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Thursday, 01 July 2021 00:00

Sharia Economy and Finance Encourage Economic Recovery and Growth Post-pandemic

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Some countries, including Indonesia are facing an economic crisis caused by the Covid-19 pandemic. To survive, contributions from all sectors, including sharia economy and finance are necessary in accelerating the national economic recovery. This means sharia economy and finance can be an alternative.

On Tuesday (29/6), Minister of Finance, Sri Mulyani Indrawati said that sharia economy and finance are not only to accelerate economic recovery but also to support a just and sustainable Indonesian economic growth.

The development of the sharia economy and finance in Indonesia was appreciated by the world. Refinitiv Islamic Finance Development Report 2020 placed Indonesia as the world's 2nd of the Most Developed Countries in Islamic Finance. Meanwhile, Global Islamic Economy Indicator 2020/2021 placed Indonesia as the world's top 4th for sharia economy and 6th for sharia finance.

The world's recognition gave Indonesia great confidence. Indonesian sharia economy and finance will increase further.

This great confidence was supported by the big potential that Indonesia possesses to develop the sharia economy and finance. This potential is shown by several things.

First, Indonesia has 230 million Muslim population. Then, based on the data from Financial Services Authority (OJK) in 2020, the sharia finance industry asset growth was 21.48% into 1,770.32 trillion rupiahs. This is a significant growth and it can be greater if the Muslim population is actively involved in the sharia finance industry.

Second, still from OJK, in 20129, the sharia economic growth was 5.72%. Third, Indonesian halal industry is also improving. In 2020, Indonesian halal industry trade value such as food, cosmetics, medicine, travel, and fashion reached US$3 billion dollars.

To optimize these potentials, it needs innovation and creativity of sharia financial services industry players. Then, technology adoption needs to also go further to follow the ever fast and dynamic developments. Lastly, it will require some skilled and expert human resources in sharia economy and finance to follow all economic and technological dynamics.

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