Sharia Economy becomes a motor for economic growth

Sharia economy should present as a motor for boosting economic growth in Indonesia.

JAKARTA -- Indonesia as a democratic country with the largest Muslim population in the world should naturally be a major player in the development of the global sharia economy. Indonesia should be a model for realizing Islamic modernity and economic progress.

Chancellor of the University of Indonesia (UI) Ari Kuncoro said that the world economy in the future will continue to be challenged as a result of geopolitical conflicts in Europe and the Middle East. Thus, sharia economics can become a motor for domestic economic growth.

Ari explained that all kinds of alternative economic growth engines in this uncertain situation must be utilized as well as possible, including sharia economics.

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According to Ari, this has been proven by the performance of various sharia economic and financial sectors which are growing with a positive trend. Total sharia banking assets reached IDR 831.95 trillion, growing 10.94 percent annually as of September 2023, contributing to a market share reaching 7.27 percent.

Sharia banking Third Party Funds (DPK) reached IDR 637.63 trillion, growing 9.26 percent annually. Apart from that, total financing reached IDR 564.37 trillion, growing 14.66 percent from the same period the previous year.

The Islamic capital market is enjoying significant growth as seen from the number of investors to market capitalization. The Islamic social finance sector does not want to be left out, where there has been an increase in ZISWAF fund collection in at least the last five years.

In the halal industry, the four halal value chain sectors recorded a contribution of up to 25 percent of GDP with a growth rate of 4.3 percent. Almost the same as Indonesia's GDP growth.

This brilliant performance, continued Ari, is inseparable from the government's consistent efforts to realize the vision of the 2019-2024 sharia economic and financial master plan, Indonesia as the world's leading sharia economic center.

To strengthen Indonesia's halal industry, recently the Indonesian Halal Industry Master Plan 2023-2029 was launched by Vice President Ma'ruf Amin. It is hoped that this can become a common basis for the realization of Indonesia as a leading center for halal producers in the world,