Towards the Summit: The Journey of Indonesia’s Sharia Economy from SGIE 2022 to 2023

Jumat (22/12/2023), Vice Presidential candidate debate, Gibran Rakabuming sharply questioned Muhaimin Iskandar or Cak Imin about the State of the Global Islamic Economy (SGIE). This question created tension and sparked curiosity among the audience about a sharp and clear response from Cak Imin. So, what is SGIE actually?

What is SGIE?

As quoted in Bisnis.Com, “SGIE is an annual report that depicts the condition of the halal economy worldwide, compiled and published by Dinar Standard, a strategic growth research and management execution company focusing on government innovation, global halal and ethical economics, as well as social impact.”

“Success in the SGIE domain in Indonesia can serve as a trigger supporting an increase in rankings. Indonesia’s potential to elevate its position in the rankings appears higher with a positive SGIE condition, reflecting stability and growth in the halal economy. This was evidenced at the 5th Annual Islamic Finance Conference (AIFC), stating that “In 2022, Indonesia occupied the 4th position in the SGIE report. However, in 2023, Indonesia successfully rose to the 3rd position, standing after Malaysia and Saudi Arabia.”

Comparison of Indonesia’s Rankings by Category from 2022 to 2023 in the SGIE Report

It can be observed in the comparison of Indonesia’s positions based on the SGIE report categories from 2022 to 2023, namely, “The halal food sector maintains its 2nd position, and the fashion and style category holds the 3rd position from 2022 to 2023. Additionally, the media and recreation sector was not present in 2022 but managed to reach the 6th position in 2023. There was a significant improvement in the pharmaceutical and cosmetic sector, moving from the 8th position in 2022 to the 5th position in 2023. Meanwhile, the Indonesian Islamic finance sector experienced a decline from the 6th position in 2022 to the 7th position in 2023,’ as reported in SGIE’s 9th edition by Bisnis.Com.”

What is the Significance of Islamic Economy for Indonesia?

SGIE has a significant impact on the global economy, as reported by Bisnis.Com, “The growth of the Muslim population and interest in products and services based on Sharia principles are the main drivers of SGIE’s role. This opens up opportunities for majority-Muslim countries to expand their economic markets, particularly in halal products, Islamic finance, and halal tourism. The benefits include reducing unemployment, increasing community income, and strengthening economic growth. SGIE also has a positive impact on businesses worldwide, promoting inclusive and sustainable products and services. The understanding of Islamic economic principles by entrepreneurs creates broader market opportunities and positive partnerships, advocating for global economic stability and justice by reducing social and economic disparities between countries and communities.”

Islamic Finance in Indonesia

“Despite Indonesia experiencing an overall improvement in SGIE rankings in 2023, its Sharia finance ranking declined from 6th to 7th. Sharia finance is considered a crucial element in supporting economic recovery due to its involvement in fair risk financing mechanisms and social contributions such as zakat, wakaf, and infaq. Therefore, it is essential for Indonesia to carefully monitor the development of Sharia finance in 2024 to ensure its positive impact on the economy and societal well-being. Indonesia’s potential as a key player in the global Islamic economy and finance can be realized through dedicated efforts, collaboration, and strong commitment from all involved parties,” wrote Bisnis.Com. (PI)