]. If a person meets all his basic needs and has a surplus of income and wealth below nisab[2], he is still considered as a poor person and hence is entitled to receive zakah. Hardcore poverty is a phenomenon in which a person cannot afford to meet his basic needs including food, clothing, shelter, education, health care, and so on. In this sense, the Islamic concept of poverty and its approach towards poverty eradication are multi-dimensional and comprehensive. Islam provides a comprehensive framework to eradicate poverty from society[3]. It does not agree to have a section of population who will depend on charity or others' favors. But if there happens to emerge poverty despite such a poverty-averting framework, it suggests ways and means to handle it. It prescribes a crash program to alleviate hardcore poverty and a systematic approach to alleviate even nisab-defined general poverty. The povertyalleviation strategies of the Islamic system may be classified so as to relate to our classifications of poverty phenomena, mentioned earlier. These will involve the following measures: . Income-enhancement strategies. . Improving on non-income aspects such as health, education and so on. . Increasing access to physical facilities, resources and employment. In this system, the poverty-alleviation strategies and policies are multidimensional; one of them is charity (see Sadeq, 1997). Again, charity is of several kinds: . Compulsory charity: zakah and fitrah. . Optional charity: sadaqah (see Sadeq and AbulHasan, 1980). . Perpetual charity: waqf. The compulsory and optional charities deal with the poverty problem by adopting basically a re-distributive approach, while waqf can be used to enhance the capabilities of the poor to take care of themselves by providing access to education, health, physical facilities and so on. Thus, out of the three measures of poverty alleviation, the institution of waqf has direct relevance to the second and the third measures, mentioned above, namely: improving on non-income aspects such as health, education and so on, and increasing access

to physical facilities, resources and employment. That is, the institution of waqf International Journal of Social can effectively address the issue of poverty in its new and comprehensive approach. Economics It is interesting to note that the United Nations development program 29,1/2

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(UNDP) and some other international organizations that deal with poverty have also taken such a new approach to poverty (see UNDP, 1991, 1998a, b; United Nations, 1996; ILO, 1986; World Bank, 1990). The Human Development Report 1997 introduces the concept of poverty with a focus on:
. . . the denial of opportunities and choices most basic to human development to lead a long, healthy, creative life and to enjoy a decent standard of living, freedom, dignity, selfesteem and the respect of others (UNDP, 1997).

Also, different terms have been used by UNDP to refer to different types of poverty. For example, ``human poverty'' is defined as ``the lack of essential human qualities such as being literate or adequately nourished''; income poverty is defined as ``the lack of minimally adequate income or expenditures''; absolute poverty as a fixed income standard, for example, $1 a day poverty line, and so on (UNDP, 1998a, p. 16). Accordingly, the UNDP (1998a) presents the state of poverty in terms of income, health and literacy as in Table I. As Table I shows, about one-third of the people of the developing world live in absolute poverty (earning less than $1 a day), while 45 per cent of the population of South Asia are in absolute poverty, earning less than $1 a day. The picture of human poverty in South Asia is such that half of its children under five years of age are malnourished, 35 per cent of children who enter the primary schools never reach grade five, and about two-thirds of the female population are illiterate. This scenario is really alarming.
People not Population in Underweight expected to income survive to age children poverty under five 40 (% of total $1-per-day population) 1990-1997 1988-1994 1995 (%) (%) 32 4 29 24 45 14 39 30 17 16 10 50 34 30 14 14 7 10 16 12 31

Countries and regions All developing countries Arab States East Asia Latin America and the Caribbean South Asia South-East Asia and Pacific Sub-Saharan Africa

Female illiteracy rate 1995 (%) 38 56 26 15 63 17 52

Children not reaching grade 5 1995 (%) 22 7 8 26 35 17 32

Table I. The state of poverty

Source: UNDP (1998a, p. 17)

The new approach to poverty has recently been taken into consideration in the Perpetual charity strategies for poverty alleviation, too. Access to micro credit, education and and poverty health care has been emphasized in the recent poverty-alleviation policies and alleviation programs. Many studies have been conducted, and many projects have been taken towards this direction (e.g. ILO, 1986, 1997; UNDP, 1991, 1998a; Khan, 1994: Foundation for Development Cooporation, 1995; Getubig et al, 1993; Ashe 139 et al., 1989; Government of Malaysia, 1992; Oxfam, 1995). Waqf: a perpetual charity for poverty alleviation Before we discuss the role of waqf in poverty alleviation, let us see first what waqf is and what its essential characteristic is. Waqf is the locking up of the title of an owned asset from disposition and allotment of its benefits for a specific purpose or purposes. A waqf asset cannot be disposed of; its ownership cannot be transferred. Only its benefits are to be used for the specific purpose(s), which is (are) mainly charitable in nature[4]. In this sense, waqf is a perpetual charity and this perpetuity is its essential characteristic. The charitable purposes of waqf traditionally include educational institutions, orphanages, roads, religious establishments like mosques, graveyards and so on. Waqf is a voluntary charity characterized by perpetuity. It is voluntary in nature and hence it falls under the voluntary sector. However, this paper proposes to make it an organized matter with a deliberate effort. The institution of waqf may be usefully utilized, in an organized and deliberate manner, to provide education, health care and physical facilities to the target groups of people in a poverty-alleviation program (see the next main section). Role of waqf in history In the new approach to poverty, poverty has several dimensions: income, nonincome factors such as education and health, and access to physical facilities. If the institution of waqf can help in any or more of them, one can safely say that waqf has a role to play in poverty alleviation. Below, we shall use this criterion to see whether waqf has made any contribution to poverty alleviation in history. Waqf-like charity has a history older than Islam, which seems to have existed in ancient Mesopotamia, Greece, Rome as well as pre-Islamic Arab societies (Laum, 1914; Rockwell, 1909, Othman, 1982). It emerged as an important Islamic institution, and it got deeply rooted and flourished extensively in the Islamic civilizations. The Islamic model of waqf then influenced the world at large and thus some of the great institutions, like the famous Oxford University, have been established by following the Islamic model of waqf (Gaudiosi, 1988, pp. 1231-61, cited in Cizakca, 1998):
. . . it has been definitely established that the famous Oxford University was built on the Islamic waqf model (Cizakca, 1998, p. 11).

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In Islamic history, waqf played an important role in the provision of education, health centers, centers of socio-cultural activities in the form of mosques and shrines, and public goods like roads, bridges and so on. In some periods, such activities were based on waqf so such an extent that a large proportion of national land was waqf land endowed and earmarked for purposes that have direct bearings on poverty alleviation:
In the middle of nineteenth century, endowment property agricultural land constituted half of the size of land in Algeria, whereas it amounted to one-third in Tunisia in 1883 and one-eighth in Egypt in 1949 (Qureshi, 1967, pp. 186-7, cited in Boudjellal, 1998, pp. 3-4). . . . three-fourths of land consisting of Ottoman Empire were endowment land (Schultz, 1980, cited in Boudjellal, 1998, p. 1). . . . such endowments were among the basic support given to the authority of the caliphate in meeting the educational and health needs of society (Boudjellal, 1998, p. 4).

For centuries, the Muslim caliphates and states did not have departments or ministries to take care of ``public works, roads, bridges, mosques, schools, libraries or hospitals, for the yields of endowment properties used to cover those public needs'' (Boudjellal, 1998, p. 4). As a micro example, Zubaidah, the wife of Caliph Harun al-Rashid, made waqf of all her wealth for the purpose of a road from Baghdad to Makkah[5]. Besides land assets, cash waqf was also utilized for the designated purposes. Cash waqf used to be established by the well-off people for some specific purposes. The endowed cash used to be invested or loaned out to earn income, and the target projects were financed by the earned income. According to Cizakca (1998), health, education and welfare activities of the Ottoman Caliphate ``were entirely financed by gifts and endowments'' (see also Mandville, 1979). Thus, the institution of waqf has made its contributions in the provision of education, health and physical facilities, and hence should be treated as playing an important role in the poverty alleviation and socio-economic development agenda in history. Waqf and poverty alleviation in the contemporary world The same criteria may be used to examine the poverty-alleviation role of waqf in the contemporary world. In many Muslim countries and societies, a good number of the following activities are based on, or financed by, waqf: . Educational institutions including universities[6], colleges, schools, and most of the religious-oriented educational institutions; for instance, in Bangladesh, more than 8,000 educational institutions are based on waqf (Islam, n.d., p. 3). . Orphanages that shelter poor orphans, provide their livelihood and education[7]. . Almost all mosques which provide centers of socio-cultural activities in Muslim societies[8], especially in rural Bangladesh where about 90 per

cent of the population live. In Bangladesh, more than 123,000 mosques Perpetual charity are based on waqf; most of them have educational facilities, especially in and poverty imparting religious education. Mosques are also used as maktabs alleviation (educational institutions for rural children) and as centers of adult education and moral training (da'wah).
.

Charitable clinics, medical centers and medical establishments. For example Hamdard Foundation (a large establishment of herbal medicine based on waqf) finances a University in Karachi, a large research institution and many other social welfare-oriented organizations in Pakistan, India and Bangladesh. Shrines[9], and Eid prayer grounds (big fields endowed for biannual Eid prayers) which are used for many other social occasions and meetings. Shopping complexes and commercial centers to earn income for financing target projects. For example, Baitul Mukarram shopping complex in the Dhaka city provides employment to a large number of people and finances a publication house, a large auditorium for many sorts of activities and the national mosque.

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Some of these waqf-financed establishments are meant for the poor alone, while others are for general welfare. These activities directly help the poor by financing their expenses (for example, waqf for orphans), education, health, and also some physical facilities, which are important in the poverty-alleviation programs. Owing to waqf's potential role in poverty alleviation and socioeconomic development, many countries have established departments for public administration of waqf estates[10]. Some countries have even started ministries to deal with waqf properties[11]. With this about contemporary aspects of waqf, let us look at a specific country, namely Bangladesh. According to an official survey of waqf estates conducted in 1986 (Bangladesh Bureau of Statistics, 1998, pp. 10-49), the total number of waqf estates in the country is 150,593, out of which 97,0461 estates have registered deeds; 45,607 estates are based on oral waqf, and the rest are waqfs by use (like mosques)[12]. A good number of institutions have been developed on these waqf estates. The waqf estates house 123,006 mosques; 55,584 Eidgah (fields designated for Eid prayers); 21,163 graveyards; 8,317 madrasahs (Islamic educational institutions); 1,400 dargah, and 3,859 other institutions (Islam, n.d., p. 3). This is a list of waqf estates existing from before, which are in real estates. In fact, most of the waqf endowments are in real estates even in other cases[13]. Interestingly enough, there is a new sign of revival of the institution of waqf in the recent past in Bangladesh with its new forms and purposes. These are cash waqf, and waqf in intellectual property. The cash waqf, which created some endowment funds, has recently been instrumental in establishing some institutions of higher learning, especially some private universities.

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Another very interesting development in the area of waqf in Bangladesh is waqf in intellectual property. Waqf in this category is waqf of the copyrights of books. The present author could identify at least two waqfs in this category in the country, one of which has a distinctive characteristic that 10 percent of its revenue will be spent to help the poor and for ideological causes. This brief exposition of waqf in the contemporary world, and in particular in Bangladesh, provides some indications as to what potentials the institution of waqf does possess in making contributions to poverty alleviation and the socioeconomic development agenda of a country. Making waqf an effective instrument of poverty alleviation and socio-economic development The institution of waqf involves activities in two dimensions: (1) making endowment of waqf; and (2) administration of waqf. The former is purely voluntary in nature. Normally, a well-off person makes an endowment of waqf as an act of benevolence that is encouraged in his/her belief system. The latter, the administration of waqf, depends on the terms of waqf. Sometimes a provision is made for a voluntary nazer or mutawalli (supervisor or administrator) or a trust to take care of the waqf property. It is also left sometimes to the management of the activity to which the waqf is dedicated. Besides, there is normally a department of waqf under a relevant ministry, or an independent ministry, to play an overall supervisory role in the administration of waqf for the entire country concerned. Thus, the establishment of a waqf entity is purely voluntary in nature. It depends on the perceived intuition of the donor(s) as to its importance in the act of benevolence and social service, and not necessarily on the need of the society. Thus, it is obvious that, although it has been playing an important role, the institution of waqf will not be able to do much in its present voluntary nature in the implementation of a planned program of poverty alleviation and socioeconomic development. This is because a planned program will have some specific planned projects in the agenda. There is no guarantee that any waqf will be voluntarily endowed to finance these planned projects. Besides, such planned projects may require huge sums of investment which individual waqifs (endowers) may not be able to endow. We would like to propose a mechanism to make waqf an effective institution of poverty alleviation in a deliberate and planned manner to establish and support such planned projects by making it an organized voluntary activity[14]. The mechanism is as follows. The relevant authorities will plan some high-priority projects for poverty alleviation and socio-economic development. These projects will be directed to the waqf administration body (WAB) of the country concerned. The WAB will then prepare project profiles and invite voluntary cash waqf to finance the planned projects.

The cash waqf may be raised by issuing waqf certificates of different Perpetual charity denominations against the planned projects, so that a number of individuals or and poverty institutions may buy them and thus join together to finance the planned alleviation projects. Separate cash waqf will be raised for each individual waqf activity. This will have a resource-pooling effect to implement a large waqf-based project, which would otherwise be impossible by a single effort. The planned 143 projects will then be financed from waqf proceeds. The initiative of such waqf originates from the WAB (Department or Ministry of Waqf) in an organized manner. Thus it has the characteristics of being an organized activity. On the other hand, the waqf certificates are bought voluntarily by individuals or institutions and thus the cash waqf is made by them purely voluntarily. This makes the activity a voluntary one. It is thus an ``organized voluntary waqf'' entity. The mechanism of this waqf financing of poverty-alleviation projects is presented in Figure 2. In Figure 2, the central box contains the poverty-alleviation projects of high priority. The WAB in the top box prepares profiles of these projects, issues waqf certificates of different denominations, and puts in the market for sale in the left and right boxes. The individuals and institutions in the bottom box buy them. The waqf proceeds are then used to establish the target projects in the central box. In this way, important and large poverty-alleviation projects may be financed by raising cash waqf in a planned way. Such projects may include income/employment-generating projects, medical facilities and infrastructure. As indicated earlier, such projects are important for poverty alleviation in a sustainable way. Let us elaborate a bit on some of these projects. . Employment/income-generating projects. The poor countries experience high rates of unemployment of their labor force. Area-specific microprojects such as cottage and handicraft industries may generate both employment and income for the target groups of people in the target areas. . Educational facilities. Educational facilities can provide the badly needed education to the vast majority of illiterate population of a poor country[15], which is expected to contribute to poverty alleviation, and social, moral and human resource development.

Figure 2. Financing of poverty-alleviation projects by waqf certificates

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Medical facilities. There is a crying need for medical facilities in a resource-poor country[16]. Unavailability of medical services for the vast majority of the population results in poor health, low productivity, low income, poverty, and so on. The facilities provided by the public sector are concentrated in the urban and sub-urban areas, and are also negligible. The vast majority of the population lives in the rural areas, which are deprived of proper medical facilities. Physical infrastructure and utilities. Poverty alleviation and economic development require necessary physical facilities and basic utilities. Access roads, irrigation dams, flood control devices, and utilities are essential for implementing any poverty alleviation and development plan in many developing and low-income countries such as Bangladesh.

These are high-priority poverty-alleviation and development needs of a typical poor country. It is neither possible for the public sector to provide these goods and services adequately, nor viable for the private sector to deliver them. The institution of waqf may be appropriately applied to finance such projects. For example, a hospital may be established by raising ``organized voluntary'' cash waqf. One might however, note here that, in some cases, the establishment of the target projects will not suffice, but rather they will need continuous flow of income to bear operational expenses. We may call the target projects the primary projects. Their financing will need secondary projects to generate a regular flow of income. For instance, a hospital is a primary project. In order to finance the expenses of the hospital, some secondary projects such as shopping complexes may be constructed by raising organized voluntary cash waqf. The revenue generated from the secondary projects may then be used to finance the operation of the primary projects. With the secondary projects, Figure 2 will take the shape of Figure 3. In Figure 3, the WAB in the top box prepares both the primary projects (the upper central box) for poverty alleviation and socio-economic development, and also the secondary projects (the lower central box) to support the primary projects. The waqf proceeds are used to create both primary and secondary projects, while the revenue of the secondary projects finance the regular operational expenses of the primary projects.

Figure 3. Financing of poverty alleviation projects by the secondary waqf projects

Thus, in the new approach to poverty alleviation, the institution of waqf can be Perpetual charity made an important instrument to alleviate poverty in a sustainable way. It will and poverty increase capabilities of the poor to upgrade their economic conditions, rather alleviation than depending on short-lived re-distributive charities. Waqf, general welfare and the interactive process This section elaborates how waqf may be an instrument of common welfare, and how waqf fits in the interactive process of the multidimensional institutionalism in poverty alleviation under the ethico-economic system of Islam. Waqf, poverty and general social welfare in perpetuity The institution of waqf can be used as a tool of general social wellbeing, income generation for the worse-off strata of population and productive distribution of property. Although waqf is an institutional instrument of perpetual charity in the Islamic ethical system, its benefits are not usually specific to those who subscribe to this belief system. The beneficiaries are usually common, and even the sources of waqf may be made general, too, irrespective of one's religious belief. In Figure 1, there is no barrier to entry of any potential endowers through waqf certificates, irrespective of one's background, into the fold of this perpetual charity. Likewise, in Figure 1, the primary waqf projects may well be in the nature of public goods with characteristics of non-exclusion and nonrivalry, which lets everybody qualify to benefit from the waqf property, for instance, a flood control dam, an infrastructural project like a road, and so on. Those goods or services that are not purely public goods, like an education institution, are also common, and not specific to any community. In Figure 2, the secondary waqf projects are generally commercial enterprises whose clienteles are no doubt common and general and, besides, they are meant to finance the primary projects, which could well be of common beneficiaries as mentioned above. Thus, both the endowers in the perpetual charity of waqf and the beneficiaries may well be general, which may greatly contribute to common social wellbeing through the institutionalized form of perpetual charity. Waqf may be used as a source of income generation by the poor for the poor. In Figure 1, the primary projects may be of the kind of income generation for the poor by the poor. The proceeds of waqf certificates may be utilized to establish income-generating projects which are suitable to be operated by handicapped people, single mothers, illiterate and unskilled workers, and so on, such as handicraft producing enterprises. Simple training will equip them with the minimal required skills to work in such handicraft establishments. They will earn their living from these waqf-financed projects. This will be an incomegenerating source for them. The profits generated by these properties may have far-reaching distributive implications. The profits from these projects may partially be distributed among the working poor themselves. And, the remaining part may be used to

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finance other similar income-generating projects for the poor, and also as a source of regular transfer income for the incapable handicapped people and for the poor students to finance their educational expenses. In this way waqf proceeds may be used to finance income-generating projects for the poor by the poor. The waqf projects, financed by endowment contributions from the rich, may thus be an instrument of upgrading economic conditions of the poor with obvious implications for the productive distribution as well as transfer-type redistribution in perpetuity. Waqf: an integrated instrument in the multidimensional framework for poverty alleviation With this about the poverty-alleviation potential of waqf in perpetuity, let us see how it fits in the interactive multidimensional institutionalism of the ethicoeconomic system of Islam (ESI) aimed not only at alleviation, but also eradication, of poverty from the society. Poverty is disliked[17] and hence it provides a multi-edge framework for its eradication, which may be summarized briefly as follows: . Edge 1. The ESI requires modesty in consumption (leading to high rates of savings), provides a framework conducive for full potential investment, and full and optimal employment and utilization of all available resources[18]. Such an edge should generate high national, as well as individual, income with obvious implications for poverty alleviation. . Edge 2. The institution of zakah and sadaqah[19] redistributes income and wealth from the better-off strata of population to the worse-off ones. This has a balancing effect on the societal distribution of income and wealth with a far-reaching impact to generate a phenomenon that is desirable. . Edge 3. The ESI prohibits all corrupt practices that lead to income concentration and skewed distribution of wealth[20], dividing the population into two classes: the poor and the rich. Such corruption also creates an obstacle to the smooth functioning of the economy and significantly affects economic growth and development. Elimination of such practices is a high priority agenda of the ESI, which is expected to result in higher income generation, fair and equitable distribution, and thus poverty alleviation. . Edge 4. The factor and resource endowments are treated as divine bounties for mankind[21], and not for some particular segments of the society and, therefore, the ESI requires unimpaired access to resources for all. The socio-political system of the ESI is required to guarantee easy access to education, natural resources, and other facilities for all in the society. This will have a two-fold effect: weakening the resourceconcentration edge of the privileged societal elite; and strengthening the income-generating power of the poor.

Edge 5. The concept of ``ta'awun''[22] (cooperation) in the ESI requires Perpetual charity the people to build a ``caring and sharing'' society. In business, this will and poverty require the big and existing enterprises to pull up the small and new alleviation entrants in the business and industrial enterprises, instead of playing undesirable tricks to force the small and new ones out. This will have a favorable effect in facilitating economic activities of the underprivileged 147 in the society.

The institution of waqf fits well in edge 1 (income generation for the poor), edge 2 (sadaqah), edge 4 (access to resources and facilities) and edge 5 (ta'awun). This may be presented in Figure 4. Figure 4 shows how waqf is integrated in the interactive multidimensional institutionalism of the ESI for poverty alleviation. Waqf is created with the spirit of sadaqah and charity (edge 2) and cooperation in the societal neighborhood (edge 5), which will provide access to the resources and facilities for empowering the poor (edge 4), and will facilitate income generation by the rich for the poor, and also income generation by the poor for the poor (edge 1), and all these will re-enforce each other to alleviate poverty. It is interesting to note that, in this interactive process, zakah and sadaqah have a two-way interaction with poverty alleviation such that the former alleviates poverty, leading eventually to a level of income that will, in turn, generate zakah and sadaqah, and hence the two-way arrows. Summary and concluding remarks The major points of the paper may be presented in the form of the following summary and concluding remarks. Poverty is a universal problem, so much so that a great majority of the world population suffers from poverty. Poverty should be considered in a comprehensive manner. Besides income variables, it involves factors like education, health, shelter, and access to resources and physical facilities. Such an approach has also been taken recently by international organizations that

Figure 4. Waqf in the interactive model

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deal with poverty. In this approach, poverty alleviation would involve, among other things, provision of education, health and other physical facilities. There are many ways to address the issue of poverty. A potential way to alleviate poverty is charity, which can be made an effective means to overcome the poverty problem. Charity can be of many forms, but a long-lasting form of charity is waqf, which has the characteristic of perpetuity. The institution of waqf has played its role in poverty alleviation and socioeconomic development throughout history, especially in Islamic history. It is still playing an important role in Muslim countries and societies. There is a potential to make it more effective to alleviate poverty in an organized way. A developing country experiences large claims on public sector resources for poverty alleviation and socio-economic development by providing basic facilities to the people, including education and medical and infrastructure facilities, which the public sector is unable to provide adequately. These services and facilities cannot also be delivered commercially by the private sector for obvious reasons. According to the author, the institution of waqf can do a useful and good job in this scenario. The paper suggests a planned role of waqf for poverty alleviation and socioeconomic development by providing: . educational facilities (technical, vocational, mass level literacy, and other high-priority education); . medical facilities, especially in the rural areas; and . physical and infrastructure facilities and utilities. Although waqf is an institutionalized form of charity in perpetuity in the Islamic ethical system, its beneficial effects may well be common to all irrespective of one's belief system, which may be characterized by noninclusion and non-rivalry. It can be used to generate continuous and regular income for the poor by the poor. It is also a source of productive distribution of wealth and transfer-type redistribution. The provision of such facilities from waqf will require organized waqf in a planned way, since the existing voluntary waqfs, which come in a random and scattered manner, will not be able to do the job. The suggested waqf has been called ``organized voluntary waqf''. It is organized since the waqf administration will plan and organize it; and it is voluntary since the desired funds will be raised by inviting voluntary waqf contributions by issuing waqf certificates. In making waqf more effective, the waqf administration will plan both primary (target) and secondary projects. Primary projects are those which are themselves the targets of the projects, for example, a flood control dam. The waqf administration will finance such primary projects by raising cash waqf with the help of issuance of waqf certificates of different denominations. The secondary projects are those which are not the primary targets of the waqf, but rather they will generate cash flows to finance the regular operational expenses of the target projects, for example, developing a shopping complex (a

secondary project) to generate income to finance an educational institution (a Perpetual charity primary project). Such secondary projects may be created by the waqf and poverty proceeds. alleviation This will need a proactive waqf administration with capable and committed personalities in its leadership. With this, the institution of waqf can potentially play an important role in the poverty-alleviation and socio-economic 149 development of a society.
Notes 1. For an analysis of zakah in the context of poverty alleviation, see Sadeq (1996, 1989). 2. A nisab is a specified annual surplus, over and above all actual expenses, which makes zakah (a specified poor due) obligatory. 3. For a comprehensive analysis of the Islamic concept of poverty and its alleviation, see Sadeq (1997). 4. In principle, though, the purposes of waqf may include one's own use of waqf property or its use by one's offspring along with charitable causes. 5. The pilgrims as well as others used this road (Boudjellal, 1998, p. 4). 6. For example, Algarth Muslim University of India is based on waqf. 7. For example, Salimullah Muslim Yatimkhana (Salimullah Muslim Orphanage) of Dhaka, which takes care of thousands of orphans, is based on a waqf property. 8. Almost all Mosques of the Muslim world are based on waqf, including Baitul Mukarram national mosque in Dhaka. 9. For holy shrines in Jordan, see Al Shoumil (1998). 10. For example, the Office of the Administrator of waqf in Bangladesh. For waqf administration in Jordan and Kuwait, see Al Shoumil (1998) and Al Fadhil (1998), respectively. 11. For example, the Ministry of Awqaf in Jordan, see Al Shoumil (1998). 12. Waqf by use are those which do not have formal deeds of waqf, but the owners of the estates or properties have given them away for some religious or charitable purposes, and hence they are known to be of waqf properties. For a detailed list of waqf estates, see Government of Bangladesh (1998). 13. For example, real estate represents most of the waqf properties in Egypt, Syria, Palestine and Turkey (Roded, pp. 51-6). 14. Some authors have suggested ways to make existing voluntary waqf entities more effective (see, for example, Kahf (1998a, b), Kuwait Awqaf Public Foundation (1998) and Meraji (1998)). To the present author, this is not enough, but rather there is a need to have deliberate and organized waqf promotion. 15. For example, in Bangladesh, the official literacy rate is 32 percent (1991) which means that 68 percent of the people are illiterate (see Government of Bangladesh, 1998, p. 341). 16. We may take an example of Bangladesh. According to the official statistics, the number of persons per physician is about 5,000 in Bangladesh. Obviously most medical facilities are concentrated in the urban areas and the vast majority of the 120 million people of the country are based in rural areas (see Government of Bangladesh, 1998, p. 345). 17. The Prophet of Islam sought refuge for himself from poverty, which is a binding lesson for Muslims to follow in their life, too. Abu Hurairah reported that Allah's Messenger used to pray: ``Allah, I seek thy refuge against poverty; and I seek thy refuge from paucity and

International Journal of Social Economics 29,1/2 150

humiliation; and I seek Thy refuge that I do no wrong or wrong is done to me'' (Khan, 1989, p. 216). 18. For more in this, interested readers may refer to Sadeq (1987). 19. Sadaqah is charity by the rich for the poor. For a discussion on zakah and charity, see Sadeq (1980). 20. For a discussion on this, please refer to Sadeq (1980). 21. Al-Qur'an 2:29, 7:10, 45:12, 57:25. 22. Al-Qur'an 5:2. References Al Fadhil, D. (1998), ``Case study of waqf: Kuwait'', paper presented at the International Conference on Awqaf and Economic Development, Kuala Lumpur, 2-4 March. Al Shoumil, M. (1998), ``Case study of waqf: Jordan'', paper presented at the International Conference on Awqaf and Economic Development, Kuala Lumpur, 2-4 March. Ariffin, J. (1994), Poverty Amidst Plenty, Pelnduk Publications, Kuala Lumpur. Ashe et al. (1989), Credit for the Poor, United Nations, New York, NY. Boudjellal, M. (1998), ``Revival of the sunnah of waqf in Muslim countries and communities: justifications and conditions of success'', paper presented at the International Conference on Awqaf and Economic Development, Kuala Lumpur, 2-4 March. Cizakca, M. (1998), ``Awqaf: in history and implications for modern Islamic economics'', paper presented at the International Conference on Awqaf and Economic Development, Kuala Lumpur, 2-4 March. Foundation for Development Cooperation (1995), Best Practice of Banking with the Poor, Foundation for Development Cooperation, Brisbane. Getubig, I.P., Johari, M.Y. and Kuga, T. (Eds), (1993), Overcoming Poverty Through Credit, APDC, Kuala Lumpur. Government of Bangladesh (1998), Statistical Pocketbook Bangladesh 1997, Bangladesh Bureau of Statistics, Dhaka. Government of Malaysia (1992), Rural Poverty and Ways and Means to Alleviate It, Afro-Asian Rural Reconstruction Organisation, Kuala Lumpur. ILO (1986), Fighting Poverty, ILO, New Delhi. ILO (1997), Alleviating Poverty in Asia, SAAT, ILO, New Delhi. Islam, M.A. (n.d.), ``Waqf Mosjid, Mondir O Majar Bebosthapona Proshongey'' (On the management of waqf mosques, temples, and majars) (mimeo), Office of the Administrator of Waqfs, Dhaka. (The author is the Administrator of Waqfs in Bangladesh.) Kahf, M. (1998a), ``Financing development of Awqaf properties'', paper presented at the International Conference on Awqaf and Economic Development, Kuala Lumpur, 2-4 March. Kahf, M. (1998b), ``Contemporary issues in the management of investment Awqaf in Muslim countries and communities'', paper presented at the International Conference on Awqaf and Economic Development, Kuala Lumpur, 2-4 March. Khan, M.A. (1989), Economic Teachings of the Prophet, International Institute of Islamic Economics, Islamabad. Khan, M.A. (1994), Rural Development Through Islamic Banks, The Islamic Foundation, Leicester.

Kuwait Awqaf Public Foundation (1998), ``A strategic vision to promote the waqf development role'', paper presented at the International Conference on Awqaf and Economic Development, Kuala Lumpur, 2-4 March. Laum, B. (1914), Die Stiftungen in der griechischen und romischen Antike, quoted in Cizakca (1998). Mandaville, J.E. (1979), ``Usurious piety: the cash Waqf controversy in the Ottoman Empire'', IJMES, Vol. 10 No. 3, pp. 289-308. Meraji, M.E. (1998), ``Case study of Waqf: Iran'', paper presented at the International Conference on Awqaf and Economic Development, Kuala Lumpur, 2-4 March. Othman, M.Z.B.H. (1982), ``Islamic law with special reference to the institution of waqf'', Prime Minister's Department, Kuala Lumpur. Oxfam (1995), The Oxfam Poverty Report, Oxfam, London. Rockwell, J.C. (1909), Private Baustiftungen fur die Stadtgemeinde auf Inschriften der Kaiserzeit im Westen des romischen Reiches, quoted in Cizakca (1998). Roded, R. (n.d.), ``Quantitative analysis of waqf endowment deeds'', The Journal of Ottoman Studies, Vol. 1, pp. 51-6. Sadeq, A.M. (1980), ``Distribution of wealth in Islam'', in Hossain, K.T. et al. (Eds), Islamic Economics Research Bureau, Dhaka, pp. 44-91. Sadeq, A.M. (1987), ``Economic development in Islam'', Journal of Islamic Economics, No. 1 Vol. 1, August-September. Sadeq, A.M. (1989), ``Distribution of wealth through transfer payments'', Hamdard Islamicus, Vol. XII No. 1, pp. 33-45. Sadeq, A.M. (1996), ``Ethico economic institution of Zakah: an instrument of self reliance and sustainable grassroots development'', Humanomics, Vol. 12 No. 2, pp. 47-69. Sadeq, A.M. (1997), ``Poverty eradication: an Islamic perspective'', Humanomics, Vol. 13 Nos 3 and 4, pp. 110-34. UNDP (1991), Poverty Alleviation in Asia and the Pacific, UNDP, Kuala Lumpur. UNDP (1997), Human Development Report 1997, Oxford University Press, New York, NY. UNDP (1998a), Overcoming Human Poverty, UNDP, New York, NY. UNDP (1998b), Human Development Report, Oxford University Press, New York, NY. United Nations (1996), Rural Poverty Alleviation and Sustainable Development in Asia and the Pacific, United Nations, New York, NY. World Bank (1990), World Development Report, Oxford University Press, New York, NY.

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