The recent change in leadership at the Ministry of Finance is not\nmerely a routine bureaucratic rotation, but a crucial moment determining\nthe economic direction of Indonesia under the new administration. Amidst\nthis transition period, the new fiscal navigator is immediately faced\nwith an illusion that often seduces many developing nations: an\nexcessive sense of security when observing economic growth figures.<\/p>\n
World Bank data notes that in 2025, the Indonesian economy was able\nto grow by 5.1 per cent, with Gross Domestic Product (GDP) reaching 1.45\ntrillion USD and per capita income at 5,059.6 USD. These figures are\nindeed worthy of appreciation and provide technocratic comfort. However,\nin the science of development economics, comfort is the primary enemy of\nprogress.<\/p>\n
For the new Minister of Finance, the greatest challenge ahead is no\nlonger just keeping the old engine running, but how to replace that\nengine so that the vehicle named Indonesia can accelerate upwards to\nbecome a high-income nation.<\/p>\n
Before our eyes, the chasm known as the middle income trap lies wide\nopen. World economic history records that many countries have\nsuccessfully escaped extreme poverty, stepped forward as middle-income\nnations, and then suddenly ran out of breath. Why? Because they failed\nto undergo transformation. They continued to rely on old recipes:\nmassive domestic consumption, cheap labour, the extraction of raw\ncommodities, and low-cost oriented investment.<\/p>\n
Indonesia currently stands at this critical crossroads. We need a new\ngrowth engine. The question is, where will that engine come from? The\nanswer lies in a giant that has been stirring for some time but is often\nmisunderstood: the Sharia Economy and Finance (Eksyar).<\/p>\n
This is not merely an empty claim. Referring to 2025 data from the\nFinancial Services Authority (OJK), our total Sharia financial assets\nhave breached the Rp3,131.02 trillion mark, growing convincingly by 8.56\nper cent year-on-year. However, interestingly, the market share only\nreached 11.47 per cent as of June 2025. This means the space to make it\na primary lever for the national economy remains very vast.<\/p>\n
New Paradigm: Sharia Economy is Not Merely a Religious Agenda<\/p>\n
The greatest mistake some people make in viewing the Sharia economy\nis placing it in a corner as an exclusive sector\u2014as if it were merely a\nmatter of religious worship. From an institutional perspective, the\nSharia economy is essentially a policy framework that encourages\nfinancing based on the real sector, stimulates entrepreneurship through\nrisk-sharing, ensures equitable ownership, and prevents economic\nexploitation.<\/p>\n
Are these values not identical to the prerequisites for a country to\nescape the middle income trap? Countries that successfully move up the\nladder are always driven by high-value-added industries, a resilient\nmiddle class, financing systems pro-productive sectors, and high-quality\nhuman resources.<\/p>\n
Policy Orchestration and the Urgency of BPES<\/p>\n
The Sharia economy has great potential to inject fresh blood into the\nhalal industry and boost exports. However, this engine worth more than\nthree thousand trillion rupiah requires a skilled conductor. If Sharia\neconomic matters are merely handed over in a fragmented manner to\nsectoral institutions, the impact will be very marginal.<\/p>\n
This is where the urgency lies in accelerating the transformation of\nthe National Committee for Sharia Economic and Finance (KNEKS) into the\nSharia Economic Development Agency (BPES) so that it can take on the\nrole of the main orchestrator. Through the presence of BPES, the\norchestration of Sharia economic policy will have a much firmer\nexecution footing. In this ecosystem, the Ministry of Finance continues\nto hold a strategic position as the provider of fiscal levers, aligning\nthe State Budget (APBN) with the designs directed by BPES.<\/p>\n
Transforming KNEKS into BPES is an urgent task. This step will not\nonly plug the gap of policy fragmentation but also serve as a golden\nmomentum for President Prabowo to fulfil his political promise to\nadvance a people-based economy based on Sharia principles.<\/p>\n
Five Structural Strategies to Drive the Sharia Economy<\/p>\n
To make the Sharia economy a lever to escape the middle income trap,\nthere are five structural strategies that must be the main focus:<\/p>\n
We have extraordinary capital. The State of the Global Islamic\nEconomy (SGIE) 2024\/2025 report ranks Indonesia 3rd in the world in the\nGlobal Islamic Economy Indicator. On the other hand, we face a paradox.\nAs the country with the largest Muslim population, we often remain an\n\u201centicing market\u201d rather than a \u201cproducing factory\u201d. Halal certification\nalone is not enough. We need a Halal Industrial Ecosystem. The Ministry\nof Finance must design fiscal incentives that connect farmers,\nprocessing MSMEs, Sharia financing, to global export routes.<\/p>\n
Our MSMEs are often trapped in the informal sector with low\nproductivity. Conventional banking is often reluctant to approach them\ndue to the cost of funds and collateral regulations. This is where\nmudharabah and musyarakah instruments must take centre stage. Sharia\nbanks must evolve into venture builders\u2014partners who not only inject\ncapital but also share risks and accompany MSMEs into the supply chains\nof large industries.<\/p>\n
The narrative of the use of philanthropic funds (zakat, alms,\ncharity, waqf) must be radically changed from \u201ccharitable aid\u201d to\n\u201cproductive social investment\u201d. Zakat funds should be prioritised for\nworking capital and high-tech training. The priority allocation of waqf\nshould be shifted towards high-economic-value productive assets, such as\nhospitals, vocational schools, and innovation centres.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/escaping-the-middle-income-trap-1789639500", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }