Misleading Development and Economic Policies in Indonesia and the Solution Based on Shariah Economics System (Case Study on Indonesia Banking Policy Scandal)

Author (s): 
Gemala Dewi and Dewi Iriani

Indonesia, nowadays is the 16th largest economy in the world, and has the potential to be the seventh biggest by 2030. The population also starting by this decade will enter a cycle of so-called “demographic bonus” when the productive age of people dominate in about 69% of the national population. Within these facts, the Indonesia economy has enormous promise in the future. However, historically, the economic developments in Indonesia have been misled by government policy that tends to nepotism and corruption. Such scandals, as BLBI (Bank Indonesia Liquidity Assistance) in 1998 and Century Bank scandal one decade later are the examples of the weakness of the conventional system of banking.Therefore because of that weakness, it is necessary to pursue legal reform, especially to the creation of new legislation that is accommodative to include the establishment of the Sharia system of banking which is moretransparent, just, and profitable according to Sharia law.

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