Rebuilding Waqf Institution for Socio‑Economic Development in Pakistan
By Dr. Ali Salman
Let’s begin with a simple but powerful idea:
Waqf was never meant to be just charity
Historically, it was the backbone of a self‑sustaining, civil, and private social order—one that powered education, healthcare, and community welfare across the Muslim world for centuries. Today, my argument is straightforward: if we want real socio‑economic transformation, we must rebuild Waqf as an institution of social capital, not as an arm of the state. This is what has been done in many countries, especially in Türkiye, Indonesia, and Malaysia.
At the heart of this discussion is the concept of social capital, or what my friend Maszlee Malik calls ihsani capital—capital rooted in the Islamic value of Ihsaan. A virtuous society is not one where citizens are endlessly dependent on the state, but one where individuals are economically and politically independent, yet socially interdependent. This is the essence of a “big society”: strong communities, trusted institutions, and voluntary cooperation. Waqf was historically the most powerful instrument for building this kind of society.
For most of Islamic history, up until barely a hundred years ago, Waqf functioned as a perpetual, private, and civil institution, free from state control. It financed schools, hospitals, water systems, and social services on a sustainable basis. It worked precisely because it was shielded from political interference. Unfortunately, this changed. First under colonial administrations, and later under so‑called independent nation‑states, Waqf was gradually taken over by the state. And when that happened, the institution lost its soul. The vibrant social institution of Waqf, quite frankly, died in the hands of the state.
But—and this is crucial—resurrection is possible. Waqf can be revived, but only if we begin with serious legal reform. The starting point must be clear: the state must be taken out of the laws that govern Waqf. Regulation is not the same as control, and oversight is not the same as ownership. If we fail to understand this distinction, Waqf will remain trapped in bureaucratic paralysis.
Let me illustrate this with a concrete example: the Islamabad Capital Territory Waqf Properties Act, 2020. The Act defines Waqf property appropriately—as property permanently dedicated for religious, pious, or charitable purposes—and claims to ensure proper management, transparency, and protection against misuse, including compliance with anti‑money laundering and counter‑terrorist financing measures. On paper, this sounds reasonable. But in practice, the appointment of a serving BPS‑19 Chief Administrator of Waqf with authority to appoint managers of Waqf properties clearly demonstrates how deeply the state controls Waqf management. This is not empowerment of society; this is administrative takeover.
There is, however, a potentially promising development. The Securities and Exchange Commission of Pakistan has proposed amendments to the Companies Act, 2017, introducing the concept of Waqf management companies. These not‑for‑profit entities would be licensed and regulated under a dedicated framework, mandated to manage Waqf assets strictly in accordance with Shariah and the stated objectives of the Waqf. This proposal, if designed carefully, could represent a shift away from direct state control toward professional, accountable, and mission‑driven management. The opportunity here is significant—but only if independence is genuinely protected. However, as Waqf is a provincial subject, it is difficult to imagine the application of this proposal, even if implemented, across the country.
Now, let us consider why this matters so urgently, especially in Pakistan.
According to the Giving in Pakistan Report 2025, faith‑based giving and deep compassion for those in need run through every neighborhood and community in the country. Pakistan ranks 17th out of 101 countries in overall generosity. Pakistanis give on a massive scale: Rs. 770 billion annually. Yet more than half of this generosity is direct, informal giving to individuals, while only a portion flows through institutions. The institutionalized charity market alone is around Rs. 362 billion.
Now imagine the implications if Waqf were allowed to function properly as a trusted, independent institution. If this institutional giving were strategically allocated—say, toward education—at a cost of Rs. 45,000 per child per year (as estimated by The Citizens Foundation), Pakistan could bring 8 million children into schools every year and close the education gap within just three years. This is not fantasy. This is arithmetic. In other words, we need roughly $1.29 billion—already being given by society, just not being organized effectively.
So, the conclusion is unavoidable.
Pakistan does not suffer from a lack of generosity. It suffers from a lack of trust in civil institutions—and that distrust is largely the result of excessive state control. If we truly want Waqf to drive socio‑economic development, we must revamp Waqf laws, remove the state from direct control, and trust society to deliver. When society is trusted, it responds. When institutions are free, they innovate. And when Waqf is restored to its rightful place, it can once again become a pillar of sustainable development.