ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP), a corporate legislative and financial regulatory agency, has issued a ‘concept paper’ to revive and modernize ‘waqf’ charitable endowments for Islamic social finance, it said on Monday.
In Islamic tradition, waqf charitable endowments, or religious donations, are made by Muslims for the benefit of the community. Historically, the instrument has funded education, health care and social welfare, supporting institutions like Al-Azhar and the Ottoman public works system.
Waqf remains an important player in the socio-economic fabric of the Muslim world and countries like Malaysia, Turkiye, and Indonesia have successfully adapted it to modern financial systems through regulatory frameworks, innovative governance models, and Shariah-compliant financial instruments.
But in Pakistan, the financial instrument remains underutilized due to outdated management practices and the lack of a robust regulatory framework, according to the SECP, which aims to develop modern and efficient corporate sector, insurance and capital markets in Pakistan.
“The concept paper proposes strategies to harness waqf for Islamic social finance, including reinvigorating the waqf institution, enabling the establishment of waqf in corporate structures as waqf companies, and developing Islamic instruments and financial services products for such companies,” the regulator said.
The proposals aim to improve efficiency, complete the Islamic finance ecosystem, and create social impact in Pakistan, according to the SECP. The suggested pathway to transform waqf into a dynamic, sustainable and impactful institution for socio-economic development will be deliberated and discussed with key industry stakeholders before initiating the required regulatory interventions.
It noted that the concept paper included various options, such as amending provincial waqf laws and other regulations, to provide for waqf companies in order to address concerns pertaining to its jurisdiction and legal considerations.
“It is expected that the revival and modernization of waqf will enable sustainable Islamic social finance institutions, thereby helping achieve the objective of shared prosperity by making resources available for social and welfare projects,” the SECP added.
Pakistan regulator moves to reinvigorate ‘waqf’ charitable endowments for Islamic social finance
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Pakistan regulator moves to reinvigorate ‘waqf’ charitable endowments for Islamic social finance
- In Islamic tradition, waqf charitable endowments, or religious donations, are made by Muslims to benefit the community
- Historically, the instrument has funded education, health care and social welfare, supporting institutions like Al-Azhar
Pakistan’s finance chief says country shifting from aid to trade, investment with Gulf nations
- Aurangzeb says remittances from the GCC topped $38 billion last fiscal year, projected at $42 billion this time
- He tells an international media outlet discussions on a free trade agreement with the GCC are at an advanced stage
ISLAMABAD: Pakistan is no longer seeking aid-based support and is instead pivoting toward trade- and investment-led partnerships, Finance Minister Muhammad Aurangzeb said in an interview with an international media outlet circulated by the finance division on Monday, acknowledging longstanding economic backing from Gulf countries.
Aurangzeb spoke to CNN Business Arabia at a time when Pakistan seeks to consolidate macroeconomic stability after a prolonged crisis marked by soaring inflation, currency pressure and external financing gaps.
Aurangzeb said the government’s economic direction, articulated by Prime Minister Shehbaz Sharif, aims to replace reliance on external assistance with sustainable growth driven by investment and exports, particularly from partners in the Gulf Cooperation Council (GCC), which includes Saudi Arabia, the United Arab Emirates, Qatar, Kuwait, Oman and Bahrain.
“We are not looking for aid flows anymore,” he said. “For us, we are very clear ... that going forward is really trade and investment, which is going to bring sustainability and be win-win for our longstanding bilateral partners in GCC and for Pakistan.”
“This FDI [foreign direct investment] is going to help us in terms of GDP growth [and] more employment opportunities as we go forward,” he continued. “So, you know, all hands are on deck at this point in time to make this materialize.”
Aurangzeb said Pakistan’s shift was underpinned by improving macroeconomic indicators following an 18-month stabilization program.
He noted that inflation, which peaked at 38 percent in 2023, has fallen to single-digit levels, while the country has posted primary fiscal surpluses and kept the current account deficit within targeted limits, adding that foreign exchange reserves now cover about 2.5 months of imports.
The finance chief described recent international assessments as external validation of the government’s reform path.
“All three international credit rating agencies are now aligned in terms of their upgrades and outlook for Pakistan this year,” he said, adding that the successful completion of the second review under the International Monetary Fund’s loan program, approved by the lending agency’s executive board, reinforced confidence in Pakistan’s economic management.
The finance minister said reforms across taxation, energy, state-owned enterprises, public finance and privatization were central to consolidating stability and supporting growth.
He pointed out Pakistan’s tax-to-GDP ratio had risen to about 10.3 percent from 8.8 percent at the start of the reform program and is on track to reach 11 percent, driven by efforts to widen the tax base to include under-taxed sectors such as real estate, agriculture and wholesale and retail trade, while tightening compliance through technology-based monitoring.
Aurangzeb also highlighted the role of the GCC in supporting Pakistan’s external position, particularly through remittances.
He said inflows reached about $38 billion last fiscal year and are projected to rise to nearly $42 billion this time, with more than half originating from GCC states, reflecting the contribution of Pakistani nationals working in the region.
The finance chief said Pakistan was actively engaging Gulf partners to attract investment in sectors including energy, oil and gas, mining, artificial intelligence, digital infrastructure, pharmaceuticals and agriculture, while discussions on a free trade agreement with the GCC were at an advanced stage.
