Dr. Sutan Emir Hidayat, Secretary General of the Central Executive Board of the Indonesian Association of Islamic Economists (IAEI) and Associate Professor in the Islamic Economics Program at Gunadarma University, was one of the speakers at the Indonesia Update 2026 conference organized by the Indonesia Project, Crawford School of Public Policy, The Australian National University (ANU), in Canberra, Australia, on September 18–19, 2026.
With the theme “Islamic Diversity in Indonesia,” this annual conference has been held since 1983, while the Indonesia Project itself was established in 1965. This forum brings together academics, policymakers, and researchers to discuss various developments in Indonesia to support public policy research in various fields, including economic and social development, regional development, gender, human resources (HR), poverty, governance, and the environment.
During the “Institutions” session on Saturday (September 19), Sutan Emir will present a paper titled “The Indonesian Path of Islamic Economy and Finance: Contested Governance and Uneven Implementation,” co-authored with Adelina Zuleika, Ishmah Qurratu’ain, and Ryanda Al Fathan.
The paper examines the development of Indonesia’s Islamic economy and finance through an ecosystem approach. This approach views the Islamic economy as an integrated ecosystem encompassing both commercial and social finance, serving as a support system for halal real-sector activities, as well as a supporting infrastructure ecosystem that includes regulations and institutions, governance, research and innovation, human resource development, and the coordination and alignment of Islamic economic and financial policy directions at both the national and regional levels.
The study indicates that Indonesia has made progress in building a more integrated and comprehensive policy architecture. However, implementation and development across each sector remain uneven. In the Islamic finance sector, particularly Islamic banking, structural challenges persist within a financial system historically dominated by conventional banking.
Current tax policies and regulations are deemed not yet fully capable of accommodating the unique nature of Islamic financial transactions. This is one of the factors causing a gap between the significant growth of the halal real sector and the relatively slower development of the Islamic finance sector, particularly Islamic banking.
Sutan Emir and his team also highlight the importance of coordination between the central and local governments. The establishment of Regional Sharia Economic and Financial Committees (KDEKS) in various provinces is part of the effort to translate national policies into regional development priorities. However, differences in institutional capacity, human resources, budgets, and development priorities mean that implementation has not been uniform.
Through this study, the authors emphasize that the challenges of developing the Islamic economy and finance do not end with policy formulation. The next challenge is ensuring that these policies can be translated into more integrated economic outcomes and more equitable benefits.
Sutan Emir Hidayat’s participation in Indonesia Update 2026 is part of an effort to bring Indonesia’s perspective on the development of the Islamic economic and financial ecosystem into international academic and policy discourse.
