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Keynote Address by YABhg. Tun Abdullah Ahmad Badawi,

5 November 2015 (WIEF)

“The Role of Islamic Finance and Waqf in Healthcare”

Bismillah al-Rahman al-Rahim

Assalamualaikum Warahmatullahi Wabarakatuh -

Good Morning

It is with great pleasure for me to be here on the

occasion of 11th World Islamic Economic Forum 2015 to

speak on “The Role of Islamic Finance and Waqf in

Healthcare”.

Waqf is an important Islamic institution that supports

both the social welfare and economic development

objectives of society. The benefits it has historically

provided had been wide-ranging, including the building

and upkeep of mosques, education and

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healthcare services, as well as guest houses, water

wells and rest facilities for travellers.

The concept originates in the guidelines that Prophet

Muhammad, PBUH, gave to Umar Al-Khattab. The latter

had a piece of land in Khaybar and told the Prophet that

this was the best property he had but he wanted to

donate it to charity. The Prophet advised that he may

hold the property as waqf, and give its yield into charity.

The Prophet PBUH also took a keen interest in

healthcare so much so that a substantive body of his

sayings has given rise to the development of a separate

discipline of learning in the name of al-Tibb al-Nabawi

(Prophetic medicine),

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which brings together his detailed instructions on the

subject. In one hadith, the Prophet highlighted the many

rights that the faithful should be mindful about, one of

which is that “your body has a right over you,” thus

making healthcare an integral part of the Islamic faith

and ethos.

Reading these messages in the context of the goals and

purposes, or maqasid, of Shariah, it is imperative for an

Islamic polity to ensure that protection of life and health

are high on the priority list of Islamic finance and the

value structure it seeks to protect.

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Ladies and Gentlemen!

Since waqf is an endowment in perpetuity, it has

increased over time in all parts of the Muslim world and

become a major supporter of welfare services, and more

recently also an important vehicle of economic

development. It is indeed a form of financial

intermediation that is well anchored in the real economy

and social welfare objectives.

An impressive initiative of financing poverty alleviation

through waqf has been taken by the World Waqf

Foundation of the Islamic Development Bank, which has

set up the Islamic Solidarity Fund for Development. This

Fund, is based entirely on waqf and has a principal

target capital of US$10 billion aimed at reducing poverty,

reducing illiteracy, and combating disease, particularly

Malaria, Tuberculosis (TB) and AIDS.

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These initiatives have materialised through greater

international cooperation in Islamic finance that also

taps into the vast potentials of waqf as a vehicle of

economic development. Going forward, the Islamic

financial system is envisaged to play an increasingly

important role in connecting the world economies

through facilitating increased international trade and

investment activities.

Ladies and gentlemen;

In Malaysia, the government and regulatory authorities

have made eye-catching efforts to enhance the depth

and diversity of the Islamic financial system over the

years, which have more recently extended into important

initiatives for the development of awqaf.

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Hailed as the first of its kind, Malaysia established the

Labuan International Waqf Foundation in 2015 with the

objective of managing waqf properties based on the

Shariah principles. It recognises different types of waqf

to attract domestic and international participants,

including:

• charitable waqf (al-waqf al-khairi)

• family waqf (al-waqf al-ahli)

• joint waqf (al-waqf al-mushtarak)

• self-dedicated waqf (al-waqf ‘ala al-nafs).

This has resulted in simplified procedures whereby the

registration of waqf has become less bureaucratic and

waqf can operate independently from State’s jurisdiction.

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Ladies and Gentlemen,

The potential of waqf institution in improving the quality

of life of the Muslim remains relevant even today as it

used to be in the past. In area of healthcare, the

innovativeness of corporate waqf pioneered by the

Malaysian Johor Corporation or JCorp is another proof

that waqf is a dynamic economic instrument of Islam

which its practicality remains valid regardless of

timeframe and where the concept is applied or who

applies it.

The JCorp waqf programme was established on August

3, 2006 when the corporation endowed RM200 million

worth of its share in three of its public listed subsidiaries

namely Kulim (Malaysia) Berhad, KPJ Healthcare

Berhad and Johor Land Berhad to a waqf programme.

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Waqaf An-Nur Corporation Berhad is a company

established under limited guarantee by JCorp, entrusted

with managing all equity PLC shares transferred by

JCorp to Waqaf.

In order to ensure the corpus of waqf remains intact,

only the dividend earned from these shares is

channelled to the intended beneficiaries or purposes.

One of them is to finance the operation of 20 Waqaf An-

Nur Clinics (KWAN) and Waqaf An-Nur Hospitals

(HWAN) in several states in Malaysia. In term of

percentage, the allocation channelled stands at 12.5%

on a firm commitment basis.

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The main objective of KWAN and HWAN’s

establishments is to provide healthcare treatments and

dialysis facilities at nominal charge to the general public

particularly the deserving, regardless of ethnicity and

religion.

Until June 2015, a total of 1,098,510 treatments were

discharged to the patients in the chain of KWAN. Out of

that portion, 84,045 treatments were extended to non-

Muslim patients.

The initiative of JCorp could be replicated by other

corporations and philanthropic foundations. It is hoped

that by emulating this exemplary deed, the access to

good healthcare for all members of society – regardless

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of their genetic status – will improve as more charity

based clinics and hospitals will be built throughout the

country.

All this is indicative of the synergies between waqf and

Islamic finance to meet the changing demands of the

modern economy. The combined resources of waqf and

Islamic finance can certainly be used to develop

innovative healthcare products as their most important

contributions to society.

Ladies and Gentlemen!

The waqf sector can be further developed through

supportive legislation and policy initiatives. To this end,

Malaysia and other Muslim countries should design

coordinated action plans for better exploitation of waqf

resources within and beyond their countries for the

benefit of the Ummah.

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Efforts are also needed perhaps to make the awqaf self-

supporting and economically viable, which would

require, in turn, policy initiatives and law reform. Some

of this has already occurred but there is scope for wider

levels of cooperation.

Ladies and Gentlemen!

WIEF has become the Islamic equivalent of Davos’s

World Economic Forum. It has become a vibrant venue

for important initiatives. I am confident that WIEF 2015

will be another milestone of achievement. I wish all of

you great success in your deliberations.

Thank you