MAKING INDONESIA THE CENTER OF THE WORLD’S HALAL INDUSTRY, Deliserdang – Indonesia is the world’s largest Muslim-majority country, the government will seek to strengthen the direction of policies and action plans in the economic and financial sectors. The concept of Sharia economy is universal and inclusive, and has even become a choice of people’s living needs. This condition is a reflection that there is space and opportunities for Indonesia to be able to meet such a large domestic need while attracting a share of halal product trade at the global level.

To realize Indonesia as the center of the world’s halal producers, the need to strengthen the halal product industry, among others, through increasing the production capacity of halal products through the establishment of Halal Industrial Zone (KIH), the establishment of halal zones, as well as halal certification, coupled with strengthening halal industry MSMEs through the use of digital technology, increasing competitiveness capabilities, expanding market access, ease of access to capital, the use of digital technology, and others.

Improving the quality of human resources based on Islamic economy and finance and improving public literacy of halal products. Strengthening islamic economic and financial supporting infrastructure includes strengthening Sharia business actors, consolidating Islamic financing sources, improving the quality of Islamic human resources, strengthening regulatory aspects, and improving community literacy.

Various government policies in 2022, especially in the economic field, one of which is to provide stimulus for the development of sharia economy, which is currently predicted to lead to positive growth including:
Halal Industry Development; The halal industry is one of the significant forces in development whose implications certainly increase The welfare of the community, the common big ideals make Indonesia the world’s largest producer of halal products by 2024.

Based on the Indonesia Halal Markets Reports 2021/2022 report, with the boost in the growth of halal product exports abroad, Foreign Direct Investment (FDI) and import substitution, Indonesia has the potential to increase national GDP by 5.1 billion US dollars per year.

This shows the capability, capacity and seriousness of stakeholders in Indonesia in working on the halal market. The potential of the halal industry is supported by the world’s Muslim population by 2030 which is projected to reach 2.2 billion people or 26.5% of the world’s population. This drives the huge potential of the global halal market.

State of the Global Islamic Economy Report 2020-2021 data shows that the market size of sharia economy in the halal industry reached USD2.2 trillion in 2019 for food, pharmaceutical, cosmetics, fashion, tourism, and others. This data increased by 3.2% compared to the previous year.

Based on the Global Islamic Economy Indicator (GIEI), Indonesia’s Sharia economy rating rose from fifth to fourth, after Malaysia, Saudi Arabia, and the United Arab Emirates. The GIEI indicator shows Indonesia is in the top position as a consumer of halal food, second as a halal cosmetics, and fourth in the world’s halal medicine consumers.

Strengthening the halal value chain ecosystem, especially the integrated agricultural sector, halal food and beverage, and Muslim fashion. The development of a focus on halal food and modest fashion will be superior to other sectors.

The National Committee for Islamic Economy and Finance (KNEKS) is a priority program to support efforts to develop sharia economy, namely uniting steps towards the center of the world’s leading halal producers.

The development of the halal product industry which includes codification of halal product industry data, halal product industry masterplan, establishment of a cross-ministry task force related to accelerating the implementation of UMK halal certification, and technology-based halal product research and innovation. The government continues to encourage the development of the halal industry in Indonesia.

One of the commitments made is to accelerate the implementation of halal certification for micro and small business actors (UMK). So what the government affirms is that UMK is not MSMEs that exist (in) medium and large.

Facilitate the management of the halal certification process by the government through budget allocation prepared by both ministries, institutions, local governments, and SOEs and the private sector. The launch of the Sehati Program (Free Halal Certification) and the provision of UMK halal facilitation through several ministries and institutions became a strategy to accelerate UMK halal certification.

It is estimated that as many as 80% of food and beverage UMK who have a Business Master Number (NIB) also have halal certification. The acceleration of the implementation of UMK halal certification will be carried out through the establishment of a task force (task force) across ministries / institutions.

Through certification, it will help UMK actors who produce halal products expand their product marketing through the global market and accelerate the implementation of halal certification will have a positive impact on UMK players.

The development of the halal industry is also included in the acceleration of industry players and MSMEs of the Halal Industry, including the synergy of accelerating the development of halal industry MSMEs, accelerating the export of halal industry UMK, Sharia economic data centers, halal culinary zones, safe, and healthy, and related to regional-level Islamic economic institutions.

The ideal of becoming the center of world halal production is not impossible for Indonesia to achieve if the right strategy is realized. The Ministry of Industry itself noted several concrete strategies to develop the Halal Industrial Zone (KIH) in Indonesia.

First, there is legal certainty and strategic plans needed by investors to build KIH or become KIH tenants. This legal certainty is in the form of regulations and strategic plans in the form of practical procedures that are easily understood by investors.

Second, providing attractive and progressive incentives for halal business actors, especially export-oriented, import substitution, TKDN and non-fiscal incentives.

Third, strengthening IKM cooperation with the halal industry. Fourth, the development of halal value chain is integrated with halal traceability system and halal assurance system.

Fifth, the development of halal industry human resources and research on the needs of the halal industry through the cooperation of halal centers or halal study centers, sixth, the use of banking and non-Islamic banking financial services to support the sustainability of KIH currently and to be built.

Development of Sharia Finance Industry and Islamic Banking; The Islamic finance sector will continue to be involved, including Islamic social finance so that the industry can move forward together. The development of the Islamic finance industry which includes sharia services of employment social security, government cooperation and Sharia business entities.

Implementation of Sharia creative financing through the cooperation of the government and business entities (PPP), as well as the implementation of BPJAMSOSTEK Sharia services. In terms of Islamic banking, the presence of BSI is a sign of the magnitude of the potential for national economic development this year driven by the Sharia industry, where the implementation of the Islamic economic system is also beneficial for non-Muslim communities. To reach MSME actors to remote areas, projecting funds of Rp53.83 trillion.

MSMEs are the largest group of customers served by the company. Therefore, the portion of financing distribution from BRI Syariah for MSMEs has reached 46 percent of the total financing portfolio.

Efforts to provide positive performance for all stakeholders, as well as being a reliable, resilient and unique Islamic banking partner, so as to compete domestically and globally, Bank Syariah Indonesia (BSI) giant of the rise of the world Islamic economy 2024.

BSI continues to implement seven keys to the acceleration of Islamic banking that must be strong, including 1) IT and digital sides, 2) increasing human resources capacity in all elements of Islamic bank employees so that they can become financial consultants for customers and investors, 3) focus on building the halal ecosystem sector, 4) business models, 5) synergy & collaboration, 6) support from all stakeholders, and 7) Islamic banking literacy.

BSI is optimistic that the existence of Islamic banks into a new energy that has three pillars of strength and uniqueness, namely the principle of profit sharing that makes Islamic banking resilence in the midst of conditions, and asset based financing that has a clear underlying / asset guarantee so that from the bank side has power from the legal and contract side.

And third, the high demand of the community to feel the experience of transacting in accordance with sharia principles. This is further strengthened by the support of stakeholders through various regulations that support the progress of sharia economy in Indonesia.

Among them are the implementation of LKS Qonun Aceh, the choices and freedoms given regarding financial management for payroll and consumer financing facilities for ASN, TNI and Polri.

The Islamic banking industry in Indonesia is one of the sectors that has attractive growth opportunities globally. This is further supported by the population of 209.1 million Muslim population in Indonesia and the potential of the halal industry reaching Rp 4,375 trillion.

The Volume of Sharia Fintech Transactions Is Getting Bigger; Islamic fintech businesses continue to grow in the midst of the pandemic along with the increasing number of new players. Based on data from the Indonesian Sharia Fintech Association (AFSI), there are currently a total of 40 Islamic fintech organizers recorded, registered or licensed from regulators.

Meanwhile, the fintech organizers include fintech P2P lending, Digital Financial Innovation (IKD) and securities crowdfunding. Fintech development, Indonesia is among the countries with the largest volume of fintech transactions and occupies the fourth position of 64 countries in the Global Islamic Fintech Index (GIFT) 2021.

The existence of fintech in 2022 can excite the halal MSME sector so that it can again advance together to advance the halal industry. The size of the Islamic fintech market in OIC countries in 2020 reached 49 billion U.S. dollars and is projected to reach 128 billion U.S. dollars by 2025.

Halal is now a trend in the world. 1/3 of the world’s population is Muslim. Islam is one of the fastest growing religions in the world, currently reaching 1.8 billion people. Talking about halal lately is not only booming in muslim communities, but has become a matter for many people. Many developed countries in Asia, Europe and the Americas, have concentrated themselves on the halal field.

Efforts to improve the initial phase of implementing the Sharia economic development blueprint focused on forming a strong foundation are supported by the establishment of adequate infrastructure to realize the national halal value chain. In the period of the following years, the development of Islamic economy and finance will enter the second phase in the form of “Strengthening islamic financial economic strategies and programs”. In the last 3 years, since this sharia economic development blueprint we implemented, the joint commitment across agencies in the KNEKS umbrella has improved, especially in order to realize sharia economic empowerment, increase financing alternatives supported by Sharia commercial and social financial instruments and optimize the development of Sharia economy based on studies and research.

The Ministry of Industry (Kemenperin) of the Republic of Indonesia noted that the demand for halal products in the world experienced growth of 6.9 percent. The count is expected to continue to grow since 2013 with a total value of USD1.1 trillion to USD1.6 trillion in 2018. Indonesia has great potential in the development of halal tourism considering that most of the population is Muslim and there are supporting factors such as the availability of halal products.
Indonesia, which is majority Muslim, naturally has a culture that has run an Islamic community life, so that in most of its territory which is a tourist destination has been friendly to Muslim Travellers.

Regarding the needs of the world’s Muslims, of the world’s more than 6.8 billion people, no less than 1.57 billion or about 23% are Muslims. Even in Indonesia, Muslims are estimated to reach 203 million people or about 88.2% of the population.

The increasing number of the world’s Muslim population is the main trigger for the rise in the trend of halal products. With the increasing number, the needs of the world’s Muslims will also increase. Seeing the positive response from the world, the halal lifestyle has become easy to implement in all parts of the world.

If the community is educated and cares about the importance of halalness, Indonesia will become a role model for the halal world. The Great Nation is a nation that can capture opportunities and signs of the times and think far ahead, halal is not only the needs of Muslims, but has become a global trend, which is universal which is not only booming in Muslim communities, but has become a matter for many people. Many developed countries in Asia, Europe and america, have concentrated themselves on the field of halal tourism.

The acceleration of education and implementation is marked by the extension of the government’s hand to form a Halal Product Assurance Agency (BPJPH) which is in charge of providing halal certificates of food and beverage products, as well as other types of products. BPJPH was inaugurated on October 11, 2017 is a body that carries out Law No. 33 of 2014 concerning Product Guarantee, the existence of the Halal Product Assurance Agency (BPJPH) is expected to have support from the wider community in order to consume halal products not only into life style but has become a necessity of our lives. BPJPH is a body established by the Government to organize Halal Product Guarantee (JPH) for a number of products consumed by the community. The implementation aims to provide comfort, security, safety, and certainty of the availability of halal products for the community in consuming and use products and increase added value for business actors to produce and sell halal products. Products entering, circulating, and trading in The Territory of Indonesia must be halal certified. Of course, bpjph can synergize with MUI in the process of issuing halal certificates.
Sharia economy a great force in alleviating poverty, improving people’s welfare, encouraging social justice, and also preserving the environment in line with the sustainable development goals carried out by the Government has formed the executive management of KNEKS (National Committee on Islamic Financial Economics), which will help oversee the implementation of the Indonesian Sharia Economy Masterplan in the future, as the driving force of Indonesia’s Islamic finance and economy armed with guidelines. Masterplan of Islamic Financial Architecture (MAKSI) and Masterplan of Indonesian Sharia Economy (MEKSI).

By launching the Indonesian Sharia Economy Masterplan 2019-2024, Indonesia made a big leap to strengthen Indonesia’s Sharia economic ecosystem, because building this ecosystem is indeed the most difficult.

The masterplan that will guide all of us to be carried out in its implementation, to be monitored for the progress of its development, to ensure that we ensure its achievements.

Strengthening the halal value chain with a focus on the food and beverage, fashion, tourism, media, recreation sectors as well as digital-based Islamic pharmaceuticals and cosmetics and finance. Committed to carrying out this masterplan of Indonesian Sharia economy, Indonesia will soon become the leading Islamic economic center in the world.

For the development of the halal industry to support the national economy, regulatory support and government incentives are needed, to encourage the development of the halal industry.

The development of Sharia business activities to strengthen the capacity of MSME actors is also needed affirmative policy support and program integration, to support the development of Sharia business activities.
Meanwhile, strengthening ecosystem infrastructure for the development of the Sharia industry requires strategic coordination support between stakeholders to strengthen the infrastructure of the Sharia industry ecosystem.

Many boarding schools (ponpes) in Indonesia are also a great economic potential. Based on data from the Ministry of Religious Affairs, the number of ponpes in Indonesia in 2020 amounted to 28,194 of which 44.2% of them have economic potential. With the number of ponpes, it can be a driving force for the popular economy, Sharia economy, and Indonesian halal MSMEs.

Indonesia is targeting the increasing role of Islamic finance in the strategic plan for national economic development. All these efforts and achievements require a strong and integrated commitment from stakeholders in realizing Indonesia’s vision to become the world’s leading center of the halal industry and Islamic economy.

Awareness of fulfilling the right to halal food by producers continues to increase globally. In a country that is not familiar with the term halal, halal food is no longer a rare item. Many world-class airlines provide halal menus. Known as Moslem Meal (MoML) among others, including airlines, ranging from Japan Airlines, American Airlines, Singapore Airlines, Qantas, Chatay Pacific (Hong Kong), Saudia, Emirates, Qatar Airways, to Malaysia Airlines. On domestic flights in India and China, Halal menu is available.

Consuming halal products, he continued, is the basic right of every Muslim. There is a health and economic dimension in it. As a Muslim-majority country, without being asked, the state should be present to protect the basic rights of its citizens. This is done so that entrepreneurs are aware of their responsibility in protecting consumers.

The concept of halal can be viewed from the first two perspectives of religion, namely as a food law so that Muslim consumers get the right to consume food according to their beliefs. This brings the concurrence of consumer sustainability. The second is the industry perspective. For food producers, this halal concept can be captured as a business opportunity. For the food industry whose target consumers are mostly Muslim, then of course with the guarantee of the halalness of the product will increase its value in the form of intangible value.

Indonesia is a winning nation. In the era of cultural industry or creative industry, – the era after agriculture, manufacture, and information technology version of Alfin Toffler in the thirth wave – Indonesia has the potential to be a winner. “Tourism is included in the creative industry, because even in tourism we can be winners,
Halal tourism is one of the areas that dominate free trade. The global tourist climate will be strongly influenced by countries that are able to dominate the world’s food business. Free trade competitions emphasize price and quality. A key theory for trading; What should be understood is that the growth of a business often depends on strong competitiveness and gradually builds the core of loyal customers that can be expanded over time.

The creation of domestic halal tourism sovereignty will be the urgency of our nation’s ability to compete in the global food trade. Halal tourism prioritizes halal products consumed by Muslim tourists. However, that does not mean that non-Muslim tourists cannot enjoy halal tourism. For Muslim tourists, halal tourism is part of da’wah. For non-Muslims, halal tourism with halal products is a healthy guarantee.

Because in principle, the implementation of halal rules means getting rid of things that are harmful to humanity and the environment in the products and services provided, and certainly provide good or benefit in general, in accordance with the mission of the Islamic Treatise which is Rahmatan Lil-‘Alamin. Sistemsyariah, teaches humans to live a calm, safe and healthy life, such as not providing alcoholic beverages, entertainment that is far from intoxication and security in the financial system.

The Halal industry is becoming a new current of the Indonesian economy and the world has the hope of a significant increase in islamic economic, financial and business development so that Indonesia’s ideals to become the center of the world’s halal industry in 2024 can be realized. The concept of a new flow of the Indonesian economy.

First, the new flow of the economy must adopt the 5th precept of Pancasila, namely social justice for all Indonesians, so that economic inequality can be resolved immediately. How the contribution of Islamic economy and finance is increasingly significant to create jobs, reduce unemployment, reduce poverty, control inflation, strengthen people’s purchasing power and strengthen the indonesian economy as a whole. So, Indonesia is really strong and prosperous. All components of society can enjoy the impact of this national economic development.

Second, the new flow of the economy must also prioritize the economy of generality or populism. Because, the main strength of the Indonesian economy is in the hands of the people themselves. The government should encourage the redistribution of materials and resources to the community. Economic development is based on building the economy from the bottom (grass root), because the largest part of this nation is the people if the people are strong, then automatically the economy can also be strong.

Therefore, asset redistribution is needed so that people get access to materials that have been controlled by only a few parties. In this regard, Sharia economy has advantages, especially in the concept of zakat and waqf. Third, the new flow of the economy must contain the concept of partnership between fellow entrepreneurs, including small business people. The purpose of this concept, to strengthen the economic strength of business actors who have low economic resources. to continue to be competitive. This partnership by collaborating between entrepreneurs, does not have to weaken the strong but strengthen the weak, so that there are reinforcements. This encourages entrepreneurs to contribute maximum to the strengthening of the economy, as well as make a significant contribution in stimulating economic growth.

Lastly, the new flow of the economy must have a high fighting spirit. The Indonesian nation actually has a high fighting spirit, namely optimism. This optimism is realized by strengthening – strengthening that must be supported by all parties, strengthening literacy, strengthening interconnections between sectors in the economy, strengthening regulations that support strengthening economic development, to strengthening the climate of national and state life that will encourage the productivity of the country’s economy and not cause things that are counterproductive.

The four things above are noble values that are also carried out in the concept of Islamic economics, so that the implemation of this new current, indirectly will also strengthen islamic economy and finance. So it is expected that the Indonesian economy will be stronger, especially the sharia economy and financiality and become a good role model for other nations in the world. The future of sharia economy and the nation’s economy will be brighter.

For the realization of Indonesia’s goal of becoming the main pioneer of the halal industry in the international arena, namely the need for the design of a work program that is well organized and systemized so that the halal industry in Indonesia becomes targeted and clear for the development of the Indonesian halal industry in order to better compete with other countries. This needs to be an increase from the halal tourism sector because in Indonesia there are so many Islamic historical places that can be used as halal tourism in Indonesia. For example, from the buildings of mosques in Indonesia that have a lot of architectural beauty. In addition, Indonesia also has abundant natural resources and includes a country that has the longest coastline in the world, in terms of utilization of natural resources owned by Indonesia in some areas now found halal tourism that is no less beautiful than other tours.

The development of the Halal Industry has recently been so rapid, this is encouraged by the emergence of Muslim awareness to apply islamic teachings and concepts in their daily lives. Halal which used to be just a thing that is allowed in Islam has now become a necessity and lifestyle (lifestyle) for the world’s Muslim community.

Halal industry itself has 10 sectors with the largest contribution, namely financial, food, tourism and travel, fashion, cosmetics, pharmacy, media and recreation, fitness, education and cultural arts.

Humans always need food to make ends meet. Food needs must always be available sufficiently, safely, quality, and nutritiously. Food has a diversity in terms of prices that are affordable by people’s purchasing power, and do not conflict with people’s religion, beliefs, and culture. To achieve all that, it is necessary to organize an oangan system that provides protection, both for those who produce and consume. Food utilization or food consumption will produce quality and superior human resources as one of the determining factors for the success of a country’s development. This is done through the fulfillment of diverse food intake, balanced nutrition, and the fulfillment of food safety, quality, and nutrition requirements.

For food actors must have a sense of responsibility for their products that are disseminated. Whether it is about health problems or the death of people who consume it. The public is encouraged to know and get as much information as clearly as possible about every food product presented before buying and consuming. The information is related to origin, safety, quality, nutritional content, and other necessary information. Therefore, food products need to be stipulated regarding labels and advertisements on the food itself so that people can make decisions based on correct and accurate information.

Access to information is the most important part in fulfilling the principle of information disclosure for consumers which contains the meaning of legal certainty as the purpose outlined in the implementation of consumer protection.

At this time the advancement of science and technology in the field of food is developing very quickly. Processing of food products by utilizing advances in science and technology allows the mixing of halal and haram, whether intentional or not. The form of a thing to know the halalness and sanctity of a food requires a special study that requires multidisciplinary knowledge, such as knowledge in the fields of food, chemistry, biochemistry, industrial engineering, biology, pharmacy, and understanding of sharia.

In fact, food products circulating in the community have not been guaranteed halalness even though business actors have stated that the products marketed are declared halal. The change in food from halal to non-halal is due to the presence of additives to various chemicals, or from animal extractions that are not halal.

Indonesia is a country that has the largest Muslim population in the world which of course has an interest in the safe circulation of products and halal standards. Because automatically Muslims become the largest consumers (majority) in the country in addition to being the target and target of imports of other countries. So it should be for domestic consumers to get protection in obtaining certainty about the halalness of circulating food products.

The position of consumers towards business actors in general is indeed very weak. Consumers become the object of business activities of business actors through promotional tips, advertisements and ways of selling and implementing standard agreements that often intentionally harm consumers. The weak position of consumers becomes a soft meal for business people who often grant by lying by presenting products. With the rapid circulation of products allegedly business people have free space in giving products that are not appropriate.

Therefore, the government must move quickly and well so that the products presented do not lie to the public with halal tips.

The issue of halal-standard products should have become an integral part of global trade and economic practices that demand international standards and quality standards to gain the trust of consumers across countries. That way the flow of goods, services, capital, science between countries becomes easier. International trade has a major effect on the economy between these countries which can create a conducive climate that is mutually beneficial from mutual trade, even more efficient in producing and marketing goods. Many experts have concluded that the benefits of cross-border trade go beyond the benefits of military competition and territorial expansion.

Indonesia also has many things that are advantages in the development of the Halal lifestyle Industry. For example, in terms of tourism or halal tourism, Indonesia has natural beauty that is not owned by other countries. There are many places in Indonesia that can be used as a world-class halal tourism destination. Both lake, beach, and mountain tourism, Indonesia has many choices, let’s call it Lake Toba in North Sumatra. The beaches in Bali and Raja Ampat Islands Beach are very charming. Then for mountain tourism there is Mount Bromo and Mount Rinjani. We also have Komodo Island which is the 7 wonders of the world and borobudur temple which is very iconic.

For cultural tourism, Indonesia is a country with its ethnic and cultural diversity, and each tribe must have its own culture and local wisdom. So there is no need to doubt about what Indonesia can offer through its culture. Then for culinary tourism, Indonesia is known for its deliciousness and diversity of food. The number of tribes and cultures in Indonesia causes each region to have its own special food. Some are famous such as Pempek, Gudeg, and Rendang. Even rendang his delicacy has been recognized by the world. Next is how we ensure the material and its manufacturing process is completely sharia and halal.

There are 4 Strategic Steps in the Development of halal industry
First, increase cooperation both sectorally and across sectors between the government, Islamic banking and industry players. cooperation in the government sector, especially the Ministry of Religious Affairs (BPJPH) and the Ministry of Industry by conducting halal training and certification.

Especially, to Micro, Small and Medium Enterprises (MSMEs) and provide incentives to MSMEs to get halal certification, and cost is one of the barrier factors for MSMEs to obtain halal certification, even though this sector is the biggest support for Indonesia’s Gross Domestic Product (GDP), which is at 60.34%. The latest data, noted that currently there are only 37% of products that have been certified halal, and it is still dominated by large industries that have adequate financial capabilities. “In fact, Indonesia holds important keys in the halal industry. The halal assurance system issued by the Indonesian Ulema Council (MUI) is a parameter for determining halal certification that has been recognized by the world, where at least 44 halal certification members from various parts of the world.

Second, the marketing step so that the product is widely known and can be channeled properly. Therefore, the use of marketing information technology and global distribution systems is a skill that must be known by MSMEs in particular, and halal industry producers in Indonesia. Third, there is a government guarantee that industry players get ease in accessing funds as financing. Thus, in the future Indonesia can occupy the top position of the economic process of ‘producers’ in the halal industry.
Fourth, there is political support and desire from all relevant stakeholders, so that the optimization of the potential of the halal food industry in Indonesia can be realized.

Without the above strategic steps, Indonesia will not be able to survive the fight of the world’s halal industry and is very likely to sink. Investors will think again with unstable political circumstances to make investments in a country, because it will be very risky and blind every projection made.

Eating halal food is the basic right of every Muslim. This is not only related to religious beliefs, but there is a dimension of health, economy and security, so with a muslim-majority population, without being asked should the state be present to protect its citizens in fulfilling the fundamental rights of its citizens. In line with that, business actors (producers) should also provide protection to consumers. For this purpose, it is required a more active role of the state in the regulation of the economic system described in the strategy carried out by the government / state in carrying out trade / business instruments, including through regulation.

Halal lifestyle (halal lifestyle) lately is indeed sweeping the world, not only in countries that are majority muslim but also in countries with a majority of non-Muslims. Awareness of halal food fulfillment increases in the global arena along with the implementation of global halal tourism which is not only limited to the tourist destination sector related to Islamic sites (religious) but concerns the fulfillment of tourism needs themselves. Multinational corporation companies are currently implementing halal systems, such as Japan Airlaines, Singapore AirLines, Qantas, Chatay Pacific (Hong Kong), America Airlines provides halal menus (moslem meal). This symptom also penetrates the Americas, Australia, Japan, China, India, and Latin American countries. Especially Japan, this country has a very serious concern for the development of halal trends, one of the indications with the holding of the Japan Halal Expo which is always crowded so that it is quite successful in attracting the attention and interest of various parties. Japan Halal Expo is a large-scale exhibition that contains Halal products made in Japan. There are currently 350 restaurants in Japan that have provided halal food, 54 of which are specialty restaurants for the country’s food. Providing halal and safe food is a very prospective business, because with halal labels (certification) can invite loyal customers who are not only in demand by Muslims but also non-Muslim communities. Conversely, for manufacturers who do not provide halal information that markets their products in countries such as Muslim-majority Indonesia, the products are less desirable so that Harming the business actors themselves.

Halal food for Muslims is proven to be quality and very good for the health of the human body, such as meat derived from halal animals slaughtered in accordance with Islamic provisions turned out to be healthier for consumption. The existence of halal certifications is not only aimed at giving inner peace to Muslims but also the calmness of production for business actors. Moreover, in the context of economic globalization and global markets, halal food certifications are increasingly needed.

Therefore, why this halal industry has a great opportunity to participate in providing safe, quality, nutritious, and healthy food. The halal industry has been widely applied in other Islamic countries, and there are several non-Islamic countries that have implemented this halal industry. Because the halal industry is not only given to Islamic consumers, to non-Muslims can. In recent years, the Islamic economy and halal industry are seen as engines of new economic growth. The world’s Muslims spend no less than USD2.02 trillion on food, pharmaceuticals, cosmetics, fashion, tourism, and other Islamic sectors (data from The State of the Global Islamic Economy Report 2020/21).

Halal products that were originally a necessity for the Muslim community have developed into part of lifestyle and global trade trends. So that countries with a relatively small Muslim population, such as Thailand, Australia, Brazil, China, Japan, and South Korea also enliven the competition for halal products market.

Improving the quality and productivity of the halal industry, so that national products have competitiveness and are in demand not only by domestic consumers, but also by the global community.

The factors that support Indonesia to become the center of world Sharia economic growth need to be optimized. First, Indonesia is home to the world’s largest Muslim population (229.6 million based on 2020 data). Second, people’s preferences and loyalty to local product brands are quite high.

Third, is the fact that Indonesia is a net exporter of halal and fashion food products with a total export value of USD22.5 billion usd10.5 billion each. Fourth, increased investment in islamic economics.

Through the IHYA Award 2021, industry players have not stopped innovating to spawn new ideas, and contribute to the advancement of the national halal industry and continue to encourage acceleration efforts in realizing Indonesia as the center of the world’s halal industry. The development of the halal industry in Indonesia requires collaboration and synergy between all relevant stakeholders to create an ecosystem supporting the growth of the national halal industry. The ecosystem encourages the growth of sharia economy and national halal industry, which can spur the formation of halal industry and new halal industrial areas.

The halal industry is currently experiencing a positive trend in recent years. Halal industry means an industry that applies halal standards from upstream to downstream.

Halal indicators can be interpreted as quality standards that are in accordance with Islamic Sharia law and are used in every activity carried out by Muslims. Halal here has the meaning of all kinds of products and services (services) allowed by Islam. In Islam consuming halal food and drink is an obligation that Allah has been firmly commanded in the Qur’an. S. Al-Baqarah, 2:168-169” means: “O man, eat the good of what is on earth, and do not follow the steps of satan; For satan is a real enemy to you.

Surely satan only tells you to do evil and heinous, and tells God what you do not know.”

In general, the definition of halal is only limited to food / drink. Actually halal is not only for food, but also on the use of technology used to meet these products / services. The halal industry is not only intended for countries with Muslim-majority populations, but also aimed at countries with Muslim minority populations. Various circles, races, ethnicities, or tribes can enjoy the halal industry without hesitation.

Halal consumption is a basic necessity for Muslims. It is also the top choice for non-Muslims. So obviously halal certification is needed to ensure the halalness of the products to be consumed. The lifestyle of the majority of people based on Islamic rules creates its own place for the halal industry to develop. The great potential of the halal industry must be utilized properly to boost the economy, one of which is the Indonesian economy. The existence of the Indonesian halal industry is very likely to be developed into a global market given that the world’s Muslims reach 1.8 billion.

The Masterplan of Sharia Economy 2019 – 2024 stated that the meaning of halal is widely interpreted. Not only allowed but also healthy so it is worth consuming. For Muslim consumers, halal food is a product that has gone through the halal certification process.

It is characterized by the inclusion of halal emblems on the packaging. For Muslims, the halal emblem indicates that the product meets the requirements set by sharia law so that it is suitable for consumption.

Meanwhile, for non-Muslim consumers, the halal logo represents a symbol of cleanliness, quality, purity, and safety. This emblem becomes the standard and barometer of the world that determines the quality of the product.

The Masterplan of Sharia Economy noted that the growth of the middle class increased by 7 percent – 8 percent per year, so that purchasing power increased. This fact is a very large target market, especially for Indonesia, which is majority Muslim.

Moreover, public awareness to eat halal food has also increased. However, until now the access of business actors in Indonesia, especially micro, small and medium enterprises (MSMEs) to the international market is limited.

In interpreting halal tourism, it is necessary to note the classification of Muslim travelers whose number is increasing every year. Crescent Rating also issued several development goals or development goals for Muslim tourism that contain important values in the development of halal tourism. Development goals not only pay attention to the economic side but also socio-cultural to spiritual in tourist travel.

Tourism can be categorized as halal when it has an ecosystem of faith-based services such as halal food, worship facilities, restrooms that have water for tadpoles, and not an Islamophobic environment. Halal tourism is how tourism can increase comfort without forgetting the obligations of faith and increase understanding through the journey of historical and cultural heritage. Indonesia, which has the largest Islamic economic market, is well aware of the potential of halal tourism. In fact, Indonesia has prepared a Sharia Economy Masterplan 2019 – 2024 developed by Bappenas. The existence of Muslim-friendly tourism, is expected to support the balance of service trade and revive the double impact on other sectors, including aviation, hospitality, and culinary businesses.

The halal industry which is becoming a priority sector in Indonesia is seen through the planning of KNEKS (National Committee of Islamic Finance) where the improvement of this industry is expected to encourage economic growth and also national Islamic finance. The development of the halal industry has become a concern by the Indonesian government, this can be seen from the government’s efforts in issuing a ‘legal umbrella’ or rules for the development of the halal industry in the form of Law No. 33/2014 concerning Halal Product Guarantee. The law includes protection, accountability, transparency, fairness, legal certainty, efficiency, effectiveness, and professional. The large number of residents and the increasing income of the Muslim community led to a high variation of halal products.

Halal infrastructure is currently not only in the form of halal food, but in other forms and equally is on the rise, namely such as e-commerce, travel, finance, fashion, cosmetics, medicine, media, healthcare, and education.

The food and beverage sector is the most common sector in the halal industry. This food and beverage sector has great potential in the halal industry. People today are increasingly concerned about the halalness of the food and drink they buy. Currently, the growing sector is in the Muslim fashion sector. Indonesian Muslim fashion is increasingly famous with the emergence of many Muslim fashion products such as hijab fahion from young designers such as Dian Pelangi and Zaskia Sungkar.

The halal industry is also included in the world of technology, such as smartphone applications that can currently provide features to show the direction of the qibla. In addition, many applications also provide Islamic features such as the digital Quran with its translation, prayer schedule, and daily prayers. The cosmetic industry has also started using halal labels for its products.

With the halal certificate, Muslim consumers do not hesitate when using these cosmetics. The halal industry is also venturing into the tourism sector. Indonesia has many tourist destinations. With the management of tourism in Indonesia into a halal tourism destination, it will invite more and more interest from world tourists to visit Indonesia. Global Muslim Travel Index (GMTI).

The high domestic demand for halal products can be seen in Bali Papua, NTT, which has a majority non-Muslim population, many halal products are found to be branding.

Companies that produce goods with halal certification, the industry in carrying out the process of managing the procurement, movement, storage, and handling of materials, livestock, and supplies of semi-finished goods both food and not food along with related information and documentation flow through corporate organizations and supply chains that comply with the general principles of Shariah and will benefit everything well and safe for the health of our bodies.

The halal industry is also venturing into pesantren. The roadmap includes the development and replication of Islamic business models in pesantren, standardization of pesantren financial statements, development of digital platforms, virtual market platforms, development of centers of excellent to the establishment of national pesantren economic and business holdings. October 22nd is celebrated as National Santri Day. Commemoration of National Santri Day since 2015 by President Jokowi based on Presidential Decree Number 22 of 2015. In general, santri is a term for someone who follows Islamic religious education in pesantren huts.

Pondok Pesantren introduces the principle of Tri Dharma pesantren, namely (1) faith and laughter to Allah SWT; (2) useful scientific development; and (3) service to society, religion, and the state.

Strengthening the pesantren economy is one of the keys to moving the national Sharia economy. Pesantren huts have an important role in developing sharia economy. The potential is greatly reflected in the 28 thousand boarding schools with the number of students reaching 18 million people, it needs to be collaborated with many people, such as holding a national pesantren business.

The pesantren business holding is intended to be a program to strengthen independence to support the economic acceleration of pesantren hut business units. Pesantren is also a market as well as having great economic potential in meeting the needs of students.

Holding pesantren has a very strong effect on pesantren, with larger businesses, especially in negotiating with other business partners. The existence of this pesantren business holding will facilitate the realization of initiatives and strategies related to pesantren development, including the development of pesantren governance and the common market.

Some other efforts that need to be done are improving skills through the pesantren entrepreneurship curriculum, improving skills through the procurement of active and creative skills training facilities under expert guidance, empowering economic business development through increasing business capital, mentoring economic business development training and market absorption.
The role of the government and the private sector supports the empowerment of pesantren to have superior products, the role of the government in the absorption of products by pesantren. Bank Indonesia (BI) is also expected to be optimal in the development of Islamic economy through the economic empowerment of pesantren as “AIR” (Accelerator, Initiator and Regulator).

The government poured a number of assistance for boarding schools to enter a new norm at once in the context of the national economic recovery of Rp2.6 trillion. The roadmap for developing the economic independence of pesantren 2017 – 2025 also exists.

Pesantren became markazul ishlah, which is a center of change and improvement and an innovation center. Pesantren not only prepares individuals who understand religion, but also as an economic institution that is able to play an important role in building the economy of society.

In other words, pesantren must be an agent of development (agent of development), accelerator, facilitator for economic actors, especially in rural areas, MSMEs whose numbers dominate the nation’s economy. We hope that the role and products of pesantren continue to meet and decorate the beautiful paintings of the nation’s struggle with gold ink towards Indonesia Emas 2045.

Solutions and strategies for economic empowerment of pesantren include the need to prepare a roadmap that is developed gradually until pesantren independence is achieved. BI creates programs with six main principles.

First, make a real contribution to the economy of pesantren, society, and national. Second, the economic empowerment of pesantren through increasing the economic capacity of pesantren, encouraging exports, supporting the local economy, and supporting inclusive growth.

Third, build a pesantren ecosystem with programs that are conceptualized from upstream to downstream (end to end), ranging from production input, management, to marketing. Fourth, the development of pesantren independence through improving governance, business models, virtual markets, excellent centers, and the formation of business holdings.

Fifth, increasing access to pesantren both in terms of financial markets, entrepreneurship, technology networks, and digitalization. Sixth, build by strengthening infrastructure and institutional cooperation.

Indonesia top 10 rankings in the Muslim fashion sector, halal food, Islamic finance, halal tourism, halal cosmetics, media and recreation. The obstacles include pesantren is an educational institution for school-age children. This raises practical obstacles in the field, so the right strategy is needed for the economic empowerment of pesantren.

Indonesia’s domestic fashion market is the third largest in the world with a value of 21 billion US dollars which is the potential market for absorption of pesantren products.

Indonesia’s potential export opportunities are also wide open to Saudi Arabia, Pakistan, United Arab Emirates, Southern Europe, Eastern European Countries, South Asia (Pakistan, Bangladesh, and India), for example, in the form of world-class local fashion products through the development of work by professionals in their fields, so that it becomes a world-class product in the form of modest fashion and hijab.

The Muslim population in Indonesia reaches 87.18% of the total population. Indonesia is placed as the country with the largest Muslim population in the world which has the potential to increase the Islamic financial inclusion index.

As an Islamic-based educational institution, pesantren has a great contribution to developing the economy, especially sharia economy in Indonesia. This is because of the large number of boarding schools in Indonesia. The power of Islamic finance in the face of various economic crises has proven real. When the global crisis of 2008, many financial institutions were struggling, even financial institutions as large as Lehman Brothers that had been more than 100 years old were not saved.

In the condition of the crisis, it turns out that Islamic financial institutions can survive and even continue to grow in the midst of the crisis. Islamic financial institutions have stronger resilience in the face of crises compared to other financial services institutions.

When the financial sector developed during the crisis, Islamic financial institutions actually experienced positive growth. The resilience of Islamic financial institutions is also now evident in the midst of the Covid-19 pandemic.

Currently, the development of Islamic financial institutions in Indonesia shows positive numbers. In fact, the global and domestic economy is experiencing a decline due to the spread of the Covid-19 virus. Data shows that until July 2020, the value of Islamic finance industry assets grew 20.61% on an annual basis to Rp1,639.08 trillion. This growth was followed by an increase in the market share of Islamic finance to the national financial industry to 9.68%.

Although increasing, the market share of Islamic finance is still relatively small. This can be seen from the level of public literacy of Islamic finance which is still at 8.93%.
The issuer of state-owned Islamic bank, PT Bank Syariah Indonesia Tbk ensures that it will enter the halal industry business ecosystem in Indonesia. This is done considering that the potential of halal business in Indonesia is still very large along with the majority of the Indonesian population is Muslim and referring to research published by the Global Islamic Finance Report (GIFR), the Muslim population who have disposable income is estimated to provide income to the halal industry market of more than US $ 2 trillion and will reach US $ 3.74 trillion.

The establishment of PT Bank Syariah Indonesia Tbk (BSI) is expected to be able to synergize strongly between Islamic banking and the halal industry, one of which is through link and match, thus accelerating the potential of halal in the country and reducing challenges from other countries that are starting to build halal tourism. The potential of the halal industry in Indonesia reaches Rp 4,375 trillion. Of these, the halal food and beverage industry sucked the largest portion, which was worth Rp 2,088 trillion followed by Islamic financial assets worth Rp 1,438 trillion. Currently, the halal food & beverage industry is in demand by many people during the pandemic. This is an opportunity that Indonesia can use to become a halal producer in the world. BSI has a greater moral responsibility to actively support the development of the halal industry in Indonesia. Islamic finance should be a supporter and driver of the halal industry in Indonesia. As of September 2021, islamic banking industry assets grew by 12.24 percent year on year. Financing continued to grow also by 7.48 percent and DPK experienced growth of 9.4 percent. Bank Syariah Indonesia, after its merger of 3 Islamic STATE-OWNED Banks to become the largest Islamic bank in Indonesia today, this is in accordance with the Masterplan of Indonesian Sharia Economy (MEKSI) 2019-2024, in order to realize Indonesia as a center for producing halal products in the world and a leader of the global Islamic economy, it acts as a consoler so that there is a balanced synergy between stakeholders in building the Sharia economy, especially halal tourism. BSI as one of the important parts of the Islamic finance sector also has a significant role in supporting the growth of islamic economy in Indonesia.

The roles taken by BSI include raising funds from the ummah, financing MSMEs, retail, and wholesale, and optimizing Ziswaf funds. Later the funds will be distributed to the main sectors that are the goals of BSI, one of which is the halal industry. BSI has a variety of solutions to help develop the halal industry ecosystem in Indonesia, such as financing for halal supply chains, intermediation between domestic and global halal investors, special financing for companies that have high leverage, and Super App-based services – Mobile Banking for ease of financial transactions in the halal industry. Sharia economic and financial development policy is an effort by Bank Indonesia to support national Islamic economic and financial policies aimed at making Indonesia the Epicentrum of the Halal Industry and World Sharia Finance.

This existing potential must be realized through good orchestration, which is more integrated and more focused. BSI’s commitment to be a support in the halal industry cannot be separated from Bank Indonesia data which recorded in the second quarter of 2021 the growth of the halal industry in the leading sectors, namely halal food, Muslim clothing, and Muslim-friendly tourism reached around 8.2%.

The growth was higher than the increase in national gross domestic product (GDP) of about 7.07%. The value of Indonesia’s halal food exports in the same period grew by about 46%, reaching US$ 10.36 billion. Bank Indonesia also expects the halal industry globally will grow rapidly as the number of Muslim population in the world increases.


Sunarji Harahap, M.M.
Journalist / Lecturer of the Faculty of Islamic Business Economics UIN North Sumatra / MES Sumut Board / IAEI Sumut Board

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