Gov’t to Foster Development of Sharia Economy and Finance

By : Nata Kesuma | Thursday, July 29 2021 - 21:00 IWST

Vice President of Indonesia Ma’ruf Amin (Photo by: Presidential Secretariat)
Vice President of Indonesia Ma’ruf Amin (Photo by: Presidential Secretariat) - Indonesia is a country with the largest Muslim population that has potential to become the world’s largest halal producer. However, the potential has not yet been optimally utilized. Indonesia still has to import to meet the needs of domestic halal food.

For the record, Indonesia spent US$ 173 billion or 12.6 percent of the world’s halal food products market in 2018. It is recorded that Indonesia became the largest consumer compared to other Muslim-majority countries.

“Therefore, the Government will continue to foster the development of sharia economy and finance,” Vice President of Indonesia Ma’ruf Amin said on Wednesday (28/7).

On that occasion, the Vice President said there are four points of strategies and challenges to develop sharia economy and finance in the country, as follows.

First, the development of halal industry. It aims to establish halal industrial areas as well as halal zones within industrial areas.

Currently, three halal industry areas are being developed, including Modern Cikande Industrial Estate in Serang, Banten province, SAFE ‘n’ LOCK Halal Industrial Park in Sidoarjo, East Java province, and Bintan Inti Halal Hub in Bintan, Riau Islands province.

In addition to the development of halal industry, the Government also facilitates Micro, Small & Medium Enterprises (MSMEs) to obtain licensing and coaching, small business partnership programs with large businesses, halal certification in accordance with the standards from the Halal Product Assurance Agency and the Indonesian Ulema Council.

Second, the development of sharia financial industry. It aims to build a resilient and modern financial system as an industry and trade support. One of the examples is that the Government has merged three state-owned sharia banks, namely Bank Syariah Mandiri, BRI Syariah, and BNI Syariah into Bank Syariah Indonesia (BSI).

This merger is expected to not only reach huge businesses, but also MSMEs. Moreover, the Government also fostered the development of micro-scale financial institution, including Micro Waqf Bank (BWM), Baitul Maal wa Tamwil (BMT), Sharia Micro Financial Institution (LKMS), and sharia cooperatives.

Third, the development of sharia social funds, one of which is through waqf transformation.

“We are more familiar with alms, infaq, and donations as well as waqf for mosques, Islamic schools, and cemeteries. I hope, waqf assets can become moving assets, including stocks, securities, sharia deposits, funds secured in waqf accounts,” the Vice President added.

The Government, along with the Indonesian Waqf Agency and the National Committee of Sharia Economy and Finance, will continue to improve the betterment of the governance of waqf institutions so that it will increase public trust in waqf.

Fourth, the development and expansion of sharia business activities. It aims to improve community’s economy. One of the efforts carried out by the Government is to build incubation centers and sharia business centers in several regions all over Indonesia.

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