Critical assessment on cash waqf-linked sukuk in Indonesia

Purpose: This paper provides a critical assessment of Indonesia’s pioneering initiative in issuing cash waqf-linked sukuk (CWLS), a hybrid government sukuk integrated with Islamic endowment funds (waqf). Focused on addressing urgent health-care and essential expenditures, this study aims to evaluate the features and performance of CWLS sales. Design/methodology/approach: Using a literature review and in-depth interviews, this study comprehensively analyzes CWLS from multiple perspectives. Findings: The research indicates that CWLS effectively mobilizes public funds, benefiting the government by supporting essential needs and enhancing waqf management in Indonesia. Moreover, it significantly improves the quality of life through social projects financed by CWLS returns. Practical implications: The study offers actionable recommendations for enhancing CWLS performance in Indonesia and serves as a suggestion for other governments considering similar financial instruments. Social implications: As a socially oriented financial tool, CWLS emerges as a pivotal strategy for enhancing national waqf management and promoting equitable wealth distribution. Originality/value: This study represents the first critical assessment of CWLS in Indonesia, advancing theory by integrating Islamic finance principles with governmental fiscal policies through innovative sukuk structures. It contributes to the distributive justice theory by demonstrating how CWLS operationalizes fairness and equity in resource allocation.