In July, Prime Minister Datuk Seri Anwar Ibrahim unveiled the Madani Economic Plan as a vehicle to restore Malaysia’s status and dignity through economic restructuring, with the aim of becoming an economic leader in Southeast Asia.
The economic plan has two two-pronged approaches, namely ‘raising the ceiling’ as Asia’s leading economy, and ‘raising the floor’ to improve efforts to raise people’s living standards.
Essentially, the Madani economy emphasises the need to revamp the country’s economic structure through seven priority areas.
Among the seven priority areas outlined in the framework, two areas stand out for simultaneous integration: ‘Leader of the Global Islamic Economy’ and ‘Green Growth for Climate Resilience’.
Anwar, in his address, first commended the Malaysian Islamic financial system as a global leader in Islamic finance. He spotlighted the triumph of the Islamic banking sector, commanding an imposing 44.5 per cent stake in total financing (RM974.1 billion), and underscored the instrumental role of the Islamic capital market, constituting 64.3 per cent of the Malaysian capital market (equivalent to RM2,322 billion).
However, Anwar issued a fervent call for Islamic finance entities to embrace sustainable and impactful initiatives. This pivotal sector must galvanise efforts to synergise Islamic financial principles with ecologically responsible and sustainable investments.
Significantly, this harmonious trajectory aligns seamlessly with the recently inaugurated Phase 1 of the National Energy Transition Roadmap (NETR).
In the Quran, Surah Al-Fajr (verses 11-14) emphasises the need to protect the environment and the way of life that Allah SWT has created on this earth through the proper use of natural resources, while the Prophet Muhammad SAW, in a Musnad Ahmad hadith, mentioned that people will be rewarded for their efforts to be greener, and thus, every Muslim is obliged to contribute to these efforts.
Hence, the onus lies on all stakeholders, including those in the Islamic finance arena, to embrace their roles as stewards of environmental sustainability.
At the heart of Malaysia’s ecological resilience strategy, the concept of waqf emerges as a potent instrument. Rooted in selflessness, waqf entails the dedication of assets for the communal good. It embodies an indivisible commitment to channel one’s property, solely for the pleasure of Allah SWT, irreversibly enriching society.
Within the context of climate resilience, the green waqf emerges as a catalytic Islamic financial instrument. Notably, green waqf, such as forest, water, and solar energy, already exists, reflecting the rich tradition of endowing natural resources for collective benefit.
This tradition has historical roots, exemplified by Prophet Muhammad SAW’s donation of land and resources to construct essential community structures in Medina. A living testament endures in the form of the Rummah Well, a more than 1,400-year-old waqf by Saidina Uthman bin ‘Affan RA, addressing the water scarcity in Medina.
Modern examples abound, such as the joint water waqf initiative of the Yayasan Waqaf Malaysia and the Ministry of Natural Resources, Environment and Climate Change. This initiative channels waqf funds into water supply projects, extending support to well-pumping, maintenance, and the restoration of rural water supply systems – a contemporary embodiment of this timeless concept.
Equally compelling is the surge of solar waqf adoption, exemplified by the Permatang Tok Mahat Mosque in Nibong Tebal, Penang. Embracing this ethos, the mosque’s installation of solar panels has yielded significant monthly savings of around RM500 in electricity costs.
A burgeoning trend sees nearly 20 mosques equipped with solar panels, while an ambitious vision by MAIPP strives to equip 200 to 350 mosques within Penang via the same modus operandi. In financial terms, a 12kW solar panel system, costing approximately RM50,000, boasts a lifespan of 25 years.
Beyond the immediate monetary savings, they emit a profound message of ecological responsibility, demonstrating that even within the sphere of religious practice, it is possible to align with the principles of environmental stewardship. As these solar-powered mosques continue to multiply, they usher in a future where the blend of faith and sustainable technology illuminates not just prayer spaces, but also the path toward a greener and more energy-resilient society.
Undoubtedly, Malaysia finds itself confronting a mounting array of climate-induced trials – floods, extreme climatic events, and rising sea levels – each poised to disrupt the societal and economic equilibrium.
Green waqf offers versatile solutions to climate-induced challenges in Malaysia.
Firstly, in the context of floods, green waqf could be harnessed to construct and fortify water management systems. By endowing land, water bodies, or even funds to support flood-resistant infrastructure, communities could develop comprehensive flood-control mechanisms. These systems might include strategically designed drainage networks, flood barriers, and sedimentation basins.
Secondly, the establishment of green spaces through green waqf, such as urban parks, community gardens, and sustainable landscapes, could contribute to rainwater retention and natural flood mitigation. These green spaces not only absorb excess water during heavy rainfall but also provide a buffer against soil erosion.
Lastly, by conserving coastal ecosystems like mangrove forests, green waqf acts as a natural barrier against rising sea levels, safeguarding communities and fostering biodiversity. Furthermore, green waqf funds can be directed toward sustainable coastal development, including the construction of seawalls and embankments, which are designed to mitigate erosion and safeguard communities from the encroaching sea.
These initiatives embody not just a regional bulwark against flooding but also an indomitable stride towards climate resilience, reverberating the profound Islamic ethos of mercy to all creations (raḥmatan lil ’ālamīn).
The writer is a Senior Lecturer at the Department of Finance, Faculty of Business and Economics, Universiti Malaya, and the Secretary of International Council of Islamic Finance Educators (ICIFE).
The views expressed here are the personal opinion of the writer and do not necessarily represent that of Twentytwo13.
