The Evolution of Waqf and Sukuk toward Sukuk-Waqf in Modern Islamic Economy

Abstract

Waqf have played a significant role throughout Islamic civilization history. In the past, sukuk had been used for international trade in Muslim territory in the Middle Ages as a recognition check or document or letter of liabilities of a person who requested deferred his time to certain parties. Today, waqf and sukuk have evoluted toward a new instrument known as sukuk-waqf. Sukuk-waqf become an innovation for economic sustainability, a panacea in solving the humanitarian funding gap, a brand for charity fundraising or humanity causes, and modern scheme to develope waqf assets. There are two kind of sukuk-waqf, i.e. sukuk linked waqf and waqf linked sukuk. In modern Islamic economy, both of them have three functions, i.e. as the investment function, support the velocity of money, and a tool to reach the sustainable development.