Indonesia is the first developing country to hold the presidency of the G-20 meeting. The G-20 presidency, previously held by Italy, was then handed over symbolically by Italian Prime Minister Mario Draghi to Indonesian President Jokowi at the G20 Summit in Rome.
The G-20 is a multilateral cooperation forum consisting of 19 major countries and the European Union. The G-20 represents more than 60% of the world's population, 75% of global trade, and 80% of the world's Gross Domestic Product (GDP).
The Indonesian economy, based on GDP product, in the third quarter of 2021 reached IDR 4,325.4 trillion or based on constant 2010 prices it reached IDR 2,815.9 trillion. When compared with Quarter III-2020, the Indonesian economy in Quarter III-2021 experienced growth of 3.51 percent (y-on-y).
By assuming the Presidency of the G20, Indonesia is leading discussions on global economic and financial reform agendas to create better governance and the world economy and support the ongoing global economic recovery process.
In addition, Indonesia has the opportunity to raise issues that represent national needs. With the slogan, G-20 Presidency "Recover Together, Recover Stronger", Indonesia's leadership at the G-20 can provide hope and spirit to revive the economy and finances affected by the pandemic.
Apart from that, the G20 must be used as a momentum for the development of the sharia economy and halal industry at the international level. The Indonesian government must take advantage of the momentum as host of the G20 Summit to accelerate the development of sharia finance and economics. Especially in realizing the government's goal of making Indonesia the center of the sharia economy and global halal industry.
The momentum of the G20 which brings together top officials from countries and industry players as well as stakeholders from G20 members, the government must use this opportunity to introduce the potential of sharia finance and economics as well as halal industry and even the opportunity to further introduce sharia social finance such as zakat, infaq, alms and waqf as architecture of global economic and financial reform.
Indonesia, as a member of the G20 country with the largest Muslim population in the world, must show G20 members that sharia economics and finance as well as halal industry are one of Indonesia's strategic policies in encouraging national economic growth and driving the global economy into the future.
Based on the State of Global Islamic Economy Report (SGIE) 2020/2021, the potential for the global halal market is growing along with the increase in demand for halal products. This is in line with the increase in the global Muslim population which reached 1.9 billion in 2019 and is predicted to grow twice as fast as the world population as a whole.
Indonesia Halal Market Report 2021 reports that there are export opportunities of USD 3.58 billion from the Organization of Islamic Cooperation (OKI) and non-OIC markets for industries, namely Halal Food of USD 2 billion, Muslim Fashion of USD 1.3 billion, Halal Cosmetics of USD 200 million, Pharmacy Halal amounting to USD 100 million.
However, currently the halal industry in Indonesia is still lagging behind several other countries producing halal products in optimizing the halal industry which has great and promising potential. Indonesia is only the main market (consumer) for the world's halal industry. Indonesia, as the largest Muslim country in the world, should become the world's main producer and exporter of halal products.
Indonesia is the fourth largest importer of halal food products with an import value reaching 14 billion US dollars. Meanwhile, Thailand has utilized the potential of the halal industry by exporting halal products to OIC member countries of around 5,112.36 million US dollars (number 13 in the world) and Indonesia has become an importer of halal food from Thailand, so that Thailand is known as the world's halal kitchen center. . Indonesia is also the main importer of halal meat from New Zealand and Australia.
On the other hand, the Indonesian government needs to convey in the G20 forum that sharia economics and finance in Indonesia have played a role in the success of G20 development programs and goals, such as supporting sharia finance in encouraging sustainable development goals (SDGs) through sustainable finance and digital financial inclusion.
Sharia finance contributions to the G20 program in Indonesia include the issuance of retail green sukuk emissions and ultramicro financing by the Government Investment Center (PIP) for underserved communities for women and micro business actors. Apart from that, the digitization of sharia finance through sharia fintech has encouraged increasing financial inclusion and MSME financing for poverty alleviation.
Support for sharia economic and financial programs and initiatives to achieve SDGs goals has proven that sharia economics and finance are relevant and aligned to be used as a platform
modern international development. Therefore, the government must be confident in raising Islamic economic and financial issues and symbols in the G20 series of events as a potential program in global economic and financial reform. This is because the G20 plays a very strategic role in formulating various global issues related to growth and the economy as well as economic and financial stability.
It is hoped that the momentum of the G20 Presidency will not be overlooked in campaigning for issues of halal economics and sharia finance at the G20 forum which have enormous potential to contribute to the growth and strengthening of the global economic ecosystem. Indonesia must be at the forefront of developing the halal economy and sharia finance in order to achieve the government's vision of becoming Indonesia as the world's center for halal products by 2024.
Disclaimer:
- Source: detikNews (Published March 21 2022, with the title "Ekonomi Syariah dan Industri Halal di G20")
- The author's views do not represent the views of the Institution