Bangladesh can reduce poverty at significant level by waqf’s resource mobilisation and ensuring good governance in its management, speakers said at a seminar on “The Waqf and Human Capital Development,” organized by Bangladesh Institute of Islamic Finance (BIIF), held at its conference hall in Dhaka’s Motijheel on Saturday, 17 February, 2024.
Dr. M Kabir Hassan, professor of economics and finance at the University of New Orleans, USA, gave a keynote presentation on the topic. After completing lecture of this prominent international economist, a lively question-answer session with the audience were held.
Professor Kabir mentioned that, Saudi Arabia, Indonesia, and ancient Bengal’s contribution to poverty alleviation and social welfare activities through the asset of waqf. He said the western world borrowed the idea of waqf from this subcontinent and the Muslim world, and then they established world-famous universities in the USA and UK based waqf properties.
Kabir said the registered waqf’s asset volume in Saudi Arabia is equivalent to US $430 billion, and Bangladesh has potential waqf property, which utilizes poverty alleviation by establishing good governance and introducing a smart management system.
He also said, `Human capital constitutes 80% of the wealth in advanced countries like USA. Economic growth in countries like Japan, Taiwan, Hong Kong, South Korea, and Singapore demonstrates the importance of human capital. Despite lacking natural resources, they rely on their educated, healthy, and hardworking populations.
There is a direct correlation between education and poverty reduction. A waqf is an Islamic philanthropic foundation established by a wealthy person to provide critical social services, particularly education and health, in perpetuity. Higher education reform in the Islamic World should blend waqfs and incorporation for more vital institutions. Unincorporated waqfs, when not allowed founder control, tend to become state-owned over time, leading to bureaucratization and loss of dynamism. State-owned universities lose academic freedom and excellence, hindering idea development and potentially leading to state failure. The first reform step involves enacting a new waqf law to address past harm inflicted on waqfs. The second step entails incorporating newly established waqf college universities and granting them autonomy and self-governance. The third step involves fostering strong university-industry linkages by combining incorporated waqf universities with venture capital.
Some endowment funds have guidelines stating how much of each year’s investment income can be spent – 5% is the mark at many universities, such as Harvard. As such, Harvard’s incredible endowment allows for great spending ability (Harvard University website, Endowment page). The most elite schools tend to have the largest endowments, and the endowment valuation sees rapid reduction after the top 20 to 25 institutions.
The top universities that lead endowment valuation benefit from factors such as alumni donation, location, age, and pedigree. Again, they ultimately spend a portion of the endowment (sometimes limiting spending to the interest accrual), and in the long run, the endowment is expected to continue its growth. Essentially, the endowment is a vehicle where a university can expense operational costs, invest in new technology and resources, and procure new donations; all the while, the endowment is structured to grow on its own, withstanding the aforementioned benefits. It is important to note that not every university has endowment funds, as universities can garner funding through state governments. Additionally, many public and state institutions pool under the same system and one endowment fund across multiple campuses around the state.
What is very interesting is that American universities lead universities from other countries significantly in terms of endowment. Oxford, which checks all the boxes regarding having notable alumni, a great location, an astounding pedigree, and one of the oldest universities, has a fraction of endowment compared to leading American universities. The reasons for this point out that the United States higher education has significantly more privatization and centralization. Colleges within non-American universities are often their financial entity that applies for federal or state funding on its own. In general, non-American universities rely much more on government funding, and many of the prominent universities in other countries are public institutions. These public institutions have also generated wealth in other countries through asset ownership in land, patents, and artifacts. Lastly, the culture of alumni donations is more prevalent in the United States than in other countries.’
Speaking on the topic, Dr. Md Akhtaruzzaman, Director General of the Bangladesh Institute of Bank Management (BIBM), a concern of Bangladesh Bank, said there are more than 4 crore people in Bangladesh under the poverty line, despite different initiatives of the government for poverty alleviation.
He said that the government alone of a country cannot eradicate poverty; in this sector, waqf can play a very significant role in alleviating poverty. He urged the rich and capable citizens of the country to establish waqf property, which will play a role in human welfare here and hereafter.
Dr M Abdul Aziz, founder director of BIIF and visiting faculty of IUT, Abul Kalam Azad, CEO of Takaful Islami Insurance Ltd, Shah Abdul Halim, , Author & Scholar; Dr Afroza Bulbul, among others, also spoke at the seminar.
