Waqf Development in Malaysia and Singapore: a Comparative Study

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ACKNOWLEDGEMENT

Alhamdulillah, all praise to Allah, the most gracious and the most merciful for the guidance and blessing in realising my goal to achieve this success in my studies.

I would like to express my deepest appreciation to many people and organisations for their willingness to assist me in the process of completing this thesis. Firstly, I would like to dedicate a special thanks to my supervisor Prof Habib Ahmed for his guidance, assistance, support, patience and motivation throughout my study in Durham University. The amount of knowledge and experience that were gained are invaluable. He is very understood of difficulties and challenges that I have faced in completing this study. Without his guidance and persistent help this thesis would not have been completed.

I also would like to dedicate my special thanks and appreciation to my sponsor; Universiti Islam Sultan Sharif Ali (Sultan Sharif Ali Islamic University) for giving me this golden opportunity and for their financial support. In addition, the thanks should also be extended to waqf directors from Johor and Singapore for their supportive and cooperation and also for all respondents in Johor and Singapore whose willing provide me input for this study. This study will be incomplete without their cooperation and although it is consider as a small contribution but it means a huge for me in order to achieving the target.

Most of all, my special gratitude to all my family members especially to my husband; Haji Rosli, my

children; Mohammad Hilmi, Nur ‘Abqarah ‘Alya and Nur ‘Afiqah ‘Aliyah for their understanding and

helping me survive all the stress throughout the study. For my beloved mother; Hajah Siti Hosnah and my late father; Haji Mohiddin who really want to see his children reach into this level. This strength and capability is come from you and for you. They have supported me with their endless love, moral support, prayers and encouragement.

Last but not least, many thanks to all my friends and family in Durham who made our life during my study is enjoyable. May Allah always give His blessings to them in this world and the hereafter.

Ameen.

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DECLARATION

I hereby declare that no portion of the work that appears in this study has been used in support of an application of another degree in qualification to this or any other university or institutions of learning

STATEMENT OF COPYRIGHT

The copyright of this thesis rests with the author. No extract from it should be published without his prior written consent, and all information derived from it should be acknowledge

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ABSTRACT

Waqf Development in Malaysia and Singapore: A Comparative Study
Hajah Mas Nooraini Haji Mohiddin

Waqf or endowment as an institution begins with a pious intention to do good deeds for the benefit of one and others. In other words, waqf is a dedication made by one person for the benefit of others, with the intention that the dedicator be entitled to a continuous reward from Allah the Creator throughout the period of the endowment. Once the waqf is declared by the person it will effect a transfer of the property which is the subject matter of the dedication to Allah Almighty. However the benefit derived

from the use of property will be given in accordance with the founder’s intention. Historically, waqf

played a key role in the development of Muslim societies. Waqf served the Muslim community (ummah) in almost all fields, such as religion, education, medicine and other socio-economic activities. However, nowadays waqf has become dormant and less popular in Muslim countries. Waqf no longer serves the needs of the ummah due to problems, such as mismanagement, waqf laws and awareness of it in Muslim society. The status of waqf has deteriorated to such an extent that in some countries waqf assets have been neglected and abandoned. As a result of colonialism, Malaysia and Singapore adopted western laws, which precede Islamic laws including those dealing with waqf. Despite this, Johor and Singapore still provide the best models of the successful development of waqf. Therefore, it is interesting to compare the different environments and situations of the two states in order to identify the challenges faced by waqf institutions in both states.

Based on a comprehensive literature review of issues affecting waqf in the two states, the following major themes were identified; legal issues, perceptions, management and operation. The importance of the legal system is basically to support and protect waqf in areas such as registration or amending the deeds. Any change in contemporary law does not necessarily mean it is against Shariah principles, as long as the state regulation upholds Shariah principles, in order to protect the waqf while catering for the current situation. Generally, both quantitative and qualitative data support the theory that many people still believe that waqf is only for religious purposes. The data obtained from both states also show that national differences play an important role in the variation of knowledge and awareness of waqf. In managing waqf, there are problems or challenges that have to be faced. The problems that can be detected are from three kinds, namely; development, management and public awareness. However, lack of awareness amongst the public becomes problematic when there is a need to increase and

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improve waqf assets. Based on the empirical analysis presented in this thesis, the last chapter’s

purpose is to highlight policy recommendations with respect to improving waqf development and increasing public awareness. This small contribution not only fulfils the research requirement but hopefully also helps to make my beloved small country Brunei Darussalam more aware of and concerned with this important institution.

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TABLE OF CONTENTS

Page

ACKNOWLEDGMENTS DECLARATION ABSTRACT

ii iii iv

TABLE OF CONTENTS LIST OF TABLES LIST OF FIGURES GLOSSARY

vi xii xvii xviii xxiii

ABBREVATIONS
Chapter 1: Introduction

1.1 1.2 1.3 1.4 1.5

Introduction

1

2344
Statement of the Problem Rationale and Significance of the Study Research Aim and Objectives Research Questions

1.6 1.7
Research Methodology Structure of Research
56

Chapter 2: Non-profit Organisation: Organisational, Format, Operation and Management

2.1 2.2 2.3 2.4 2.5

Introduction

10

11 14 17 19 20
Concept and Principle of Non-profit Organisation The History of NPOs and Endowments The Role and Function of NPOs Law and NPOs 2.5.1 Management & Operation

vi

2.5.2 Different Types of NPOs 2.5.3 Source of Funds
26 26 28 29 32 33 35
2.6 2.7 2.8 2.9

Waqf Institutions

Relation between Waqf, Trust & Endowment

State Law’s Impact on Waqf Application

Philanthropic Behaviour/Motivation
2.10 Conclusion

Chapter 3: Waqf in Islam

3.1 3.2 3.3 3.4

Introduction

36

36 39 43 44 45 45 48 48 49 51 53 56
Waqf and Other Related Concept: Infaq, Sadaqah and Donation Concept and Principles

Types of Waqf

3.4.1 Objective 3.4.2 Tenor 3.4.3 Assets Utilisation
3.5

Waqf History

3.5.1 Waqf in Pre-Islamic Times 3.5.2 Waqf in Early Islam 3.5.3 Development of Waqf after the Prophet Era The Origin and Practice of Waqf Waqf Legal Conditions
3.6 3.7

vii

3.5.1 Process of Establishment a Waqf 3.5.2 Founder or Creator
56 58

3.5.3 Waqf Asset

59
3.5.4 Beneficiaries (Outcomes) Waqf Management & Administration Legal Characteristics of Waqf
61 62 68
3.8 3.9

3.10 Ownership of Waqf Property

69

3.11 Waqf Output/Beneficiaries
3.11.1 Religion
70 71

71

3.11.2 Education

3.11.3 Medical

72

73

3.11.4 Socio-Economic Support

3.12 Waqf Development on Contemporary Era
3.12.1 Waqf Development in Muslim Countries 3.12.2 Waqf Management in Non-Muslim Countries
3.13 Conclusion
74 75 76 79

Chapter 4: Waqf in Johor, Malaysia and Singapore

4.1 4.2 4.3 4.4 4.5

Introduction

80

Background of Singapore and Johor The History of Waqf in Malaysia Waqf Development in Malaysia
81 83 88 92 92 94

Waqf in Johor

4.5.1 The Provision of Waqf in Johor Legislations 4.5.2 The Administration of Waqf in Johor

viii

4.6

The Origins and Development of Waqf in Singapore

4.6.1 The Provision of Waqf in Singapore
103 105

107

4.6.2 The Administration of Waqf in Singapore

4.7 4.8

The Impact of Waqf in Various Fields in Johor and Singapore

117

119

Conclusion

Chapter 5: Research Methodology

5.1 5.2 5.3 5.4 5.5

Introduction

120

120 121 123 126 127 128 129 130 131 131
Research Aim, Objectives and Questions Research Methodology Research Process Research Approach, Strategy and Purpose 5.5.2. Research According to Approach 5.5.1 Research According to Strategy 5.5.3. Research Design

5.6

Research Methods for Data Collection

5.6.1 Research Method Instruments
5.6.1.1 Data Collection Tools

5.6.1.2 Level of Measurement

132

137

5.6.1.3. Survey and Interview Format

5.7 5.8 5.9

Sampling

141

145 141
The Process of Collecting Data Techniques of Data Analysis

ix

5.10 Statistical Methods 5.11 Limitation & Difficulties 5.12 Conclusion
148 149 150

Chapter 6: Analysis of Perceptions on Waqf Knowledge and Distribution

6.1 6.2

Introduction

152

Respondents’ Background

6.3 6.4 6.5 6.6 6.7

Respondents Knowledge on Waqf

162

172 193 211 218

Respondents’ Practise on Waqf Establishment

Experience and Reaction of Respondents towards Waqf Management Respondents Opinion on Waqf Beneficiaries and Outcomes Conclusion

Chapter 7: Exploring Knowledge and Perceptions on Waqf: Inferential Analysis

7.1 7.2

Introduction

220

220 220 226 235 238 245 247 247 254 266 268
Awareness and Knowledge 7.2.1 Waqf Concept

7.2.2. Waqf Asset

7.3 7.4
Determinants of Waqf Creation: A Logistic Regression Analysis 7.3.1 Practising Waqf 7.3.2 Constraints of Waqf Contribution

Waqf Management

7.4.1 Changes in Waqf Deed 7.4.2 Criteria for Satisfaction 7.4.3 Preferred Entities

Conclusion

7.5

x

Chapter 8: Exploring Waqf Perceptions: Interview Analysis

Introduction

8.1

8.2 8.3 8.4 8.5 8.6 8.7
270 270 271 276 282 291 292
Findings Contemporary Law Issues Administration and Management Issues Contemporary Waqf Issues Public Involvement Conclusion

Chapter 9: Summary and Contextualisation of Findings

9.1 9.2

Introduction

293

294

Contextualising the Findings

9.2.1 Legal Issues

294

299

9.2.2 Perception of Stakeholders on Waqf

9.2.3 Management and Operations Conclusion
303

310

9.3

Chapter 10: Conclusion and Recommendations

10.1 Introduction

314

10.2 Summary of the Research

10.3 Recommendations

316

319 319 320
10.4 Limitations of the Research 10.5 Suggestions for Future Research 10.6 Epilogue

BIBLIOGRAPHY APPENDICE

321 346

xi

LIST OF TABLES
Description

Chapters and Research Questions

No

1.1

Page

8
2.1 4.1 4.2 4.3 4.4 4.5 5.1 5.2 5.3 5.4 6.1 6.2 6.3 6.4 6.5 6.6 6.7

The Comparison between Waqf, Trust and Endowment Existing Projects under MAIJ

31 97

Waqf Real Estate in Johor

98

Distribution of Profit Dividends of Jcorp Projects Some Development of Waqf Properties in Singapore

Contribution Table for the Mosque Building and Mendaki Fund The Method Applied in Answering the Research Questions The Type of Questions and Information Gathered Type of Scale Measurement Used in the Questionnaire

Reliability Statistics (Cronbach’s Alpha Coefficient) Respondent’s Gender

101 108 111 125 126 134 147 153 153 155 156 157 158 159
Respondents by Age Group Respondents by Marital Status Respondents by Educational Level Respondents Monthly Income

Respondents’ Children Respondents’ Employment Sector

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6.8

Respondents’ Religion

160 161 162 163 165 170 173 174 176 177 182 184 187 189 192 195 197 198 201 205 207
6.9

Respondents’ Occupation

6.10 6.11 6.12 6.13 6.14 6.15 6.16 6.17 6.18 6.19 6.20 6.21 6.22 6.23 6.24 6.25 6.26 6.27 6.28
Respondents Knowledge on Waqf Respondents Knowledge on Temporary Waqf Respondents Knowledge on Waqf Asset Respondents Knowledge on Cash Waqf Respondent Reaction on Waqf Creation The Type of Waqf that have been Established by Respondents Respondents Response on Waqf Contribution The Constraint of Waqf Creation Respondents Choice on Making Permanent Donation

Respondents’ Reaction on Waqf Donation and it Process Respondents’ Responses on Non-Muslims Waqf Establishment Respondents’ Responses on Purpose of Making Permanent Waqf

Respondent Reaction on Making Charity as Sadaqah or Waqf Respondent Reaction on Changing Waqf Deed’s on Asset Respondent Reaction on Changing a Waqf Deed’s Output Respondent Reaction on Changing a Waqf Deed’s Beneficiaries

Respondents’ Perspective on Waqf Procedure Managed by SIRC

Respondents’ Response on Waqf Management by Particular Bodies Waqf Manager Ranking by Respondents

xiii

6.29

Respondents’ Satisfaction with Different Entities’ Management of

209

waqf

6.30 6.31 7.1

Respondents Reaction on Waqf Beneficiaries or Outcomes by States

215

217 222

Respondents’ Reaction to the Field of Waqf Objective Mann-Whitney U and Kruskal-Wallis Test: Respondents’ Familiarity

with the Different between Waqf and Sadaqah

7.2

Mann-Whitney U and Kruskal-Wallis Test: Respondents Familiarity

222

on Temporary Waqf

7.3 7.4 7.5 7.6 7.7 7.8 7.9 7.10 7.11

Waqf Usage for Mosques

224

224 224 225 225 225 226 226 228
Waqf Usage for Cemetery Waqf Usage for Religious School Waqf Usage for Education Waqf Usage for Family Members Waqf Usage for Medical Services Waqf Usage for Needy or Poor People Waqf Usage for Other Objective

Mann-Whitney U and Kruskal –Wallis Test: Respondents’ Knowledge

on the Waqf Asset
7.12

7.13
Mann-Whitney U and Kruskal –Wallis Test: Respondents’ Knowledge on the Flexibility of Waqf Cash
232 233

on Cash Waqf Investment Through Islamic Instrument and the Revenue Produced Used for Pious Purposes

7.14

7.15

on the Waqf Cash Investment that can Create More Waqf Assets
234 234

on the Cash Waqf that Used for Waqf Assets Maintenance

xiv

7.16 7.17

Goodness of Fit

236

237

Logistic Regression Results on Respondents Likely to Create a Waqf

and Its Associations With Demographic Predictors

7.18

7.19 7.20 7.21 7.22
Cross-tabulation: Kind of Waqf Establishment By Region Cross-tabulation: Kind of Waqf Establishment By Age Cross-tabulation: Kind of Waqf Establishment by Education Cross-tabulation: Frequently of waqf creation
239 240 241 244

245

Cross-tabulation: Respondents Response on Constraint that Contribute

to Waqf

7.23 7.24

Cross-tabulation: Respondent Choice of Permanent Donation Form

246

248

Mann-Whitney Changed by U and Kruskal Wallis Test: Respondents

Knowledge on Changing Waqf Deed on Assets by Waqf Management

7.25

7.26 7.27 7.28 7.29 7.30 7.31 7.32
Mann-Whitney and Kruskal Wallis Test: Respondents Knowledge on Changing Waqf Deed on Output by Waqf Management
251 253 255 256 257 258 259 260
Mann-Whitney and Kruskal Wallis Test: Respondents Knowledge on Changing Waqf Deed on Beneficiaries by Waqf Management

Cross-tabulation: Respondents’ Response on Efficiency Satisfaction

with Waqf Managements from Three Entities

Respondents’ Response on Reliable Satisfaction with Waqf

Managements From Three Entities

Respondents’ Response on Good Waqf Managements from Three

Entities

Respondents’ Response on Productive Waqf Managements from Three

Entities

Respondents’ Response on Simple Procedure Waqf Managements

from Three Entities

Respondents’ Response on Tax Exemption in Waqf Managements

from Three Entities