Waqf Prosperity Dakwah Dignity and Eternity Waqf Development

Waqf: Prosperity, Dakwah, Dignity and Eternity Waqf Development in Indonesia: Challenges and Opportunities By Prof. Dr. Mohammad NUH Chairman of Indonesian Waqf Board Bangkok, 20 November, 2018

Agenda • Introduction • Opportunity of waqf development in Indonesia • • Population and demographic dividend Culture and value Trends of prosperity Big market of Islamic economy and Digital dividend • What we should do • Ecosystem development and shifting paradigm • Preparing new waqf generation • Develop waqf core principles and waqf linked sukuk • Best practices • Pondok pesantren Gontor • Universitas Islam Malang • Conclusion

ﻣﻮﻟﺪ ﺍﻟﻨﺒﻲ 12 Rabiul Awal 1440 H

Introduction: Lesson learned from Kodak and Nokia Phenomenon

(1) Lesson learned from Kodak: Adaptation and Innovation Greatness period

(2) Lesson learned from Nokia: Adaptation and Innovation Reinvestment Normal growth Greatness period De clin ed pha se Sustainable Growth = Adaptation + Innovation Role of Nadzir : Growing up asset value of waqf with

(3) Lesson learned from Giant Lake: Transformation: Maximum number but minimum power to be maximum power

Opportunities of waqf Development in Indonesia: Population and Demographic Dividend

World Islamic Population: 1990, 2010 and 2030 (est)

Number of Religion in Indonesia Religion Islam Christian Catholic Hindu Budhism Kong Hu Cu Others Total Number 207. 176. 162 16. 528. 513 6. 907. 873 4. 012. 116 1. 703. 254 117. 091 1. 196. 317 237. 641. 326 % 87. 18 6. 96 2. 91 1. 69 0. 72 0. 13 0. 51 Source: Biro Pusat Statistik, Sensus 2014

~ 70 % Strategic momentum

Digital Native (Z) After 2010 (0 -8) Milinial (Y) 1995 -2010 (8 -21) Generation (X ) 1980 -1995 (22 -36) Students After 2010 (10 -20) 1946 -1964 (53 -71) 1928 -1945 (72 -89) Waqif, Muzakki and Donor Milinial (Y) Alpha 2030 1965 -1980 (37 -52) Boomers Silent Generation Alpha Generation 2018 Welcome Millennial and Digital Native Generation: Civilization Transformer 1995 -2010 (21 -35) 1980 -1995 (36 -49) Digital Native (Z) Waqif, Muzakki, Donor Generasi (X ) 1965 -1980 (50 -65) Boomers 1946 -1964 (66 -84)

Ageing population in ASEAN and other Asian Economies Source: International Monetary Fund, 2017, World Population Prospect, UN Population Division, 2017

Prosperity Indicator

Human Development: Key of prosperity

Opportunities of waqf Development in Indonesia: Culture and Value

Habib Bugak: Notable from Aceh (1800 M-1224 H, Hotel and Jiad Tower in Mekkah) raise seeding Habib Bugak 21 century

Translation of waqf Ikrar Rumah tersebut (Baitul Aysi) dijadikan tempat tinggal jamaah haji asal Aceh yang datang ke Mekah untuk menunaikan ibadah haji dan juga tempat tinggal orang asal Aceh yang menetap di Mekah. Sekiranya karena sesuatu sebab tidak ada lagi orang Aceh yang datang ke Mekah untuk haji, maka rumah wakaf ini digunakan untuk tempat tinggal para pelajar (santri atau mahasiswa) Jawi, ”. (Jawi istilah yang waktu itu digunakan untuk menyebut pelajar atau mahasiswa wilayah Asia Tenggara) yang belajar di Mekah). “Sekiranya karena sesuatu sebab mahasiswa Asia Tenggara pun tidak ada lagi yang belajar di Mekah maka rumah wakaf ini digunakan untuk tempat tinggal mahasiswa Mekah yang belajar di Masjidil Haram, sekiranya mereka inipun tidak ada juga, maka wakaf ini diserahkan kepada Imam Masjidil Haram untuk membiayai keperluan Masjidil Haram. ”

Charities Aid Foundation, October 2018 Top 10 countries in the CAF World Giving Index 2018

Opportunities of waqf Development in Indonesia: Trend of Prosperity

Indonesia Middle Income Trends Well educated – Digital generation very fragile Frost and Sullivan 2016: Indonesia Health care outlook

Middle Income Forecasting 2012 (million) 2020 (million) Vertical Mobility

Opportunities of waqf Development in Indonesia: Big market for islamic economy

Opportunity to increase the role of Indonesia State of the Global Islamic Economy Report 2017/2018

Opportunities of waqf Development in Indonesia: Take advantage of Digital Dividend

New Innovation: Faster

Digital Disruption Past Disruption 100 X The power

Key Enablers for Digital Transformation Source: The Future of ASEAN-Time to Act, Pw. C, May 2018

Future Value: Innovation and Data Driven For: Mauquf ‘alaih Waqif, Nadzir Society and Government Participatory Precise Predictive Proactive Adopted From: When the human body is the biggest data platform, who will capture value? Progressions 2018, Life Sciences 4. 0: Securing value EY 2018

Growth in Device Connectivity Between 1990 and 2022

What we should do ?

What we should do • Develop ecosystem and shifted paradigm (musabaqohmuawwanah) • Increase number of waqif through literation and awareness • Increase amount and diversity of waqf asset • Strengthen nadzir competencies-capacity building in creating added value of waqf asset (sense of business, entrepreneurship and value creation) • Improving quality of governance –compliance with good governance principals-waqf core principles) • Divers in the managing of waqf asset with zero (minimum) risk principal (waqf linked sukuk), especially to support Islamic economy

What we should do ? Develop ecosystem and shifting paradigm

Maqosid syariah: main objective creating ‘kemaslahatan’ Dunia-Akhirat ﻭﺿﻌﺖ ﻟﺘﺤﻘﻴﻖ ﻣﻘﺎﺻﺪ ﺍﻟﺸﺎﺭﻉ ﻓﻲ ﻗﻴﺎﻡ ﻣﺼﺎﻟﺤﻬﻢ ﻓﻲ ﺍﻟﺪﻳﻦ ﻭﺍﻟﺪﻧﻴﺎ ﻣﻌﺎ “Sesungguhnya syariat itu ditetapkan bertujuan untuk tegaknya (mewujudkan) kemashlahatan manusia di dunia dan Akhirat” ﺍﻻﺣﻜﺎﻡ ﻣﺸﺮﻭﻋﺔ ﻟﻤﺼﺎﻟﺢ ﺍﻟﻌﺒﺎﺩ. “Hukum-hukum diundangkan untuk kemashlahatan hamba”. Al Muwwafakat (Imam Al Syathibi)

Ecosystem Convergence-synergy Good Governance Maximum Impact Commercial Finance Islamic Bank Islamic Finance Strengthening Empowering and Synergizing Value Creation Ecosystem ﻣﻘﺎﺻﺪ ﺍﻟﺸﺎﺭﻉ Kemaslahatan: Dunia-Akhirat Social Finance ZISWAF

Shifting Paradigm from competition to synergy: Necessity Global Collaboration Formidability: Volume x Synergy Musabaqoh VS Mu’awanah (The Power of ‘We’) Saya Nadzir 1 Nadzir 2 Nadzir 1 Kami Nadzir n Nadzir 3 Nadzir 2 Nadzir 4 Each Nadzir as the entity alone Nadzir 3 Nadzir 4 Kita Each Nadzir as the part of ZISWAF and Islamic Finance system

Prinsip Dasar Muawanah ﻭﺗﻌﺎﻭﻧﻮﺍ ﻋﻠﻰ ﺍﻟﺒﺮ ﻭﺍﺍﺗﻘﻮﻯ ﻭﻻ ﺗﻌﺎﻭﻧﻮﺍ ﻋﻠﻰ ﺍﻹﺛﻢ ﻭﺍﻟﻌﺪﻭﺍﻥ ﻭﺗﻘﻮﺍ ﺍﻟﻠﻪ ﺍﻥ ﺍﻟﻠﻪ . ﺷﺪﻳﺪ ﺍﻟﻌﻘﺎﺏ ‘Dan tolong menolonglah kamu dalam kebaikan dan taqwa, dan janganlah kamu tolong menolonga dalam berbuat dosa dan pelanggaran. Dan bertaqwalah kepada Allah sesungguhnya Allah amat berat siksaannya’. (Al Maidah: 2) ﻗﺎﻝ ﺭﺳﻮﻝ ﺍﻟﻠﻪ ﺻﻠﻰ ﺍﻟﻠﻪ ﻋﻠﻴﻪ ﻭﺳﻠﻢ ﻭﺍﻟﻠﻪ ﻓﻲ ﻋﻮﻥ ﺍﻟﻌﺒﺪ : ﻋﻦ ﺍﺑﻲ ﻫﺮﻳﺮﺓ ﻗﺎﻝ . ( )ﺭﻭﺍﻩ ﻣﻴﻠﻢ. ﻣﺎ ﻛﺎﻥ ﺍﻟﻌﺒﺪ ﻓﻲ ﻋﻮﻥ ﺍﺧﻴﻪ Dari Abi Hurairah bahwasanya Rasulullah saw. , telah bersabda: “Allah swt. akan menolong seorang hamba selama hamba menolong saudaranya” (HR. Muslim).

What we should do ? Preparing the new waqf generation (millennial and digital native)

Sahabat around Rasulullah SAW: young generation 1. Ali bin Abi Thalib dan Zubair bin Al-Awwam (8 years) 2. Thalhah bin Ubaidillah (11 years) 3. Al-Arqaam bin Abil Arqaam (12 years) 4. Abdullah bin Mazh’un (17 yaers) 5. Ja’far bin Abi Thalib (18 yaers) 6. Qudaamah bin Abi Mazh’un (19 years) 7. Said bin Zaid dan Shuhaib Ar Rumi (under 20 years) 8. 'Aamir bin Fahirah (23 years) 9. Mush’ab bin ‘Umair dan Al Miqdad bin al Aswad (24 years) 10. Abdullah bin al Jahsy (25 years) 11. Umar bin al Khathab (26 years) 12. Abu Ubaidah Ibnuk Jarrah dan ‘Utbah bin Rabi’ah, ‘Amir bin Rabiah, Nu’aim bin Abdillah, ‘ Usman bin Mazh’un, Abu Salamah, Abdurrahman bin Auf (around 30 years) 13. Ammar bin Yasir (30 years) 14. Abu Bakar Ash Shiddiq (37 years). 15. Hamzah bin Abdul Muththalib (42 years) 16. 'Ubaidah bin Al Harith (50 yars). Who initiated to kill Abu Jahal ? Muaz bin Amr Al-jamuh, 14 year and Muawwiz bin Afra 13 years Conqueror Byzantium (Istambul): El Fatih (21 years) Sultan Memhmet 2

Why the campus as the main target of waqf dissemination: Preparing new waqf generation • Well educated people and they have prosperous future • A part of demographic dividend-working age (68 % total population) • Growing up of religiosity awareness • Waqf habituation and culture • Technology (digital) savvy Most likely to be the donor (waqif)

Waqf Goes to Campus 1. Univ. Indonesia 2. Inst. Teknologi Bandung 3. Univ. Pendidikan Indonesia 4. Univ. Islam Negeri Bandung 5. Univ. Airlangga 6. Inst. Teknologi sepuluh nopember 7. Univ. Islam Negeri Sunan Ampel 8. Univ. Negeri Surabaya 9. Univ. Brawijaya

What we should do ? Preparing waqf core principles (WCP) and waqf linked sukuk

(b) (a) Launching of Waqf Core Principles and Cash Waqf Linked Sukuk Bali, 14 October 2018 (IMF and WB Meeting) (c) (a) Governor of Bank Indonesia (b) Minister of Finance (c) Chairman of Indonesian Waqf Board

Waqf Core Principles Contents: Launched on October 2018 Area of regulation in wcp

Waqf Linked Sukuk scheme: Innovation based on Cooperation between Indonesian waqf board, Ministry of Finance and Bank Indonesia

Best Practices

Best Practices: Pondok Pesantren Gontor East Java

Founding Fathers of Pondok Pesantren Gontor, East Java Indonesia K. H Ahmad Sahal (1901 -1977) K. H Zainudin Fannani (1908 -1967) K. H Imam Zarkasyi (1910 -1985)

Milestone of Pondok Pesantren Gontor, East Java Indonesia Masjid pusaka, 1. 7 ha & building 1936 Handover waqf asset 1958 Establishment Dakwah Institute University Darussalam Gontor From 1. 7 Ha 1. 265 Ha 1926 Masjid pusaka & 1. 7 ha land 1942 Increasing number of santri (student) 1962 Receive 200 ha land 1995 Expansion Pondok Gontor 2018 Santri & Guru 26. 560, Tanah wakaf 1. 265 Ha, Building and Education infrastructure in 20 Campus. 1963 2014

Best Practices: Universitas Islam Malang Waqif (Ministry of Religion) Cash waqf: IDR 2. 000 Nadzir: UNISMA VIP Building II Unisma Hospital (IDR 1. 344. 728. 000) VIP Building I Unisma Hospital (IDR 2. 350. 000) Profit Allocation Nadzir: 10 % Minimarket I. Asset value: IDR 1. 900. 000 Mauquf alaih: 20 % Mauquf alaih: Waqf 20 % Development: 70 % Minimarket II. Asset value: IDR 556. 000 Minimarket III. Asset value: IDR 600. 000 Nadzir: 10 % Other Services: Go Fish Asset value: IDR 92. 000

Waqf: One Give For Many Generation