Structuring the Architecture of Indonesia's Islamic Economy Law
When I wrote several months ago titled “From Partial Regulation to Umbrella Law: The Urgency of an Islamic Economy Bill for Indonesia”, my primary focus was to explain why this nation requires a comprehensive umbrella law capable of unifying the “islands” of Islamic economic regulation into a single integrated landscape.
I highlighted that our current regulations remain scattered, coordination between institutions is frequently disrupted, whilst Indonesia’s ambition to become the world’s Islamic economy centre is firmly embedded in the Long-Term National Development Plan (RPJPN) and Medium-Term National Development Plan (RPJMN). Within this framework, the Islamic Economy Bill serves as the “umbrella law” required so that potential which has thus far developed in fragmented fashion can move in one direction of national development.
The article you are now reading is intended as a continuation of that conversation. If the first article asserted the urgency of presenting an Islamic Economy Bill, then this second piece attempts to descend one level more concretely: no longer simply “necessary or not”, but rather “what exactly must be regulated and how should the broad framework be structured”.
To accomplish this, I employ Hans Kelsen’s Stufenbau perspective: viewing the Islamic Economy Law not as a stack of provisions, but as a layered structure grounded in Pancasila and the 1945 Constitution at its apex, continuing with the RPJPN as an expression of the state’s long-term commitment to place Islamic economy as an inseparable part of the national development agenda.
From that layering, regulation then takes more concrete form: managing the halal and Islamic finance ecosystem, organising institutional structures, formulating policy instruments, and building oversight mechanisms at the operational level so that all layers of the legal structure move harmoniously in one direction.
Over recent years, discussion of the Islamic Economy Bill has begun to “come alive” in many public spaces, including academic forums, focused group discussions, and various webinars. For instance, UI’s Islamic Economy and Business Studies Centre held a webinar on 25 February that featured discussion about the urgency of this bill and openly encouraged Parliament and the Government to give it more serious attention and prioritise its discussion.
That series of conversations conveyed the same message: the Islamic Economy Bill is no longer viewed as normative discourse, but as a genuine need of business actors, regulators, and society. Nevertheless, the resonance of that discussion remains louder on campuses, in communities, and in media than in spaces of national decision-making.
This bill is indeed already listed in the medium-term legislative programme, but has not yet broken through onto the annual priority legislative programme list, meaning the energy of public discourse has not yet fully met with legislative commitment at the state level.
It is amidst this situation that one question repeats itself like a refrain: how broad should the scope of this law actually be? Is it sufficient to add some technical provisions on top of existing regulation, or do we need to build a new, more comprehensive framework?
This question marks an important shift: discussion about the Islamic Economy Bill has surpassed the debate of “necessary or not”, and has begun entering more substantive territory—namely, how this law should be designed so that it truly merits the role of umbrella law within the national legal system.