The Modern Islamic Economics Paradigm: Moving Beyond Halal-Haram Compliance
By Muhammad Rasyid Ridlo ME, Islamic Economics Academic at the Faculty of Economics and Business, Universitas Muhammadiyah Jakarta, and Vice Secretary of the Waqf Empowerment Council, PWM DKI Jakarta
Islamic economics is an economic system grounded in sharia principles. It is present not merely to enforce religious compliance and avoid prohibitions, but also as a process of creating economic benefit for its practitioners, with the ultimate goal of spreading mercy for all creation (rahmatan lil 'alamin).
The modern paradigm of Islamic economics should not halt at the question of halal-haram compliance. It must also become a genuine choice for society — a means to live healthily and conduct profitable business. In countries that have long championed Islamic economics, such as England, the system is no longer viewed solely as a principle of compliance. Instead, it is oriented towards profitability whilst still respecting Islamic principles without neglecting sharia rules.
Prof Mohammad Nur Rianto Al Arif has emphasised that this paradigm shift carries high urgency — namely, moving from mere shariah compliance to shariah impact, or from the formality of compliance to real social transformation.
One of the principal challenges facing Islamic economics in Indonesia is the gap between high literacy and low inclusion. The 2024 National Survey of Financial Literacy and Inclusion (SNLIK), conducted by the Financial Services Authority (OJK), reveals that Indonesia's Islamic financial literacy index stands at 39.11 per cent, whilst the Islamic financial inclusion index is only 12.88 per cent. This significant disparity indicates that whilst public awareness and knowledge of Islamic financial products is relatively encouraging, actual adoption and usage remain remarkably low.
Despite Indonesia ranking third globally in the State of Global Islamic Economy (SGIE) 2024-2025 report, the country's Islamic economics sector continues to face a range of structural challenges. The sector must move beyond formalistic approaches and instead demonstrate tangible economic and social impact.
Islamic economics, at its core, is not simply a way of conducting economic activities according to Islamic theological principles. It represents a comprehensive framework for creating equitable economic outcomes that benefit all members of society, regardless of faith. The shift from compliance-oriented thinking to impact-oriented action is essential if Indonesia is to realise the full potential of its Islamic economic ecosystem and translate its global ranking into meaningful improvements in financial access and economic welfare for its citizens.
Islamic economics is an economic system grounded in sharia principles. It is present not merely to enforce religious compliance and avoid prohibitions, but also as a process of creating economic benefit for its practitioners, with the ultimate goal of spreading mercy for all creation (rahmatan lil 'alamin).
The modern paradigm of Islamic economics should not halt at the question of halal-haram compliance. It must also become a genuine choice for society — a means to live healthily and conduct profitable business. In countries that have long championed Islamic economics, such as England, the system is no longer viewed solely as a principle of compliance. Instead, it is oriented towards profitability whilst still respecting Islamic principles without neglecting sharia rules.
Prof Mohammad Nur Rianto Al Arif has emphasised that this paradigm shift carries high urgency — namely, moving from mere shariah compliance to shariah impact, or from the formality of compliance to real social transformation.
One of the principal challenges facing Islamic economics in Indonesia is the gap between high literacy and low inclusion. The 2024 National Survey of Financial Literacy and Inclusion (SNLIK), conducted by the Financial Services Authority (OJK), reveals that Indonesia's Islamic financial literacy index stands at 39.11 per cent, whilst the Islamic financial inclusion index is only 12.88 per cent. This significant disparity indicates that whilst public awareness and knowledge of Islamic financial products is relatively encouraging, actual adoption and usage remain remarkably low.
Despite Indonesia ranking third globally in the State of Global Islamic Economy (SGIE) 2024-2025 report, the country's Islamic economics sector continues to face a range of structural challenges. The sector must move beyond formalistic approaches and instead demonstrate tangible economic and social impact.
Islamic economics, at its core, is not simply a way of conducting economic activities according to Islamic theological principles. It represents a comprehensive framework for creating equitable economic outcomes that benefit all members of society, regardless of faith. The shift from compliance-oriented thinking to impact-oriented action is essential if Indonesia is to realise the full potential of its Islamic economic ecosystem and translate its global ranking into meaningful improvements in financial access and economic welfare for its citizens.