Waqf and Privatization

Literally, waqf is the transfer of ownership from the private to the public. Vice versa, the privatization is the transfer of ownership from the public (state-owned) to the private. The first comes out from the religious purposes, and the second comes out from the market mechanism. Albeit, it is not fair to compare  the two since it cannot be categorized as apple to apple. However, for  a starting point of intellectual exercise it is useful to highlight the concept of the two.

Waqf is used in Islam in the meaning of holding certain property and preserving it for the benefit of certain philanthropy and prohibiting any use or disposition of it outside that specific objective (Monzer Kahf). The tradition of waqf institution in Islamic history enriched the history of Islamic economics itself. It has a beautiful role to preserve and protect the wealth that prescribed as one of the five dharuroh(s) (khomsatut dharuroh) of maqoshid as Syariah. The main purposes of waqf are to preserve the public interest by transforming the wealth of an individual to meet the need of specific objectives that can enhance the society in general. Hence, it is part of justice principles in Islam.

Privatization was founded by capitalism industry with its market mechanism jargon. It has widely recognized as an instrument to strengthen the foundation of a market mechanism in the capitalistic economic system. By definition, privatization is the transfer of enterprise ownership – in whole or in part – from the state to private hands. Fundamentally, privatization is much more than financial or managerial actions; it is a philosophical position concerning the roles and the relationships of society’s private institutions and government. Some scholars define privatization as the act of reducing the role of government or increasing the role of the private institutions of society in satisfying people’s needs; it means relying more on the private sector and less on government.

To be continued..