The role of Islamic endowments need to be further streamlined and redefined to unlock their true potential, observed experts during a panel discussion on ‘Mobilising Capital from Waqf, Pension Funds and Unit Trusts’ at the the 10th World Islamic Economic Forum (WIEF), organised by the WIEF Foundation and the Dubai Chamber of Commerce & Industry.
Abdullah M. Al Fouzan, Founder and Chairman of The Investor for Securities Company in Saudi Arabia, said “endowments are a sleeping giant, and they are suffering from a state of negligence with annual returns at less than three per cent.” He called for tapping the true potential of endowments through a structured and concerted effort.
Presenting the importance of pension funds and how they can contribute to the GDP, the moderator of the session, Prof. Talal Yassine, Managing Director of Crescent Wealth, Australia, said that while Muslims form 23 per cent of the world population, and global pension funds have assets at over US$27 trillion, Islamic pension funds account for only one per cent of the value.
“There are only three pension funds from the Organisation of Islamic Cooperation (OIC) countries in the top 300 pension funds in the world. Islamic pension funds have a long way to go, but developing them is critical to ensuring that Muslims can live a life of dignity in their old age,” he said.
Prof. Yassine said that the success achieved by Australia with pension funds, which contribute over two per cent to the country’s annual GDP by fees alone, can be replicated in other countries.
Highlighting the role that pension funds can play in driving socio-economic growth, Datuk Shahril Ridza Ridzuan, Chief Executive Officer of the Employees Provident Fund (EPF), Malaysia, said that EPF is today the world’s seventh largest pension fund, growing at about 11 per cent annually. He said that the fund is investing in Shariah compliant businesses globally, and is today has “the world’s largest pool of Shariah compliant assets.”
Dr. Shamsiah Abdul Karim, Deputy Director of Asset Development, Islamic Religious Council of Singapore, explained about the Waqf assets led by the Council, and the social role they play in building mosques and promoting social solidarity.
Thomas Polson, Chief Executive Officer and Co-Founder of Falah Capital, USA, underlined the potential of the global tradability of Islamic Exchange Traded Funds listed in New York, which contribute to higher returns with greater transparency and lower fees.
The panelists were unanimous on the role of Islamic endowments in driving social growth and urged to explore innovative, Shariah complaint ways to further build asset base and value.
The 10th WIEF is being held through October 30, 2014 under the theme ‘Innovative Partnerships for Economic Growth’. With an aim to build on the strong fundamentals of Islamic values as the basis for sustainable economic development and enhance cooperation, WIEF seeks to encourage relations between the private sector and government, the individual and the community, as well as law and regulatory agencies.
For more information, visit the 10th WIEF website: www.10thwief.org