Islamic Finance Instrument is Part of Indonesia’s Economy

Nusa Dua, InfoPublik – Finance Minister Sri Mulyani Indrawati shared Indonesia’s experience in optimizing the role of Islamic finance instrument in her keynote speech at Mainstreaming Islamic Finance into Global Initiatives seminar at the 2018 Annual Meetings of the International Monetary Fund (IMF) and World Bank Group at BICC, Sunday (14/10).

In Indonesia, Islamic finance instrument has become an important part of the national development. She added that retail sharia bonds tail (sukuk), for example, is currently the government’s most important instrument, one of which to develop sharia finance.

In the global context in which the global economic condition is still uncertain, the role of Islamic finance is increasingly important.

“To answer to the global challenges, Islamic financial industry offers big opportunities to achieve the millennium development goals. This is relevant with the programs launched by the World Bank, which is the Sustainable Development Goals (SDGs),” Sri Mulyani said.

The Minister added that Indonesia does not only focus on developing commercial Islamic financial industries, but also on social financial industry.

“This is an effective instrument to reduce poverty and inequality by meeting the basic needs of the people, empowering low-income people, and opening access to the business world," Sri Mulyani said.
Therefore, Sri Mulyani added, Indonesia through central bank Bank Indonesia (BI), in collaboration with the Islamic Development Bank (IDB), is developing Zakat Core Principles and Waqf Core Principles.

“Integration between sukuk and waqf is an attractive innovation in Islamic finance,” the Minister said, adding that sukuk has the potential as an instrument to mobilize funds, while waqf has the capacity to gain productive income and financial activities.

“Therefore, collaboration between sukuk and waqf can become an innovation in providing low cost financing to implement sustainable economy,” the Minister said. (Ismadi Amrin/Gusti Andry/Translator: Ersan)