Wealth for Welfare: The Role of Islamic Social Finance Institutions in Sustainable Human Economic Development

Abstract

Development challenges have been pervasive and are hindering the well-being of humanity globally. Islamic social finance institutions can play a significant role to achieve Sustainable Human Economy (SHE). As demonstrated by the Ottomans, the institution of waqf has a long history of delivering the SHE. When communities fulfil its three pillars, zakāt, waqf and infāq (ṣadaqah, etc.) can support sustainable human economic development. The new global development strategy, which consists of 17 Sustainable Development Goals (SDGs) that must be accomplished by 2030, aims to build a sustainable society that meets the demands of the present generation while preserving the rights of future generations. This requires economic growth that tackles various developmental problems, including illiteracy, unemployment, hunger, malnutrition, and poverty, which are intricate and quickly spreading and pose risks to individual lives and society. Communities are increasingly prone to socioeconomic problems and struggle to handle them effectively. Since its inception in 2015, SDGs prompted nations worldwide to join forces with collective bodies or organisations to achieve socioeconomic sustainability and development by 2030. Islamic Social Finance has recently gained attention among scholars and specialists for its role in promoting financial inclusion and sustainable development. Therefore, this article investigates how Islamic Social Finance can contribute to achieving Sustainable Human Economic Development (SHED) and SDGs. It examines the main principal tools of Islamic Social Finance, namely zakāt, awqāf, and infāq, and their potential in the process. Moreover, this article proposes a new institution, namely Global Cash Waqf (GCF), for realising SHED and SDGs.