HILMAN LATIEF

The Development of Islamic Economic Thought in

Indonesia

One of the intriguing challenges in Muslim societies in an era of nation states is the question of whether Islam can provide an adequate welfare system that can meet the needs of society at large.

Muslim thinkers and political activists in Indonesia have also made great efforts and formulated contrasting proposals to translate principles of Islamic faith into a means of promoting public welfare, eradicating poverty and relieving shortages, as well as fostering democracy in the social, economic and political spheres.

Unsteady economic growth in the 1980s, which was not underpinned by an adequate fiscal system or fundamentally strong economy, resulted in an unprecedented economic crisis in 1997, which then caused the fall of the New Order regime in 1998.

The 1997 financial crisis in Southeast Asia had an overwhelming impact on the social and political landscape of Indonesia. At the grassroots level, people suffered more economic hardship than ever, and the number of unemployed, as estimated in some reports, increased considerably.

Islamic economic institutions, such as Islamic banks and Islamic savings and loan cooperatives (Baitul Mal wa al-Tamwil—BMT) could grow, and these institutions provided means for Muslim communities to expand small and medium-sized economic enterprises during and after the financial crisis.

In the Indonesian context, the term utilised to signify an Islamic financial or profit-sharing institution is ‘Bank Syari’ah’ (Shari’a Banks).

As a comparison, in the Malaysian context, Islamic economic institutions emerged alongside the incredible economic growth of the Malaysian economy in the 1980s and 1990s, when the Islamic model of financial institutions played no major role.

Islam and Moral Ekonomi

Syafruddin prawiranegara (1911-1989): Presiden PDRI (1948), dan Gubernur Bank Sentral Indonesia (1951)

“Motif atau Prinsip Ekonomi Diukur Menurut Hukum Islam” (majalah Suara Partai Masyumi,1951)

Ekonomic motif: syariah & ethics .

Syafrudin Prawiranegara Center for Islamic Finance-Unissula

Mecca Declaration: 25-28 January 1981.

The Islamic Worlds and New International Economic Order

Anti domination, anti-eksploitation, atau anti-neo-colonialism

A. M. Saefuddin De-secularisation Studi nilai-nilai

sistem ekonomi Islam (1984)

M. Amin Aziz The rise of BMTAzis has led the Centre

for Small Enterprises Business Incubation (PINBUK), an NGO established by the members of the ICMI that provides assistance through various training and workshops for small-to-medium economic enterprises

Shari’a Bank in Indonesia

No Name of Bank Date of Operation The number of Branch Offices

(2010)1 Bank Mualamat Indonesia May 1, 1992 75 branches offices

51 sub-branch offices2 Bank Syariah Mandiri November 1, 1999 115 branches offices

254 sub-branch offices

3 BNI Syariah April 29, 2000 28 branches offices31 sub-branch offices

4 Bank Mega Syariah August 25, 2004 33 branch offices 319 sub-branch offices

5 Bank Syariah Bukopin December 11, 2008 -6 Bank BRI Syari’ah January 1, 2009 -7 Bank Panin Shari’ah December 1, 2009 -8 Bank Victoria Shari’ah April 1, 2010 5 branch offices

2 sub-branch offices9 BCA Shari’ah April 5, 2010 8 branch offices

20 Shariah Service units

10 Bank Jabar Banten Shari’ah May 6, 2010 21 branch offices 15 sub-branch offices

11 Maybank Shari’ah September 23, 2010 (Malaysian bank)

By 2010, the Muhammadiyah was managing at least 19 banks (Bank Perkreditan Rakyat), 190 BTMs, and 808 cooperatives.

The Rise of New ‘Islamic Capitalism’

The Muslim middle class’ perceptions of the new capitalism.

The revival of Muslims’ discourse on justice, welfare, and Islamic economy.

The spawning of the Muslim economic and social enterprises: Islamic savings and loan cooperatives (BMT-Baitul Mal wa Tamwil); Islamic Banks, and charitable organizations.

Shari’a Bank in Indonesia

In 2010, Bank Syariah Mandiri (BSM) channelled Rp. 15.89 billion of its corporate zakat through its zakat agency (BPZIS Bank Mandiri); allocated to three kinds of programmes: economic development, education and charities with about 21.524 beneficiaries.

Bank Mega Syariah (BMS) in 2010 and 2009 were about more than Rp. 2 billion of 85 billion revenues for each year.

Bank Muamalat Indonesia (BMI), in 2009, zakat fund reached Rp. 34,1 billion, and BMI through its social wing, known as Baitul Mal Muamalat (BMM), provided ‘venture capitals’ for 4,697 participants coming from low income families.

Towards a Universal Economic Justice: the Challenges of ‘Islamic Capitalism’