Waqf-related Investment, the Conditions for Its Validity, and the Actual Practice in Oman

The economy has been beset by a crisis that has left no one untouched, but the hardest hit has been the low-income class in the society. Islam has spread a social safety net by its economic system, which includes waqf, by which an asset is made inalienable while the usufruct is designated for a charitable purpose. It is a means by which economic amenities are made widely available to individuals in the society, particularly the feeble and the poor. Many people have undertaken this type of donation, seeking reward [from Allah], to the point that the aggregate value of waqf properties is running neck and neck with that of private property. Due to the importance mentioned, and in order to induce a revival of the national economy, Al-Rawaj decided -seeking the help of Allah- to conduct research on the investment of waqf assets in Oman to determine its effectiveness and the efficiency of the institution(s) conducting it. The circumstances dictate that the topic be divided into two sections; the first undertakes to determine the [Shariah] conditions for waqf-related investment. The conclusions reached in this section are then applied to the actual practice of waqf-related investment that is the subject of the study to determine how close or distant it is from them. In case it is close, such efforts should be multiplied. In case it is far removed from achieving the desired results, the institution conducting the administration and investment needs to be reexamined. The research revealed two things: first, the Shariah conditions for waqf-related investment, and [the second,] the actual practice in Oman. As for the conditions for waqf-related investment, the research concluded that they are six: first: the investment must be in Shariah-compliant activities; second: the investment should not transfer the ownership of the waqf asset; third: it should not contradict the stipulations of the waqf donor; fourth: the investment activity should not be high-risk; rather, the probability of profitability should be predominant; fifth: the investment activity should not cause loss to the waqf by giving it a return less than the going market rate for similar use of similar assets; sixth: the activity in which the waqf assets are invested should be consistent with the overall national economic plan. Regarding the practical reality, the research found a vast difference between these conditions and the practice of investment in Oman. Many waqf assets lie dormant, untouched by investment. Moreover, many waqf assets are being leased at below-market rates. This causes a loss to the society of wealth that could reduce the intensity of the present crisis. It also imposes many additional demands on the state budget in order to mitigate the shortfall.