Questioning the SGIE Ranking
The Islamic Economy Forum (MES) has a grand vision to help drive Indonesia towards becoming a global leader in the Islamic economy. However, the challenges are real. In the State of the Global Islamic Economy (SGIE) Report 2025/2026, published in June 2026, Indonesia fell one position in the Global Islamic Economy Indicator (GIEI), ranking fourth.
A fourth-place ranking is certainly not a bad result. However, for a country with the world’s largest Muslim population, a massive domestic market, millions of MSMEs, growing Sharia finance, an extensive food and beverage industry, and a vast network of pesantren, mosques, and Islamic social institutions, this position warrants evaluation. The question is not merely how to rise from fourth to first, but whether the SGable SGIE ranking truly reflects the full strength of Indonesia’s Islamic economy.
The answer is no; the SGIE is not a measure of Sharia GDP. The SGIE describes the strength of the Islamic economic ecosystem through halal food, Sharia finance, Muslim-friendly tourism, modest fashion, halal pharmaceuticals and cosmetics, media, and recreation, alongside regulatory, innovation, and supporting aspects. Sharia GDP is different: it measures the added value of halal and Sharia economic activities to the national economy.
However, the two are linked. A stronger ecosystem should result in increased production, investment, trade, exports, and employment. All of this ultimately generates added value and contributes to the GDP. Thus, the SGIE shows the competitiveness of the ecosystem, while Sharia GDP shows the economic outcome.
Large Scale, but Not Yet Integrated
This is where Indonesia differs from Malaysia, Saudi Arabia, the UAE, and Bahrain. Malaysia possesses a relatively integrated ecosystem of Sharia finance, sukuk, certification, and the halal industry. Saudi Arabia is strong in Sharia finance, investment, and the Hajj and Umrah ecosystem. The UAE combines the strengths of finance, trade, logistics, and international tourism. Bahrain has long been known as a Sharia finance hub.
These countries possess an advantage: their Sharia economic activities are relatively easy to recognise, regulate, measure, and document.
Indonesia is different. Farmers produce halal food, fishermen produce fish, millions of MSMEs produce food and beverages, and the textile industry produces clothing. Substantively, these activities are halal, but not all are certified, connected to Sharia financing, or recorded as part of the halal industry. Consequently, the true scale of the substantively halal economy is not yet fully visible as an Islamic economic strength.
The issue of certification must also be viewed carefully. Based on BPJPH figures, approximately 24 million out of 64 million products in Indonesia are halal-certified, or about 37.5 per cent. However, comparable figures are unavailable for Malaysia, Brunei, Saudi Arabia, Bahrain, the UAE, Egypt, and Kuwait. It is possible the SGIE assumes that all goods and services circulating in Middle Eastern Islamic countries are automatically halal.
International certification systems indeed differ. Therefore, the number of certificates cannot be directly compared without knowing the scope, certification mandates, and the number of products being compared.
More importantly, Indonesia must not fall into the trap of merely chasing the number of certificates. Halal certification is an instrument, not the end goal. Once a certificate is obtained, does the MSME’s turnover increase? Do they obtain financing? Do their products enter modern retail and export markets? Do they create jobs?
If not, new certification only produces documents, not added value. Therefore, the measure of success needs to shift from the number of certificates to the economic impact following certification: turnover, investment, financing, exports, and labour.
A more fundamental challenge lies in Sharia finance. Indonesia has Sharia banks, BPRS, Sharia insurance, sukuk, Sharia capital markets, fintech, BMT, zakat, and waqf. On the other side, there is the halal industry and millions of MSMEs. However, the strength of the financial and real sectors still too often operates in isolation. There must be a consolidation of Sharia finance.
The design must be professional, transparent, and prudent. Sharia compliance must be part of governance, not just a label. There must be a clear business case: how much capital is consolidated, where investments are directed, how much additional investment and financing is generated, and how much added value and employment is created.
Consolidation must not stop at the financial sector. Indonesia needs to move from being a consumer to a producer, from a producer to an exporter, and from an exporter to a global brand owner.
SGIE and Sharia GDP Must Go Hand in Hand
Indonesia currently knows more about its SGIE ranking than it does about the precise contribution of the Islamic economy to its GDP. This must be rectified.
BPS, together with KNEKS, Bank Indonesia, OJK, and related institutions, need to begin developing a Sharia Economic Satellite Account. There is no need to create a new GDP. What is required is to map the added value of the halal and Sharia economy that is currently scattered across various sectors of the national GDP.
Indonesia would finally have two complementary measures: the SGIE measures Indonesia’s position and competitiveness in the world, while Sharia GDP measures the contribution of the Islamic economy domestically.
If the SGIE ranking increases but investment, exports, jobs, and the contribution to GDP do not increase, we must be brave enough to say that the progress is not substantive.
Indonesia also needs to communicate more actively with DinarStandard, the compiler of the SGIE. This is not to request a higher ranking or a transparent, academic, and unbiased methodology for Indonesia. It is not to ask for a higher score; merely for insight. MES can organise an Indonesia-DinarStandard Annual Review every time the SGIE is due for publication. We can request a country scorecard: indicators that…