UAE takes initiative on Islamic endowments

The UAE aims to lead the world in the market for awqaf endowments by developing the first multibillion dollar philanthropic business.

Mohammed Al Gergawi says Islamic finance is a force for stability. Reem Mohammed / The National

The UAE aims to lead the world in the market for awqaf – Islamic charitable endowments – by establishing the first global organisation for the administration and development of the multibillion dollar philanthropic business.

Mohammed Al Gergawi, the Minister of State for Cabinet Affairs and the outgoing chairman of the Dubai Islamic Economy Development Centre, announced the initiative at the opening ceremony of the Global Islamic Economy Development Summit.

The Awqaf International Organisation brings together Islamic endowments from 11 countries under a “unified umbrella” in Dubai.

Awqaf is a system in which the return on assets – typically real estate – is used for charitable purposes in Islamic countries. Although there is no global estimate of how much they are worth, some Islamic financial experts have criticised the ­current set-up for leaving assets under-exploited and under ­performing.

Abdulla Al Awar, the chief executive of the Dubai Islamic Economy Centre, said: “The Awqaf International Organisation articulates our efforts to integrate the pillars of the Islamic economy and reinforces the role of endowments and their contribution to social and economic development.

“With the establishment of the organisation, we expect to achieve a positive impact on the lives of communities across the globe – particularly in countries that suffer a weak economic infrastructure and low development indicators.”

Mr Al Gergawi said that Islamic financial assets were growing around the world and that they were a “force for stability”.

He highlighted the three-year record of Dubai since it announced its ambition to be the “capital of the global Islamic economy”. The value of sukuk (Islamic bonds) in Dubai had jumped from Dh26 billion to US$135bn [Dh496bn] in that time, he said, and that other indicators of the Islamic economy had also grown. “The Islamic economy builds happiness and serves communities,” he said.

Philanthropy was the dominant theme of the opening day of the GIES. Tayeb Al Rais, the secretary general of UAE’s Awqaf and Minors Affairs Foundation, told delegates that the concept of charitable giving is a foundation of Islam, but that certain practices were struggling for relevancy in the modern world.

Abdul Aziz Al Ghurair, the chairman of the UAE Banks Federation, said: “We have much to be optimistic about in the Muslim world. We have some of the fastest-growing economies. We have a growing population of dynamic and motivated young people. We have some of the world’s most charitable donors.”

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