Cash Waqf Linked Sukuk for Islamic Social Welfare and National Development: Evidence from Indonesia

Abstract

This article aims to study Indonesia’s experience in issuing Cash Waqf Linked Sukuk (CWLS), the schemes and legality which are meant for Islamic social welfare improvement, and CWLS’ contribution to the national development. It is the development of a conceptual paper that explores and carefully reviews regulations, relevant literature studies, reports, and official documents published on the internet. The findings showed that Indonesia has successfully formulated and issued two instruments for integrating cash waqf with the State Sukuk: the CWLS and Retail CWLS. These instruments involve six state institutions and eight central socio-religious institutions that act as formulation, implementation, and supervision. Both instruments are not only beneficial for Islamic social welfare, but they also contribute to the national development. The authors argue that the innovation of Islamic financial instruments can empower the Islamic social welfare and contribute to the national development. It contributes to the discourse on cash waqf innovations in State Sukuk which studies Indonesia’s experiences. This evidence from Indonesia can be adopted and applied by other countries that have fiscal limitations for the empowerment of Islamic social welfare, and at the same time contribute to the national development.