Reconceptualizing Productive Waqf as a Catalyst for Inclusive Islamic Urban Economic Development

Abstract

This study aims to reconceptualize productive waqf as a strategic catalyst for inclusive Islamic urban economic development by integrating ethical, institutional, and developmental perspectives. Employing a qualitative approach, the research adopts a case study design to enable an in-depth and contextual exploration of waqf practices within real urban economic settings, as this design is particularly suitable for capturing complex socio-institutional dynamics. The study is conducted in major urban areas of Indonesia, including Jakarta and its surrounding metropolitan regions, selected due to their high waqf potential and pronounced urban inequality challenges. Data are collected from twelve purposively selected informants, comprising waqf managers, policymakers, Islamic finance experts, and urban development practitioners, chosen based on their expertise and direct involvement in waqf-related activities. The findings reveal that productive waqf remains underutilized due to governance limitations, fragmented institutional coordination, and weak integration with urban economic policies, despite its strong potential to enhance social welfare and economic inclusion. The study concludes that strengthening institutional frameworks, aligning waqf management with maqasid al-shariah principles, and fostering innovation through digital and financial instruments are essential. It recommends policy reform, stakeholder collaboration, and empirical expansion to optimize waqf’s role in sustainable urban development.