Optimizing Waqf for Macroeconomic Stability in Indonesia: Fiscal, Financial, and Institutional Perspectives

Abstract

This study explores the macroeconomic potential of waqf in Indonesia, focusing on its fiscal, financial, and institutional dimensions. As a prominent Islamic philanthropic instrument, waqf has historically supported social welfare but remains underutilized in national economic planning. Using qualitative methods and document analysis, this study examines how waqf contributes to fiscal redistribution, enhances financial system resilience, and requires institutional reform to function effectively at the macroeconomic level. Findings reveal that waqf can supplement government expenditures, provide risk-sharing financial alternatives, and promote inclusive growth. Waqf-based financial instruments, including cash waqf and waqf-linked sukuk, have shown promise in enhancing financial inclusion and reducing systemic vulnerabilities. However, regulatory fragmentation, lack of professional governance, and insufficient integration with public policy remain significant obstacles. The study concludes that waqf can play a vital role in Indonesia’s macroeconomic stability if embedded within a cohesive legal and institutional framework. The research contributes to Islamic economic thought and public finance by proposing an integrative model that situates waqf within broader macroeconomic strategies, offering novel pathways for sustainable and inclusive development.