Malaysian, Indonesia Lead In Islamic Public Finance Innovations

JAKARTA, Oct 4 (Bernama) -- Malaysia and Indonesia are acknowledged as pioneers in developing Islamic public finance instruments within their fiscal policies, according to Indonesia’s Ministry of Finance (MoF).

These instruments integrate Islamic principles such as justice and equity, provide essential funding for government budgets, and significantly enhance inclusiveness, social welfare, and sustainable governance, it said in a statement.

Both countries have achieved notable progress through various innovations with products like green sukuk, Sustainability Malaysian Government Investment Issues, and cash waqf linked sukuk.

The MoF emphasised that Islamic public finance has produced phenomenal innovations on a global scale, particularly with the advancement of sustainability-linked sukuk.

During the guest lecture session at the 8th Annual Islamic Finance Conference (AIFC) held here recently, Malaysia’s Finance Minister II Datuk Seri Amir Hamzah Azizan revealed that the MADANI Economy framework has been the foundation of Malaysia’s strong economic performance over the past 24 years.

The framework is built on six core values: Sustainability, Ihsan, Respect, Innovation, Prosperity, and Trust.

The MoF stated, “This framework aligns with Maqasid al-Shariah principles, formulated with a focus on serving the community and mapping a new direction for Malaysia’s socio-economic landscape.”

Meanwhile, Indonesia’s Vice Minister of Finance Thomas A. M. Djiwandono, in his opening remarks, stressed the need for innovative approaches to manage economies and public finance in response to global economic dynamics.

He emphasised that the Islamic economic paradigm, based on the principles of Maqasid al-Shariah -- justice, equity, social welfare, and ethical governance -- can provide valuable insights for resource mobilisation and socio-economic development.

In closing, he urged participants to collaborate on developing Islamic finance to create a global economic system that benefits both the Muslim community and the wider world.

The 8th AIFC was supported by the Islamic Development Bank, the National Committee for Islamic Economy and Finance, the Indonesian Association of Islamic Economists, Universitas Indonesia, and Bank Syariah Indonesia.

-- BERNAMA