Indonesia Urged to Accelerate Sharia Economy Innovation

Indonesia has fallen out of the top five in the State of the Global Islamic Economy (SGIE) Report 2025/2026 for the indicators of sharia finance and Muslim-friendly tourism. This development signals that accelerating policy innovation and strengthening the ecosystem must be undertaken immediately so that Indonesia does not fall behind other countries that are moving more aggressively. In the sharia finance sector, the biggest challenge remains the low utilisation of services. Bank Indonesia data shows the sharia economic literacy index soared from 16.3% in 2019 to 50.18% in 2025. Sharia financial literacy also increased from 9.14% to 43.42%. Unfortunately, this rise in knowledge has not been followed by a significant increase in inclusion, which only reached 13.41% in 2025. Economists assess that the sharia finance market share, which is still around 11%, needs to be pushed to 15%–20% in order to become the foundation for developing the national halal industry. Strengthening sharia financing is considered important to support MSMEs, halal product exports, and investment, so that Indonesia is not only the largest consumer of halal products but also a global sharia financial centre. Homework is also evident in the Muslim-friendly tourism sector. Although Indonesia remains one of the world’s favourite destinations for Muslim travellers, a number of countries such as Malaysia, Saudi Arabia, Turkey, and even Japan and Thailand continue to accelerate promotion, infrastructure development, marketing digitalisation, and the provision of more integrated services. On the other hand, Indonesia still faces challenges regarding connectivity, halal certification, and public understanding of the Muslim-friendly tourism concept.