"(The market share of the sharia financial industry in) Indonesia stands at 5.3 percent; Malaysia, 23.8 percent; Saudi Arabia, 51.1 percent; and the United Arab Emirates, 19.6 percent. It is interesting to study the reason behind the small market share of the sharia financial industry in Indonesia," Amar noted in a statement here on Thursday.
Amar, concurrently secretary of the PP Muhammadiyah's Special Da'wah Institute, opined that the Job Creation Law will be beneficial in boosting the sharia financial industry that encompasses sharia banking, sharia non-banking financial industry, and sharia capital markets.
The Islamic financial industry faces challenges including limited capital and hassles in processing permits, he remarked.
Amar noted that several points in the Job Creation Law offer valuable opportunities for business players in the Islamic financial industry.
The lecturer cited the example of sharia banking that is regulated in paragraph 4 of Article 79 of the Job Creation Law.
"The first opportunity lies in point 3 (Article 79) on capital. In the previous law, the rules regarding capital were regulated in accordance with the Bank Indonesia regulations. Meanwhile, in the Job Creation Law, the regulation is now regulated by the investment regulator. This is a good opportunity," he remarked.
Meanwhile, the second opportunity lies in point 1 on bank ownership that was originally regulated regarding complementary provisions. However, in the Job Creation Law, the complementary provisions have been omitted, thereby making it easier, according to Amar.
Moreover, the Job Creation Law, Indonesia's first omnibus law comprising 79 laws, also benefits cooperatives with sharia principles, which are currently facilitating the establishment of cooperatives with sharia principles by the existence of Article 86 of the Job Creation Law, which adds Article 44A to the Cooperative Law.
This new regulation is a good opportunity to establish a cooperative based on sharia principles for job creation, taking into account the current presence of only 4,500-5,500 units of this type of cooperative, he pointed out.
Meanwhile, lecturer at the Faculty of Economics and Business, State-run Islamic University (UIN) Syarif Hidayatullah Jakarta, Arief Mufraini, gave due importance to the regulation in the Job Creation Law on foreign investment in Islamic banking.
"The additional capital should offer a better space in Islamic banking or Islamic banking," he expounded.
Earlier, President Joko Widodo had highlighted the government’s all-out efforts to revive the domestic Islamic finance industry that was akin to a sleeping giant.
"The Islamic finance industry is a sleeping giant. Currently, the government’s major concern is to awaken this giant," Jokowi stated at a virtual opening ceremony of the Indonesia Sharia Economic Festival (ISEF) 2020 here on Wednesday (Oct 28).
Related news: Political turmoil amid COVID-19, economic recession can add to burden
Related news: Jakarta police detain 500 for stone-pelting