The Role of Awqaf in Modern Economic Development

Abstract

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In recent years, there has been an increasing awareness of the role of awqaf in socio-economic development. The importance of this sector is seen in terms of the huge assets it controls, in its social expenditure, in the number of people it employs, and in its significant contribution to the economy which accounts for as much as ten percent of the GDP of many countries. With such significant economic output and growth in the number of non-profit organizations entrusted with awqaf properties for social programs, the sector is no longer seen as exclusively religious. With a broader business focus, it became clear that awqaf, in an economic sense, is an industry and is being subjected to increased scrutiny by government and regulatory authorities. This paper addresses concept of awqaf with respect to the economic development starting by the giving a historical review of the role of awqaf in the Muslim society, the status of awqaf today, awqaf organizations today and their contribution to the economy. The paper also focuses on issues that are relevant for the integration of awqaf into the mainstream of the Islamic financial industry. It also addresses the matters that are of concern to regulatory authorities and stakeholders.