JAKARTA – Indonesia’s National Islamic Finance Committee (KNKS) is set to be renamed the National Sharia Economy and Finance Committee (KNEKS) to better reflect its mandated work, Dr. Sutan Emir Hidayat, its Director of Education and Research told Salaam Gateway on Monday (Jan 20).
The revision draft of Presidential Regulation Number 91/2016 on KNKS is currently being reviewed by President Joko Widodo in the state secretariat, Dr. Sutan said after the committee’s meeting with Vice President Ma’ruf Amin today.
KNKS has already been covering Islamic sectors beyond finance, a responsibility it gradually took on since its establishment in 2017. Last year it was mandated to coordinate the implementation of Indonesia’s Sharia Economy Masterplan (MEKSI 2019-2024).
The vice president is likely to oversee the day-to-day decision-making and operations of the committee following an organisational change. President Widodo is currently KNKS’s chairperson, with the vice president serving as vice-chairperson.
“The general chairperson will be the President himself but the Vice President will be the daily chairperson who will lead national economy and finance development,” said Dr. Sutan.
“Given his strong track record and popularity in the Shariah industry, I think we will move faster,” he added, saying that the Vice President intends to hold meetings at least once every three months to stay on top of developments.
Ma’ruf Amin was formerly chairperson of Indonesia’s top Islamic clerical body Majelis Ulama Indonesia (MUI), which until October 16 last year was the country’s only halal certifier before the role was assumed by government body BPJPH.
The six current members of the board are likely to remain, according to Dr. Sutan, but more ministries and institutions are likely to be added to the existing 10 steering committees, including the Ministry of Trade and Ministry of Industry.
In today’s meeting which lasted an hour, the Vice President also mandated five goals to KNKS’s executive management, which broadly cover the aims as outlined in the Sharia Economy Masterplan.
They include to strengthen halal industry players with the aim of increasing halal exports, formulate more attractive incentives to attract more businesses to halal industry zones and special economic zones, expand the product portfolio of the Islamic capital market, and boost Islamic social finance that covers zakat and waqf.
“We should increase zakat distribution as a buffer for ultra micro entrepreneurs, then micro waqf banks to serve micro players with loans up to 3 million rupiah, and then upgrade them with up to 10 million rupiah loans from cooperatives or microfinanciers such as Baitul Maal wa Tamwil (BMT), and finally guide them to be bankable with loans of more than 10 million rupiah through Islamic banks, and Bank Perkreditan Rakyat (BPR),” said Dr. Sutan. BPR, or People’s Credit Banks, are some 9,000 small, decentralised microfinance institutions.
The committee is also mandated to focus on capacity building for the human resources and research areas of the halal industry. Indonesia currently lacks halal auditors for the halal certification process, halal experts, and workers to serve Muslim tourists in five-star hotels, as well as experts to formulate medicines.
“We also need more researchers in halal applied sciences so they can trigger more R&D activities,” said Dr. Sutan, citing research on halal gelatin substitutes as an example.
“In the long run, we want to integrate these types of research in the KNKS’s integrated Sharia economy data center on our portal,” he added.
(Reporting by Yosi Winosa; Editing by Emmy Abdul Alim email@example.com)
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