Waqf Development in Indonesia

Indonesia is a maritime country consisting of thousands of islands. The cluster of islands stretches from Sabang to Merauke. As the third most populous country in the world, Indonesia’s position is very important. Indonesia’s vision in 2045 is to become ‘Golden Indonesia’. Golden Indonesia gold means no poverty, low economic disparity, and full employment level.
The population of Indonesia in 2019 will reach 267 million, of which 87% are Muslims. This puts Indonesia as one of the countries with the largest number of Muslims in the world. The population is divided into more than 300 ethnic or ethnic groups in Indonesia, or precisely 1,340 ethnic groups (according to the 2010 census), with the largest dominance being the Javanese. While viewed from its geographical characteristics, Indonesia is an archipelagic country consisting of more than 13,000 islands with a total area of Indonesia of 7.81 million km2 consisting of 2.01 million km2 of land, and 3.25 million km2 of ocean.
Because of its uniqueness, the practice of waqf and waqf institutions that develop in Indonesia is also unique. There may be some things that are not found in other countries. Regardless of its current condition, the Indonesian Waqf Board (BWI) considers that the role of waqf in sustaining the history of the Indonesian economy is very high especially in the social world such as education and other worship activities. In the future, through the development of endowments, institutional and literacy products, the role of waqf is expected to be one of the pillars of the nation’s economy towards the Golden Indonesia.

A. CONDITIONS FOR WAQF IN INDONESIA TODAY

Waqf is charity from individuals whose principal assets cannot be exhausted, unlike zakat which must be consumed immediately, even though both have social goals. The practice of waqf in Indonesia starts from customary law which is not written, but still based on Islamic teachings. In the Dutch colonial period there was a waqf law in the form of Circular of the Government Secretary. Entering the time of President Soekarno, the Ministry of Religion of the Republic of Indonesia on December 22, 1953, issued instructions on waqf which later became the authority of Part D (social worship), Religious Affairs Office. Then the regulation continues to grow, not only related to administration and institutions, the types and objects that have developed, the original waqf assets are only in the form of land, now waqf assets can be in the form of movable objects, money, shares, and so on. Based on its duration, it is known as eternal and temporary endowments. The final waqf law is Law Number 41 of 2004 concerning Waqf and Government Regulation Number 42 of 2006 promulgated on 15 December 2006 and the Fatwa of the Indonesian Ulema Council (MUI) concerning cash waqf.

In addition to the above, endowments also began to develop into social waqf and productive waqf. The social waqf means that the benefits of the waqf assets developed are used for social purposes. Meanwhile, in productive waqf, waqf assets developed are productive assets to produce goods or services, where the profits from these activities are then handed over to beneficieries or mauquf alaih. For the management of productive waqf and cash waqf in Indonesia, there is a framework issued by the Indonesian Waqf Board (productive waqf and cash waqf) and a Financial Service Authority (specifically cash waqf) as stated in Figure 1.

Looking at a very strategic role, several countries with a majority Muslim population such as Turkey, Egypt, Saudi, Jordan and a number of other countries carry out the functions and roles of Nazir through state institutions at the level of the Minister or a national main nazir body. At present, the Indonesian Waqf Board (BWI) still plays a role as a regulator institution for existing Nazirs. Even though in the future, BWI can also play a role as Nazir as stated in article 49 point 1b, Law No. 14 of 2014.

At present, BWI records no less than 4 billion m2 of waqf land in Indonesia. The land is divided into more than 430 thousand land parcels and only about 60% have been issued certificates. As for the waqf land which has not been certified as waqf, it is endeavored to be certified gradually. For this reason, cooperation with the State Land Agency (BPN) is needed to accelerate it. Through several direct meetings with the head of the BPN, the BPN is ready to do so.

A.1. Waqf Asset

Even though it has a large total area, if it is seen per area of land, the utilization is limited. This condition is very contrasting when compared to the area of oil palm plantation concessions owned by large private plantations in Indonesia which reach more than 7 billion m2 in the form of overlays. However, the number of waqf assets is 10% in strategic locations in urban areas, meaning that if there is sufficient investment, it is not impossible that the waqf land can be developed into productive assets in the form of property. Currently the utilization of waqf assets is around 74% used for mosques, 5% for graves and 13% for educational facilities. For more details, see Table 1.

Unfortunately, the investment needed to develop waqf assets to be used as productive assets is still very little, as of March 2018 BWI recorded only Rp 199 billion of waqf assets in the form of cash collected by the Nazirs. Mobilization of cash waqf is still constrained by aspects of public literacy and limited waqf instruments, not to mention the optimal level of capacity and competence of Nazhir.

There are 201 Nazir cash waqf institutions that have been granted permission by BWI. The majority of these cash waqf institutions are Islamic cooperatives or Baitul Maal wat-Tamwil (BMT). The purpose of the cash waqf is to help the Baitul Maal side of the cooperatives and BMTs. The money collected through cash waqf will be invested, and the results will be used for the Baitul Maal social programs. Nazhir other than sharia cooperatives or BMTs generally come from zakat institutions that develop their organizations, with program patterns that are social in nature. Until now, Nazhir who truly has a background in productive asset management is also still limited. Data on Nazir waqf money is found in Table 2.

Meanwhile, Islamic Financial Institutions-managing cash waqf (LKS-PWU) have already had 19 institutions, as of December 2018. These LKS-PWUs have been created to mobilize cash waqf. This LKS-PWU consists of Islamic banks, both commercial banks and regional banks. With hope, the customers of the Islamic bank can easily pay the waqf at the bank where they save. The names of Islamic banks managing cash waqf can be seen in table 3.

Table 1. Waqf Land Asset in Indonesia
No. Province Total Certified Not Certified Total Area (M2)

1 Nanggroe Aceh Darussalam 11.895 5.845 6.050 8.025.300
2 Sumatera Utara 10.854 6.256 4.598 8.222.970
3 Sumatera Barat 4.821 3.349 1.472 585.740
4 Sumatera Selatan 3.585 1.767 1.818 405.910
5 Riau 7.861 2.753 5.108 2.050.290
6 Jambi 5.975 3.173 2.802 947.700
7 Bengkulu 2.180 1.611 569 431.140
8 Lampung 11.045 6.755 4.289 5.438.870
9 Bangka Belitung 1.086 746 340 200.890
10 Kepulauan Riau 1.317 371 946 218.140
11 DKI Jakarta 6.372 3.965 2.407 265.070
12 D.I Yogyakarta 9.675 8.723 952 342.370
13 Jawa Barat 67.556 38.331 29.225 4.637.660
14 Jawa Tengah 88.707 67.398 21.309 4.484.460
15 Jawa Timur 57.231 32.378 24.853 3.805.740
16 Banten 14.247 8.186 6.061 991.530
17 Bali 1.427 1.287 140 208.850
18 Kalimantan Barat 2.573 1.501 1.072 510.140
19 Kalimantan Tengah 2.884 1.623 1.261 643.270
20 Kalimantan Selatan 7.784 6.992 792 910.180
21 Kalimantan Timur 2.476 1.238 1.238 651.010
22 Kalimantan Utara 314 128 186 124.420
23 Sulawesi Utara 770 344 426 102.300
24 Sulawesi Tenggara 1.091 827 264 108.440
25 Sulawesi Tengah 2.126 1.345 781 890.330
26 Sulawesi Selatan 7.057 4.432 2.625 897.980
27 Sulawesi Barat 2.787 849 1.938 485.990
28 Papua 287 139 148 59.760
29 Papua Barat 44 29 15 18.120
30 Nusa Tenggara Timur 1.282 963 319 332.340
31 Nusa Tenggara Barat 8.345 5.443 2.902 1.294.250
32 Maluku 388 168 220 53.340
33 Maluku Utara 300 212 88 46.180
33 Gorontalo 1.837 922 915 383.450Total 348.179 220.049 128.129 48.774.140

Source: Directorate of Waqf Empowerment, Ministry of Religion – July 2018

Table 2. Nazir Cash Waqf in Indonesia
No.
Name No. Name
1 Badan Wakaf Indonesia 52 Yayasan Yatim Mandiri Surabaya
2 Yayasan Badan Wakaf Sultan Agung 53 Yayasan Al Jannah Mandonga Konawe Selatan
3 PBNU 54 Yayasan Pos Keadilan Peduli Ummat (PKPU)
4 Yayasan Haji Sepanjang Hayat IPHI 55 Yayasan Griya Yatim dan dhu’afa Tangsel
5 Yayasan wakaf Pondok Indah 56 Yayasan Semai sinergi ummat (wakaf pro 99)
6 Baitul Maal Muamalat 57 Koperasi Syariah BMT Al Azhar Jakarta
7 Yayasan Badan Wakaf UMI 58 KJKS BMT Bersama Kita Berkah Jakarta
8 KJKS BMT An Najah Pekalongan 59 KBMT Darul Qur’an Jakarta Selatan
9 KJKS BMT Hudatama Semarang 60 KJKS Ibaadurrahman Ciawi Bogor
10 KJKS BMT Ummat Mandiri Tegal 61 KSPPS BMT Mustama Bandung Barat
11 KJKS BMT Al Ikhlas Yogyakarta 62 KSPS BMT Sanama Cileunyi Bandung
12 KJKS BMT Beringharjo Yogyakarta 63 KBMT Mitra Sadaya Bandung
13 KJKS Surya Abadi Lampung Tengah 64 KJKS BMT Barrah Bandung
14 Koperasi BMT Bina Ummah Yogyakarta 65 KBMT Ubasyada Ciputat
15 KJKS BMT Mitra Usaha Mulia Yogyakarta 66 KBMT Mekar Da’wah Serpong
16 Yayasan Darun Na’im Cirende Lebak 67 Yayasan Ummat Mandiri Sejahtera Jakarta
17 Yayasan Islam Qudwatul Ummah Lebak 68 Yayasan Global Wakaf/ACT
18 KJKS BMT Binamas Purworejo 69 Yayasan Cinta Wakaf Indonesia Kota Bekasi
19 KJKS BMT Marhamah Wonosobo 70 KJKS BMT Insan Amanah Lampung Selatan
20 Koperasi BMT Amal Mulia Semarang 71 KJKS BMT As’syafi’iyah Lampung Tengah
21 KJKS BMT Bahtera Pekalongan 72 KJKS BMT Al Hafiidz Kalianda
22 KJKS Tamzis Baituttamwil Wonosobo 73 KJKS BMT Mentari Kota Gajah
23 KSU Syariah BMT Agawe Makmur Yogyakarta 74 Koperasi BMT Ibaadurrahman Sukabumi
24 KSPS L Risma Lampung Timur 75 KJKS BMT Investa Mubarokah Cianjur
25 KJKS BMT Ummat Sejahtera Kebumen 76 Koperasi Syariah BMT Itqan Bandung
26 KJKS BMT Alfa Dinar Karanganyar 77 KJKS BMT Al Falah Cirebon
27 KJKS BMT Istiqlal Pekalongan 78 Koperasi BMT Al Amanah Sumedang
28 KJKS BMT Al Huda Wonosobo 79 KJKS BMT Mardlotillah Sumedang
29 KJKS BMT Teladan Surabaya 80 KJKS BMT Al Hasanah Lampung Timur
30 KJKS BMT Ben Sejahtera Cilacap 81 KJKS BMT Al Ihsan Metro Lampung
31 KJKS BMT Melati Wonosobo 82 KJKS BMT Duta Jaya Lampung Timur
32 KJKS BMT Bina Insani Semarang 83 Yayasan Wakaf Al-qur’an Indonesia
33 Yayasan Pesantren Islam Al Azhar Jakarta 84 KSU BMT Al Ikhwan Yogyakarta
34 KJKS Sari Anas Surabaya 85 BMT Al-quddus Temanggung
35 KJKS Bersih dan Amanah Surabaya 86 BMT Al-Amin Kebumen
36 KJKS Manfaat Surabaya 87 KSU BMT Yaqawiyyu Klaten
37 KJKS Sri Sejahtera Surabaya 88 KJKS BMT Bima Muntilan
38 KJKS Binama Semarang 89 KJKS BMT Amanah Ummah Sukoharjo
39 KJKS BMT Mandiri Sejahtera Semarang 90 KJKS BMT Karisma Magelang
40 KSU BMT Surya Utama Cilacap 91 KJKS BMT Mitra Mandiri Wonogiri
41 Koperasi BMT Al Hikmah Semarang 92 BMT Bismillah Kendal
42 KJKS BMT Al Fataya Payakumbuh 93 KJKS BMT Artha Barokah Bantul
43 KJKS Inti Muamalat Semarang 94 KJKS BMT Artha Amanah Bantul
44 KSPS BMT Mega Bintang Sejahtera Bojonegoro 95 KJKS BMT Muamalat Karang Anyar
45 KSU BMT Harapan Ummat Sidoarjo 96 KJKS BMT Tumang Boyolali
46 KJKS BMT Nurussa’adah Pekalongan 97 KSU BMT Dana Insani Gunungkidul
47 KSU BMT Safinah Klaten 98 KSU BMT Mubaarak Gunungkidul
48 KJKS Wanita Khadijah Surabaya 99 Yayasan Mesjid Al Falah Surabaya
49 Yayasan Rumah Wakaf Indonesia Bandung 100 Yayasan dompet dhuafa republika
50 Yayasan Bina Nurul Fikri Jakarta 101 Yayasan darut tauhid bandung
51 Yayasan Wakaf Bangun Nurani Bangsa (ESQ) 102 Yayasan kesejahteraan Madani Jakarta
Table 2. Nazir Cash Waqf in Indonesia
No.
Name No. Name
103 KSP Syariah BMT Bee Mass Ngawi 153 BMT Sakinah Sukoharjo
104 KSU Syariah BMT Tawakkal Pacitan 154 KSPPS Al Mu’awwanah Semarang
105 Koperasi syariah BTM Mentari Tulung agung 155 KSPPS Indoartha Syariah Temanggung
106 KJKS BMT Muamalah Mandiri Pacitan 156 KSPPS Dirgantara Mitra Sejahtera Surakarta
107 KJKS BMT Surya Madani Boyolali 157 KSPPS Mitra Anda Sejahtera Semarang
108 Koppontren Walisongo Semarang 158 Koperasi BMT Fosilatama Semarang
109 KJKS BMT Bondho Tumoto Semarang 159 KJKS BMT Atunnisa Boyolali
110 KJKS BMT Fastabiq Pati 160 KSU BMT Al Falah Klaten
111 KBMT Assalam Cianjur 161 KJKS BMT Dana Mulia Boyolali
112 KJKS BMT El Mitra Madani Cianjur 162 KSPPS El Gama Artha Mandiri Semarang
113 KJKS BMT AlAmanah 225 Tukdana Indramayu 163 KJKS Mitra Dana Syariah Temanggung
114 KSU Syariah Gemi Yogyakarta 164 KJKS BMT Husnul Faizah Temanggung
115 Koperasi Syariah BTM An Nuur Tulungagung 165 KSPPS BMT Mandiri Sejahtera Gresik
116 KSU BMT IPMH Halaqoh Ngawi 166 KSPPS BMT NU Jawa Timur Sumenep
117 KJKS BMT Amanah Ummah Surabaya 167 KSPPS BMT Permata Jawa Timur Mojokerto
118 KJKS BMT Alang Laweh Kota Padang 168 Kopontren Al Yasini Pasuruan
119 KJKS BMT Seberang Padang Kota Padang 169 Yayasan Dompet Amanah Ummat Sedati
120 Koperasi BMT Islamic Centre Cirebon 170 Yayasan Pembina Mesjid Salman ITB
121 KSU Dana Mentari Purwokerto 171 DMI Yogyakarta
122 KSU BMT Mardlatillah Purbalingga 172 Yayasan Inisiatif Wakaf Depok
123 KSU BMT An-Nur Cilacap 173 PP. Gerakan Pemuda Anshor
124 KSU BMT Al Mujahidin Cilacap 174 Yayasan Dewan Dakwah Islamiyah Indonesia
125 KSU BMT Pemuda Amanah Banyumas 175 Yayasan Baitul Maal Hidayatullah
126 Perhimpunan BMT Indonesia 176 Koperasi BMT Al-Izzah Mojokerto
127 Koperasi At-Ta’awun Kota Metro 177 KSPPS BMT Artha Insani Lamongan
128 Koperasi BMT Binaul Ummah Kota Bogor 178 KSPPS Mawar PP. Matholiul Anwar Lamongan
129 BMT Madani Ciamis 179 Koperasi Syariah Nuri Madura
130 Kopontren BMT Miftahussalam Ciamis 180 KSPPS Madani Trenggalek
131 Yayasan Al-Kaf Sidogiri 181 KSPPS BMT Amanah Madiun
132 Yayasan Baitur Rahmah Sejahtera Sidoarjo 182 Koperasi Syariah Podo Joyo Blitar
133 Yayasan Mandiri Amal Insani 183 KSPPS Mitra Usaha Ideal Gresik
134 Yayasan Darussalam Kota wisata 184 KSPPS Gumarang Akbar Syariah Mataram
135 Yayasan BM Ziswa Amanah Sejahtera Riau 185 Yayasan Tunas Cendekia Mandiri Bekasi
136 Yayasan Investa Cebdekia Amanah Jaksel 186 Yayasan Nurul Hayat Surabaya
137 Yayasan Wakaf Bani Umar Tangsel 187 KSU Syariah Huwaiza Depok
138 Yayasan Azmuna Cipayung Jaktim 188 Yayasan Tazakka Batang
139 KSPPS BMT Bina Ummat Sejahtera Rembang 189 Yayasan Pendidikan PP Al Hikmah 2 Brebes
140 Koperasi BMT Muda Jatim Surabaya 190 KSPPS Benteng Mikro Indonesia
141 KSPPS BMT Nurul Ummah Ngasem 191 Yayasan Baituzzakah Pertamina
142 KSPPS BMT Ki Slamet Lamongan 192 Yayasan Darul Qur’an Nusantara
143 KSPPS BMT Bina Insan Mandiri Tuban 193 Lembaga Wakaf Majelis Ulama Indonesia
144 KSPPS Darumafatihil Ulum Pasuruan 194 Yayasan Bangun Kecerdasan bangsa
145 Kanindo Syariah Jawa Timur Malang 195 KSP BMT Al Muhajirin Banggai Sulteng
146 KSPPS Dana Limardlatillah Semarang 196 KSU BMT Mandiri Syariah NTB
147 KSPS BMT Harapan Ummat Kudus 197 Koptan Syariah Bina Usaha NTB
148 KSPS BMT Al Mizan 198 Yayasan BAMUIS BNI
149 KSPS BMT Ar-Rahmah Mojokerto 199 Universitas Airlangga
150 Koperasi Syariah Harapan Surabaya 200 Perkumpulan Syarikat Islam
151 KSPPS Syirkah Fastabiqul Khoirot Lumajang 201 Yayasan Bangun Sejahtera Mitra Ummat
152 KSU BMT Al Khalim Temanggung Jakarta Pusat
Source: Indonesia Waqf Board, 2019

Table 3. Islamic Financial Institution-managing cash waqf (LKS-PWU)
No Nama No Nama
1 Bank Muamalat Indonesia 11 BPD Kepri Riau syariah
2 Bank Syariah Mandiri 12 BPD Jatim Syariah
3 Bank BNI Syariah 13 BPD Sumut Syariah
4 Bank Mega Syariah 14 Bank CIMB Niaga Syariah
5 Bank DKI Syariah 15 Bank Panin Dubai Syariah
6 Bank BTN Syariah 16 BPD Sumsel & Babel Syariah
7 Bank BUKOPIN Syariah 17 Bank BRI Syariah
8 BPD Yogya Syariah 18 Bank BJB Syariah
9 BPD Kalbar Syariah 19 BPD Kaltim dan Kaltara Unit Usaha
10 BPD Jateng Syariah Syariah
Source: Directorate of Waqf Empowerment, Ministry of Religion, 2019

A.2. Variety of Waqf Products

In addition to traditional social asset waqf models such as religious facilities, graves, schools with the duration of asset surrender forever, BWI is currently promoting the development of productive waqf assets such as asset property, cash waqf investment, and stock waqf. Like wise with its duration, waqf instruments are also developed in temporary forms such as Sukuk. As it is known that in the IMF meeting in Denpasar, October 2018, BWI together with the Ministry of Finance and the Ministry of Religion have issued Cash Wakaf Linked Sukuk (CWLS) products, namely an investment-based waqf instrument that is temporary with a period of 5 years. Later, the sukuk issued by the government. The proceeds will be used to build social assets especially those located in areas exposed to disasters (such as post-earthquake in Lombok and Palu). The bond margin / coupon will be returned to Mauquf Alaih, which is in the form of developing other waqf assets. After 5 years, the principal will be returned to the waqif.

To increase the level of professional nazir, BWI together with Bank Indonesia and international partners have prepared a guideline for managing risk-based waqf assets, called the Waqf Core Principles (WCP). Hopefully this document can be one of the reference guidelines not only for national Nazirs, but also internationally in maintaining the value of the benefits of waqf assets on an ongoing basis. In addition, BWI together with the Indonesian Institute of Accountants is also preparing a waqf accounting standard, namely PSAK No. 112 to improve standards, transparency and accountability of waqf asset management by the Nazirs.

B. AWQAF INSTITUTIONS
The manager of waqf (Nazir) in Indonesia consists of individuals, organizations and legal entities. Most Nazirs in Indonesia have not worked optimally. Only 16 percent of Nazirs work full time, while most, 84 percent work part time. Of course this condition is not ideal. One of the successes of the organization is having employees who work full time. If only 16 percent work full time, it is natural that the management of the waqf is not optimal. Those who work part time are dominated by individual Nazirs. Nazir individuals here mean the Nazir who are given waqf assets by Waqif personally. For example, Waqif gives his waqf assets in the form of a plot of land to Ali. So Ali was called the individual Nazir. In the waqf law no. 41 of 2004, individual Nazir were recognized, because in fact, many of the waqf assets were given to individual Nazirs. In the past, people gave waqf to people he believed in, usually the local Islamic scholars. Some are managed successfully, some are not. Supervision of waqf assets that are nullified by individuals is also difficult, because generally they do not have good financial accounting. Often waqf assets are mixed with personal assets of individual nazir. Therefore, the Indonesian waqf board no longer issues permits to individual Nazirs.

Figure 2. Full Time and Part time Nazir

Of the total Nazir, the proportion of individual nazir is 66 percent, nazir in the form of an organization of 16 percent, and Nazir in the form of a legal entity with 8 percent. Nazir organization is an organization that is engaged in the field of social, educational, social, and / or religious Islam. Nazir in the form of a legal entity is an Indonesian legal entity formed in accordance with applicable laws and regulations and the relevant law operates in the field of social, educational, social and / or religious Islam.

Figure 3. Types of Nazir
At present, a waqf information system is being developed that is very useful for Nazir and BWI. In the future, guidance to Nazir will continue to be improved so that the Nazirs can manage their waqf land, and cash waqf. Waqf management is regulated and made standard, where later there will be certification for the Nazirs.

C. WAQF OPPORTUNITIES AND CHALLENGES IN INDONESIA

Opportunities for developing waqf in Indonesia are very large, especially cash waqf. This is driven by the large Muslim population, followed by demographic gains that put Indonesia in the top 10 of the world economy in the next 2030. Also the awareness of giving waqf from the middle and millennial classes is also getting bigger. If the opportunity is managed properly and with the assumption that there will be 215 million Indonesians who will be included in the middle class, then with a very conservative assumption, there will be potential cash waqf of Rp. 70-80 trillion per year. On the other hand, the greatness of the waqf instrument is its accumulative nature and this is different from other Islamic philantrophy schemes which tend to be consumed. The impact is that there will be a distribution of capital among the people.

However, in reality, waqf literacy is still very low. Nazir capacity that has reliable management in managing productive investments and assets is also still limited. On the other hand, regulatory and institutional aspects such as laws, reporting systems, supervision and guidance are also still sub-optimal. Waqf products are also still limited and are generally still colored by social waqf assets. Accessibility of payments is still limited. Therefore, the biggest challenge in the development of waqf lies in the efforts of the establishment of a qualified waqf system.

Figure 4. Income Pyramid, Indonesia, 2010 and 2020

Opportunities and Challenges of waqf in Indonesia from an economic, regulatory, technological, social, environmental and political perspective can be summarized as shown in Table 4.
Table 4. Opportunities and Challenges of waqf in Indonesia
No. Perspective Opportunities Challenges
1 Economy Very large, seen from the potential waqf of money which is Rp. 70-80 trillion per year. How to educate the public to be able to do cash waqf.
2 Regulation There is already a waqf law and also a government regulation. Amendments to this waqf law are still needed, given some urgent matters.
3 Technology Industry revolution 4.0, can develop waqf fintech There must be good regulation immediately about this fintech.
4 Social The community began to recognize waqf in various Islamic study forums and scientific forums. Indonesian people also have a high social sense. Advocate the community to give waqf.
5 Environment Communities that have a religious environment It takes effort to unite the ummah
6 politics There is already a national sharia finance committee (KNKS) tasked with developing Islamic economics and finance in Indonesia (including waqf), which is chaired directly by the president Political will is needed from the government to develop waqf in Indonesia.

D. DEVELOPMENT STRATEGIES

The strategy for developing waqf can be done through institutional and regulatory support, human resources, as well as research and development (R & D).

Table 5. The Strategy for Developing Waqf in Indonesia
No. Support Strategy for developing waqf
1 Institutional and regulatory Need to strengthen BWI’s role. Regulations that support the role of BWI need to be made.
2 Human Resource Train and empower Nazirs, so that the Nazirs can develop their waqf well. Strived for Nazir certification.
3 Research and development Research continues to be developed, in order to find patterns of development of waqf that are suitable for Indonesia.

It cannot be denied, the weak supervision of Nazir makes the management of waqf less than optimal. Nazir financial reports requested every year by BWI are very rare. Financial statements are usually given when Nazir’s permission will expire. Nazir permission is given every 5 years. With this condition, it is difficult for BWI to know how much money is collected from cash waqf. Strengthening BWI was needed as nazirs supervisor, whose function was to oversee the management of Nazir. If violations are committed, BWI must reprimand Nazir. If there are repeated violations, BWI can dismiss the Nazir and appoint a new Nazir.
Human resources (Nazir) need to improve their knowledge and abilities in managing waqf assets. For this reason, BWI has made several training programs, such as waqf digitalization training, waqf accounting training and others. In the future, Nazir certification bodies will be created. Those appointed as Nazir must have a Nazir certificate. This Nazir certification will be issued by the Indonesian Waqf Board (BWI).
No less important is the role of research. Research must continue to be carried out to look for forms of productive waqf management that are compatible with the culture of Indonesian society. Differences in fiqh views sometimes become obstacles in developing waqf. For this reason, it is necessary to research contemporary jurisprudence for waqf financial instruments, such as the fiqh of waqf shares, mutual fund endowments, and others.

The empowerment model developed from waqf instruments includes:

• Empowerment in the food sector by providing agricultural access.
  One of the works from this waqf is the food sector, through agricultural land waqf. An example is the waqf of rice fields carried out by the Islamic cooperative ‘Benteng Mikro Indonesia’. The management of this paddy field will be collaborated with the muzara’ah contract for the cooperative members, and the results of this waqf will be used for social activities. Social activities are aimed at helping cooperative members such as providing scholarships to members of children, mass circumcisions, renovating sanitation musholla and pesantren in the neighborhood where the members live, and so on.

– Empowerment in the health sector by establishing a waqf hospital.
The waqf hospital established by BWI in collaboration with ‘Dompet Dhuafa’ is the hospital of Achmad Wardi in the city of Serang, Banten province. Poor people are free of charge if they take eye care to this place. Some waqf hospitals that have been established by ‘Dompet Dhuafa’ are: RST hospitals (Integrated Healthy Houses) in West Java province, Sribhawono Hospital in Lampung Province, etc.
– Empowerment in the field of education by establishing schools and Islamic boarding schools from waqf.

Many schools or Islamic Boarding School (pesantren) are established from waqf funds. Almost all pesantren and madrassas are established from waqf funds. In fact, several universities were built from waqf land.

– Empowerment in the religious field by establishing a mosque / house memorizing the Qur’an (tahfidz house) from the waqf.
Many tahfidz houses have been established from waqf funds. Some Nazirs, such as educational foundations, and many social foundations, are taking part in this work.

E. WAQF DEVELOPMENT PLAN IN INDONESIA
To develop waqf in Indonesia, BWI uses 3 types of plans, namely short, medium and long term plans.
E.1. Short Term
In the short term, BWI focuses on efforts to follow up on several rules, principles and programs that have been launched. In addition, this short-term plan is also focused on finding solutions to the waqf issues currently being faced. The few short-term plans of BWI are as follows:

1. Socializing the Waqf Core Principles (WCP) to the Nazirites and related parties, which was launched on October 14, 2018.
2. Promote the Sukuk Linked Waqf Cash (CWLS) which was launched on October 14, 2018.
3. Compile Waqf Information System, together with Bank Indonesia, Productive Waqf forum, and other related parties.
4. Empowering the Nazir Association of Indonesia which has been formed May 9, 2018.
5. Arranging Nazhir’s competency standards, conducting Nazir training and certification, in order to protect waqf assets and increase waqf added value.
6. Form a Team for the Settlement of the Use of Waqf Asset Problems by the Government consisting of elements from the Ministry of Religion, BWI, Ministry of Finance, the Supreme Audit Agency and other related parties.
7. Increasing the synergy of BWI-Ministry of Religion related to the duties and functions of the authority and institutional status that has been regulated by legislation. A team together with the Ministry of Religion and Indonesian waqf bodies was formed to form joint regulations.
8. Develop a waqf digitization system with adequate technological tools, to adjust the development of Information Technology

E.2. Medium Term
The medium-term plan is focused on efforts to continue the things that have been planned in the short term and are focused on improving waqf laws and other regulations. In the next 3-5 years, BWI will focus on the strategy of developing national waqf into the following items:

1. Developing ecosystems and paradigm shifts, especially among Nazir waqf who were originally partial and tend to compete with each other, to work together in synergy especially in managing large-scale waqf projects (musabaqoh-muawwanah)
2. Increasing the number of waqif through literacy and awareness of giving waqf for millennial generations (especially through the introduction of waqf curricula in schools and universities)
3. Increasing the number and diversification of waqf assets, variety and improved product innovations and starting to enter into modern investment instruments such as stock waqf, sukuk waqf and so on
4. Strengthening financial capacity-building competencies to increase the value added of waqf assets (sense of business, entrepreneurship, risk management and value creation)
5. Improve the quality of governance-compliance with the principles of good governance principals and waqf core principles
6. Diversity of management of waqf assets with managed risks (waqf linked sukuk) and supporting Islamic economic growth
7. Utilizing digital technology (including asset digitalization) in terms of inventory and mobilization of waqf assets
8. Revise the waqf law and its derivative legal products so that the implementation of waqf is more actual and in line with the trend of market digitalization.
   Law no. 41 of 2004 concerning waqf is 15 years old. During that time, a lot of waqf developments needed to be accommodated into law. Therefore, it is necessary to amend this waqf law. The BWI’s mid-term plan is to amend the Waqf Law by proposing several material changes, including:
   a. Institutional strengthening of BWI centers and regions related to their authority that must be clarified and distinguished from the Ministry of Religion,
   b. Nazhir rights arrangement,
   c. BWI as the nation’s nazhir,
   d. The additional requirements to become Nazhir related to entrepreneurship competency capabilities, arrangement of achievement, tax exemption on waqf / management, regulation of things that have not been regulated refer to the shafi’i school / fatwa, and restrictions on the validity period of ‘waqf ahli’,
   e. Land waqf recognized as endowments is its value, government support for productive endowments and pilot projects,
   f. Recognition of waqf assets with commercial assets in a productive endowment.
   g. Following up on Government Regulation Number 25 Year 2018 concerning Amendment to Government Regulation Number 42 of 2006, the Ministry of Religion and BWI need to develop their SOPs / Technical Guidelines and socialize them.
   h. All government and private institutions that use the word ‘waqf’ must fulfill the elements of waqf.

E.3. Long Term

Long-term plans are focused on literacy efforts, public awareness and education of waqf. BWI’s long-term plans are:

1. Formulate literacy, outreach, waqf education programs (formulation of waqf curriculum for all levels of education, starting from elementary, junior high, high school and university) involving the Ministry of Religion, BWI, BI, OJK, LKS-PWU and other stakeholders, to develop awareness of giving waqf (waqf society).
2. Hold regular thematic mudzakarah between the Ministry of Religion and BWI to respond to the latest developments regarding waqf.
3. Realizing the generation of waqf-preneur towards waqf society. waqf-preneur is a new term for productive waqf activists who are mainly carried out by young entrepreneurs in Indonesia. There are 3 steps to advancing waqf namely literacy, creation and conversion. Ideally, all three stages are needed by the waqf-preneur to form an ecosystem. The literacy stage as an initial step is an effort to give awareness to the importance of waqf to the public. The waqf-preneur are challenged to create a variety of literacy programs that are friendly to the public (user friendly). The main literacy target is targeting the millenials or the younger generation. This number is extraordinary because Indonesia is experiencing a demographic bonus. In addition, the ideological understanding of this generation is still in the search process so it is very potential and strategic. The majority of this generation uses smartphones. Therefore, interesting applications are needed related to waqf or game waqf. The generation of millenials infected with the culture of FoMo (Fears of Missing out) needs to be accommodated by the offer of creative solutions for the waqf. It is necessary to start up a special business that has the potential to be developed into a large global company. The initial to end funding of the results of this company must be endowed with a waqf scheme as well. Results obtained from rounds of waqf funds will also be developed to raise waqf assets. Literacy or awareness and campaign movements as well as socialization of waqf-prenuer ideally include waqf literacy and endowment competency literacy. Already started to grow several higher education institutions that care about the study of science waqf. Going forward, waqf literacy is introduced from an early age and elementary and secondary schools. A few weeks ago the Indonesian Waqf Agency proposed to the Ministry of Religion of the Republic of Indonesia that waqf literacy not only at Islamic schools, but also at regular Friday sermons. The ideal prerequisites might be tested waqf (managers) endowments. waqf-prenuer will be able to be creative in creating attractive and profitable proposals so that the waqf domain can improve the welfare of the recipients of the waqf (‘mauquf’ alaih ‘) and the general public. The productive results of this waqf also elevate the dignity of those involved in waqf. Waqf-prenuer movement if done massively and structured will continue to grow like a snowball. If it has increased in size, gradually the waqf society will be realized.

This essay has been written by Hendri Tanjung, Imam Teguh Saptono and Imam Nur Azis ( Badan Wakaf Indonesia) and been published by Globak Islamic Finance Report, Cambridge 2019.