The instrument of wakaf is one that has been in practice since the time of the Prophet (peace be upon him). Marshall Hodgson, in The Venture of Islam, refers to wakaf as a vehicle for financing the Muslim society[1]. It is a powerful social finance tool that was pervasive and practised during the Ottoman empire. Here in Singapore, a recorded wakaf dates as far back as 1820. Most Muslims in Singapore understand the term wakaf as contributions to some religious properties such as mosques and madrasahs (religious schools), while others view it as a form of charity, for example the gifting of Quran or a prayer mat for people to benefit from.
WHAT EXACTLY IS WAKAF?
Wakaf is synonymous to endowment, but not exactly in the secular sense as it has its Islamic element. For Muslims, wakaf is a sadaqah jariah or a recurring charity that will assure one of the thawab or good deeds that will continue even after one has passed on. As Muslims, we believe that all deeds will come to an end except for three, as narrated in the hadith which the Prophet (pbuh) said,
“When the son of Adam dies, his actions come to an end except for three; sadaqah jariyah (ongoing charity), knowledge which brought benefit and a pious child who makes supplication for him.”[2]
In view of this, logically, you would like to wakaf something which has maximum perpetual characteristics to make your deeds as lasting as possible. Hence, the wakaf of properties and land becomes very prevalent and pervasive. This is also how the wakaf characteristics was formed based on the hadith on charity narrated by a companion of the Prophet, Sayyidina Umar (may Allah be pleased with him). He once asked the Prophet, “I have this great land in Khaibar and I would like to give it away such that it will please Allah swt.” The Prophet (pbuh) said, “If you wish you can keep it as an endowment to be used for charitable purposes.” So, Umar gave the land in charity (i.e. as an endowment) on the condition that the land would neither be sold nor given as a present, nor bequeathed, (and its yield) would be used for the poor, the kinsmen, the emancipation of slaves, jihad, and for guests and travellers; and its administrator could eat in a reasonable just manner, and he also could feed his friends without intending to be wealthy by its means[3].
Therefore, the above hadith forms the basis of the elements, and the legislative conditions for a wakaf. This means a wakaf cannot be sold, gifted, or inherited. In essence, once you wakaf, it is irrevocable and the capital should generate the usufruct, which in turn must be used for charitable purposes.
HISTORY OF WAKAF IN SINGAPORE[4]
Muslims used to be one of the largest landowners in Singapore, accounting for more than half of the land occupied of which some are in the form of wakaf [5].
The first known wakaf, which was created in Singapore, was the wakaf of the Omar Mosque of Kampung Melaka which was endowed by the late Syed Omar Aljunied. He was a trader from Indonesia, who had probably originated from Yemen in 1820. However, there could already be many wakaf in the form of mosques that may have existed before, as Islam had come to Singapore earlier than that.
The first wakaf legislation was passed under the British legislation in 1905. It was provided under the Mohammedan and Hindu Endowments Ordinance (Chapter 27) enacted on 8 September 1905. Most of the wakaf were created by the early settlers during the early 18th century, when merchants from Yemen and the Middle East set roots here in Singapore and created wakaf – a tradition they modelled from the rich wakaf history in their native countries.
There were also wakaf founders from the Indonesia Archipelago of Bugis descent, examples of which are the wakaf of Hajjah Daeng Tahira Haji Daeng Tadaleh, and some from India, such as the wakaf of Ahna Ally Mohammad Kassim. Most wakaf were created during the early migration of the Muslims in the late 19th and early 20th centuries. However, to date, there have been no new creations and registration of wakaf except a new cash wakaf called Wakaf Ilmu, which was introduced by the Islamic Religious Council of Singapore (MUIS) in 2012 so that the public can participate in the ibadah of wakaf [6].
LEGAL DEFINITION OF WAKAF IN SINGAPORE
While many of us will be familiar with just donating cash to the mosque as a form of wakaf for a room or wakaf for a mosque to meet our requirement of doing a wakaf under the Administration of Muslim Law Act (AMLA), such acts do not constitute or register as a wakaf.
Wakaf is an Arabic word that literally means stopping, binding or keeping in custody, detaining, closing or imprisoning. There are three definitions of wakaf found under AMLA: the definition of wakaf in general, ‘wakaf am’ (general wakaf ) and ‘wakaf khas’ (specific wakaf ).
The general definition of wakaf is the permanent dedication by a Muslim of any movable or immovable property for any purpose recognised by the Muslim law as pious, religious or charitable[7]. This definition emphasised that the dedication must be in perpetuity and permanent in nature. For example, if we dedicate the wakaf for a specific period of time, this will not render the dedication as a wakaf. This dedication applies to both the capital and income.
LEGAL STRUCTURE UNDER AMLA[8]
Before the advent of the AMLA on 1 July 1968, all endowments were regulated under the Hindu Endowments Ordinance (Chapter 27), which was enacted on 8 September 1905. When AMLA was created, MUIS inherited ten endowments from the Muslim and Hindu Endowments Ordinance[9].
Several amendments have been made over the years to strengthen the regulation of wakaf in Singapore further. One of the most important amendments was to include the registration of wakaf in MUIS under Section 64 of the AMLA. Prior to this, there were no means for MUIS to ascertain the existence of wakaf assets. The amendments were done arising from the many problems posed by self-managed trustees, which involved cases of mismanagement, such as the selling of wakaf properties, and where beneficiaries complained about not getting their dues. There is no legislation to prosecute recalcitrant trustees as there was often no evidence of the status of the properties being wakaf properties. Before the amendment of the law, there were only 28 wakaf recorded in the accounts of MUIS. However, after the law on registration was passed in 1999, private self-managed trustees came forward to register their wakaf. Thereafter, a total of 99 wakaf was recorded in the MUIS register by the year 2000.
After the amendments, the regulatory power to monitor a wakaf managed by trustees became more efficient, as AMLA also provides for trustees to submit accounts and seek prior approval for any changes, purchases or sale of properties to MUIS.
There are some cases where MUIS had taken action against trustees who had mismanaged wakaf. A case in kind is the wakaf of Syed Hood where the trustee was charged by the court for breach of trust and was sentenced to two years and nine months in jail[10].
Notwithstanding the court action, MUIS also has the power to remove and appoint mutawalli as provided in Section 58 (4) of the AMLA. In addition, wakaf in Singapore must comply with the yearly audit and many other financial regulations and procurement procedures, as well as investments requirements under the stringent Singapore government process and regulations. For religious governance, the fatwa serves as the authority in deciding the religious matters on wakaf. All these create robust and rigorous governance standards for wakaf management in Singapore.
WAKAF PORTFOLIO IN SINGAPORE
Wakaf forms the largest assets value of the total assets managed by MUIS. There are currently 91 wakaf registered under MUIS, of which 68 are MUIS- managed while 29 are trustees- managed[11]. Based on the 2020 MUIS annual report, total wakaf assets have swelled up to almost SGD1 billion. The portfolio of wakaf assets distribution based on audited financial year (FY) of 2020 figures by MUIS, is as follows:
Properties form the largest type of wakaf assets as they have the characteristic of perpetuity. Nevertheless, other forms of financial assets such as sukuk have also been invested. All the investments must be shariah-compliant in nature.
MUIS created a wholly-owned subsidiary, Warees Investment Pte Ltd, to ensure the professional management of its wakaf assets.
All these assets generate a total gross annual income of SGD19.2 million a year[12]. Every year, MUIS conducts a disbursement ceremony to announce and report the amount disbursed.
BENEFICIARIES OF WAKAF
Generally, most wakif (testator) will put the beneficiaries in their wakaf deed to mosques, madrasah, the poor and needy, and for education and burial purposes. For the disbursement of MUIS-managed wakaf in FY 2020, SGD4.92 million was disbursed to the following beneficiaries as listed in below table.
Based on the above table, ‘Mosque’ represents the largest beneficiaries of wakaf in Singapore. The category ‘Foreign’, which accounts for 26 percent, are beneficiaries outside Singapore. Since the wakif who created these wakaf came from Yemen, India and Indonesia, they therefore would want some assets to be allocated in their hometown. Generally, the beneficiaries – comprising both local and overseas – are also mosques, madrasahs and for poor families.
The philanthropists during the early years did not only create wakaf in the form of a mosque, they would also create a productive wakaf to ensure that the mosque has sustainable income to finance its upkeep and its operation.
There are many examples, one of which is Kassim Mosque, where the wakif created the wakaf and also rental properties to help sustain the mosque by providing funds to the mosque for its maintenance and operation. The same goes for Sultan Mosque, where several wakafs were created and made Sultan Mosque as their beneficiary. Mydin Mosque, Angullia Mosque, Hajjah Fatimah Mosque and many more have the same system where their wakafs are self-sustaining.
REVITALISING WAKAF IN SINGAPORE
The non-creation of new wakaf arises due to several probable reasons:
i) The lack of understanding, information and promotion on the creation of wakaf in Singapore. Unlike the creation of trusts where most Singaporeans will refer to the law firm or trust company to create their trust or endowment, many are unsure how to create wakaf.
ii) Property prices have escalated beyond the means of many Muslim Singaporeans to bequeath property as a wakaf.
iii) There are many other forms of donations, which are aggressively targeted at Muslims in Singapore such as madrasahs and mosques. By donating in the form of cash, most Muslims would view that they have participated in the act of wakaf and there is no need to create a dedicated wakaf, as currently in the manner managed by MUIS.
iv) As every wakaf is vested in MUIS, Muslims who may want to create wakaf may not be comfortable having their assets being managed by an authority.
MUIS has redeveloped and professionalised many of its wakafs to ensure they remain sustainable. MUIS has made its own investments and resources, and utilised many avenues so that the wakafs remain viable and productive. In the future, it will be more difficult to get Singapore Muslims to bequeath their assets as wakaf. With the looming economic uncertainty, wakaf as the third sector economy becomes more important to finance the gaps in the community. Therefore, the concept of cash wakaf can be the solution for the community to participate in this benevolent act of charity. This cash can then be invested in different asset classes to give the best possible return so that the needs of the community can be supported.
Singapore has been heralded as having one of the best wakaf management globally due to its transparent, innovative and progressive wakaf management[13]. Therefore, MUIS may want to position itself as a wakaf hub globally because of its excellent governance framework, and ride on Singapore as a premier financial hub in the region. In this way, it can attract many international philanthropists who would want safe and professional management and investment of their wakaf assets, and at the same time, support some of the community’s needs. Such an ecosystem will ensure all parties – the donors, the regulators, the trustees, the assets managers and the religious clerics – are working together to create a great wakaf institution. ⬛
1 Hodgson, M. The Venture of Islam, Volume 1 – The Classical Age of Islam. University of Chicago Press. 1977, February 15
2 Hadith Muslim, as narrated by Abu Hurairah (may Allah be pleased with him)
3 Excerpt from Hadith Sahih Al-Bukhari, Volume IV, p. 27
4 The whole paragraph on the history of wakaf in Singapore is an excerpt from the writer’s thesis; see: Abdul-Karim, S. Contemporary Shari’ah Structuring for the Development and Management of Waqf Assets in Singapore. Doctoral Thesis, Durham University. 2010. Available at: http://etheses.dur.ac.uk/778/
5 Brown, R. A. Islamic Endowments and the Land Economy in Singapore. South East Asia Research, 16:3, 2018. pp. 343-403. Retrieved from: https://doi.org/10.5367/000000008787133445
6 See: Islamic Religious Council of Singapore. Annual Report 2012. 2012. Retrieved from: https://www.muis.gov.sg/-/media/Files/Corporate-Site/Annual-Reports/MUIS-AR12.pdf
7 Administration of Muslim Law Act. Chapter 3. Accessed 2021, August 20 at: https://sso.agc.gov.sg/Act/AMLA1966#pr2-
8 Most facts and information are extracted from the writer’s thesis; see footnote 4
9 Ariff, M. The Islamic Voluntary Sector in Southeast Asia. In Amina Tyabji (Ed.), The Management of Muslim Funds in Singapore. Singapore: Institute of Southeast Asian Studies. 1991. p. 258
10 Singh, K. Abu Bakar Said Ahmad Alhabsi embezzled more than $176,000, which was meant to pay for the upkeep of a mosque in Yemen. The Straits Times. 2013, May 6.
11 Islamic Religious Council of Singapore (MUIS). History of Wakaf in Singapore. Accessed 2021, August 22 at: https://www.muis.gov.sg/wakaf/About/History-of-Wakaf-in-Singapore
12 MUIS. Resolved: Steering Forward as a Community in the Face of Challenges – MUIS Annual Report 2020. Available at: https://www.muis.gov.sg/-/media/Files/Corporate-Site/Annual-Reports/Muis-AR2020.pdf
13 Wakaf Bencoolen won a Regional Award for the category, ‘Regional Continuing Contribution to Islamic Finance’ at the Sheikh Mohammed Bin Rashid Al Maktoum Islamic Finance Awards for its Islamic sukuk financing model in 2008; see: Warees Investments Pte Ltd. Milestones. Available at: https://www.warees.sg/milestones/
Dr Shamsiah Abdul Karim is currently the Executive Director of Pergas Investment Holdings (PIH), a wholly owned subsidiary of Pergas. She also serves as the Shariah Advisor at Financial Shariah Advisory and Consultancy Singapore (FSAC), a subsidiary of PIH advising on matters pertaining to Islamic Finance. She is currently an industry fellow with University Science Malaysia (USM) under the Centre for Islamic Development and Management Studies (ISDEV). Former Deputy Director in MUIS and Chief Executive Officer of Albukhary Foundation, her expertise and specialisation are in the area of waqf, zakat, faraidh, Islamic banking and finance, and social finance.
