“One of the main keys to achieving our goal [of becoming one of the strongest economies in the world] lies in our identity as the world’s largest Muslim population in the sharia economy,” Jokowi said during the launch of the master plan at the National Development Planning Agency (Bappenas).

Even though Indonesia was home to the world’s largest Muslim population, its presence in the global halal market remained limited compared to its smaller peers, such as Malaysia, the United Arab Emirates and Bahrain, Jokowi said.

He was referring to the State of the Global Islamic Economy Report 2018-2019, which says that Indonesia is the tenth-largest exporter to Organization of Islamic Cooperation (OIC) countries.

Indonesian exports to OIC countries totaled US$7.6 billion in 2017, lagging behind countries like Brazil and the United States, which have minority Muslim populations.

Thirty-six percent of Indonesia’s domestic spending in 2017 comprised halal goods, with the majority of the goods having been imported.

The master plan outlines four main strategies for transforming Indonesia from simply a halal market to a global producer of halal goods and services.

The strategies are to strengthen the halal value chain by focusing on the country’s most competitive sector and strengthen the presence of the sharia financial sector as a capital provider to halal businesses.

Other strategies are to enhance the role of micro, small and medium enterprises as the prime movers of the value chain and cooperate with e-commerce platforms to promote Indonesian halal goods and services.

The master plan would also focus on boosting the halal value chain in five priority sectors with the help of sharia banks and nonbank financial institutions. The five sectors were food and beverage, fashion, tourism, media and recreation, and pharmaceuticals and cosmetics, Jokowi said.

During the launch, two local e-commerce unicorns, namely Bukalapak and Tokopedia, signed a memorandum of understanding (MoU) to promote local halal products and services with the government’s National Committee for Sharia Finance, which has been tasked with overseeing the implementation of the master plan.

“We should take these steps and better utilize our abundance of halal products so that [...] we will become the largest producer of halal goods for other countries,” Jokowi said. “I believe that if we are committed to this, Indonesia will soon become one of the leading centers of the sharia economy in the world.”

Speaking during the launch, Bappenas head Bambang Brodjonegoro said the final goal of the master plan was to translate halal spending into investments in halal business sectors and to export more than import.

He expressed hope that Indonesia would be able to achieve the status of global halal hub by the time the master plan concludes in five years.

Nevertheless, he acknowledged there were several challenges in implementing the plan, as the country’s sharia finance system needed to support the growth of the halal industry.

“The existing sharia banks should improve their performances as this master plan foresees them as becoming the backbone of Indonesia’s world-class halal industry, instead of only becoming a second choice for funding options for businesses,” said Bambang, who is also the national development planning minister.

A government regulation that will give the Religious Affairs Ministry the authority to issue halal certifications has yet to go into effect even though a 2014 law on the matter states that all halal product manufacturers must obtain their certifications by October.

“We have recently discussed this issue with the ministry and addressed how important it was for the government regulation to be established immediately [...] as we need to make sure that this certification rule will not burden producers of halal goods, especially micro, small and medium enterprises,” Bambang said.

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