NEWS

2025.04.08

【Report】The UIII-RU International Symposium on Islamic Economies and Emerging Intellectual Specialists was held!

On Sunday, September 27, 2024, Asia-Japan Research Institute (AJI), Ritsumeikan University, Japan, Universitas Islam Internasional Indonesia, and KAKENHI, jointly organized the UIII-RU International Symposium under the title “Expanding Islamic Economies and Emerging Intellectual Specialists: Graduate Education, Research Institutions, and the Ummah’s Aspirations.”

The meeting focused on the integration of Islamic principles and moral values into economic development and digital transformation, with discussions on the challenges and opportunities in Islamic banking and finance, financial education and literacy, and the role of Islamic social finance in supporting education and talent development. In addition, the importance of the Arabic language in understanding Islamic economics and finance was emphasized, along with the concept of Takaful and its implications. Here is a link to the event poster: 20241027_AJI_WS_A4W

Professor Yasushi Kosugi, Director of the Asia-Japan Research Institute, Ritsumeikan University delivered the opening remarks. After welcoming all of the participants he introduced this symposium as the fruit of the memorandum of understanding concluded between UIII and Ritsumeikan universities two years ago, and when both universities formally agreed to collaborate to promote a sustainable future.

He explained that the Islamic economy in all its aspects and its accompanying research fields, is taken for granted, but only forty years ago it was scorned by the Media as Muslims’ impossible dream. Islamic institutions are expanding, and their economically feasibility within the capitalist system has also been proved.

He went on to say that the expansion of the Islamic economy needs to be balanced by the expansion of research by Islamic economic scholars, and this requires an expanding base for scientists in the fields of higher education. Meanwhile, the capitalist economic system has many issues, and Islamic economics holds the key to solving many of these problems. The Islamic Ummah will soon become the most expansive community on the earth, and this will require corresponding responses from the Islamic academia.

Prof. Kusugi concluded with the hope that this symposium would contribute towards fulfilling these responsibilities.

Photo: Professor Yasushi Kosugi delivering his welcome speech

The first session began with a presentation by Dian Masyita, Professor of Islamic Finance, Dean of the Faculty of Economics and Business, Universitas Islam Internasional Indonesia (UIII) entitled, Integrating Islamic Principles & Moral Value into Economy in Digital Era

Professor Masyita pointed out that our world is undergoing a rapid transformation driven by technological advancements, socio-economic and geopolitical shifts. Human behavior is also changing, and our societies are adapting to the new era. In the current volatile and rapidly changing era, Islamic economics and finance need to adapt to new technologies while upholding core Islamic tenets like the prohibition of interest, risk-sharing, ethical investment, and social welfare. After introducing the key Islamic economic principles of justice, wealth redistribution, asset-backed financing, and avoidance of prohibited activities, Professor Masyita emphasized the need for the ethical use of technology, data privacy, financial inclusion, and developing Shariah-compliant digital products and platforms. After mentioning the challenges we face, such as lack of expertise, regulatory gaps, and cultural resistance, she concluded that by adapting modern technology, Islamic finance and ethical business practices involving societies can achieve the balanced development of both spiritual and material well-being.

A Q&A session followed with a discussion on the need for integrating Islamic principles and morality into the economy system in the digital era. The participants discussed the importance of addressing issues such as poverty, wealth distribution, and cybercrime in Indonesia.

Photo: Prof. Dian Masyita delivering her presentation

The second speaker was Dr. Ugi Suharto, the Director of the Center of Excellence in Islamic Finance for SDGs, and a professor of the Faculty of Economics and Business, UIII. His talk was entitled “Conceptual and Semantic Similarities between Interest and Riba in Islamic Finance: Implications for Competitiveness.”

Dr. Ugi Suharto stated that while Riba and interest are often considered to be the same, there are similarities and differences between the two. There can be interest without riba, which is lawful and there can be riba without interest, which is unlawful, and Islamic banking and finance is not interest-free, but rather riba-free banking and finance.

He explained that in dual banking system, Islamic banks are competing with conventional banks, and empirical evidence shows that the profit rate of Islamic banking correlates with the interest rate of conventional banks. However, the perception of society is that Islamic banks are more expensive than the conventional banks, which puts the competitiveness of Islamic banks at risk.

He suggested that as the rate of profit has no limit in Shari’ah, while the rate of interest is regulated by the financial authority, Islamic banks could increase their competitiveness by benchmarking their non-ribawi interest rate to the prevailing regulated interest rate, and even lower their profit rate and make their deposit and investment rates higher than conventional banks to be more competitive. He concluded by saying that Islamic banks should grow larger to maintain their competitiveness in terms of the economics of scale.

In the Q&A session, participants discussed the practice of Islamic banking and finance, particularly in countries like Indonesia, Malaysia, and Turkey, and the challenges faced by Islamic banks in competing with conventional banks, particularly in terms of pricing.

Photo: Dr. Ugi Suharto presenting his research

The third speaker was Dr. M. Luthfi Hamidi, Associate Professor and Head of the MA Program for Economics, Faculty of Economics and Business, UIII. He gave a presentation entitled: “Mosques’ Financial Performance During the Economic Downturn: An Indonesian Case Study.”

Dr. Luthfi Hamidi gave a presentation on the impact of the COVID-19 pandemic on mosques’ financial performance, attendance, and sustainability. He presented data from a study conducted on ninety-seven mosques in Jakarta, Indonesia, using a quantitative approach. As mosques receive donations from attendees, it was expected that the shutdown during the pandemic would significantly affect their cash flow. However, he found that while the pandemic significantly affected attendance it did not reduce the mosques’ cash flow, and government subsidies did not affect mosques’ cash flow either. Instead, he found that mosques’ cash flow was significantly influenced by the popularity of their programs, services and associated businesses.

Dr. Luthfi explained that while the pandemic reduced attendance, mosques that shifted to online platforms and diversified their income through services or businesses could maintain their cash flow. In conclusion, he recommended that mosques shift from traditional fundraising methods to online approaches and diversify their income streams.

During the Q&A discussion it was noted that while mosques in Muslim countries receive government subsidies, those in Muslim-minority countries depend on donations to survive. As mosques involved in philanthropy were found to be more successful in the study, and because in Islam, both the giver and receiver benefit, it was suggested that mosques could improve their cash flow by adopting a natural cycle of giving and receiving.

Photo: Dr. M. Luthfi Hamidi making his presentation

In the second session, Ratna Komalasari, a post graduate student in Economics at UIII gave a presentation on “Issues Surrounding the Financial Education and Literacy Agenda in Indonesia.”

She began by describing the definition of financial literacy, from its origins in the 1970s to the current understanding as a combination of financial knowledge, skills, perceived knowledge, and financial behavior. She also highlighted the importance of financial literacy in achieving financial freedom, including having enough money, purchasing health insurance, having emergency funds, increasing income, buying a home, planning for retirement, and donating money. She noted that financial literacy is influenced by geographical factors, personal background, and financial inclusion. She also explained the development of financial education in Indonesia, which has taken three forms: formal education, informal education, and non-formal education. She concluded by discussing the financial literacy and inclusion in Indonesia, as measured by the Financial Services Authority and the OECD.

Photo: Ratna Komalasari Phuc delivering her presentation

The next presenter was Issa Hamadou, a post graduate student in Economics at UIII. He delivered a presentation on “Customer’s Awareness and Perceptions Toward Islamic Banking Products in Non-Muslim Countries: The Case Study of Cameroon.”

Issa Hamadou explained that the majority of banking customers in Muslim-minority countries are not aware about Islamic finance, and do not know about Islamic banking products in detail. He said that this is also true in Cameroon, where Muslims represent just 30% of the population, and the country faces socio-economic challenges, including poverty and low financial inclusion. His investigation concluded that potential customers are only aware of the basic differences between Islamic banking and conventional banks. 45% of respondents had some awareness of Islamic banking, and only 15% were aware of its potential for sustainable finance. He also found that the most influential factors for Islamic banking adoption were religion, followed by an understanding of the advantages and an awareness of its potential regarding SDGs.

He mentioned the need for financial systems that support social equity and environmental sustainability and suggested that promoting Islamic finance as a tool for achieving sustainable development goals could help address this issue. He also proposed policy recommendations such as introducing Sharia-compliant green financing and encouraging the integration of environmental issues, social issues, and corporate governance principles.

In the Q&A session, participants discussed on how to increase awareness and enthusiasm for Islamic banking.

Photo: Issa Hamadou presenting his research

Next, Hanifia Ihza Manila, a post graduate student in Economics, at UIII, delivered a presentation entitled, “Islamic Social Finance as a Catalyst for Islamic Economic Growth:Funding Education and Talent Development in Islamic Economies.”

She discussed the role of Islamic social finance, particularly Zakat and Waqf, in supporting education and talent development. She highlighted the potential of these instruments for fostering economic growth and reducing poverty and social inequality, a further demonstrated that Waqf can be a suitable mechanism for higher education, citing the long-term stability and success of institutions such as Al-Azhar University. She also noted the challenges faced by Zakat and Waqf institutions, such as inadequate management expertise, governance, and legal frameworks that can harm public trust and reduce the potential for investment. Moreover, there is a need to increase public awareness about the potential of Waqf and Zakat in funding higher education.

She suggested policy recommendations to strengthen institutional frameworks and promote public-private partnerships. In the Q&A session, discussion touched on the potential of Zakat and Waqf in supporting higher education, with some participants arguing that Zakat should be given directly to the needy rather than being used for education.

Photo: Hanifia Ihza Manila making her presentation

The next speaker was Chubachi Natsuki, a PhD Candidate, of the Graduate School of Asian and African Area Studies at Kyoto University. He gave a presentation entitled “The Unseen Ties in Indonesian Waqf-based Forests: An Exploration of the Religion's Role in Environmental Justice.”

Chubachi discussed the concept of Waqf in Indonesia, a voluntary endowment made by Muslims for public facilities like mosques, schools, and hospitals. He introduced the fact that, in recent times, Waqf has been applied to renewable energy and forest conservation. His research focuses on how Waqf-based forests are maintained and the benefits anticipated from them. He highlighted the role of the Waqf-based Forest Foundation in managing the assets and beneficiaries, and how different actors involved in the project seek different benefits. Chubachi also addressed the issue of ownership in Waqf-based forests, explaining that the land is initially owned by private individuals who then sell it to the foundation for registration as a Waqf.

In the Q&A session, participants raised concerns about the extensive deforestation for farming palm oil and coffee that occurs annually in Indonesia, and questioned the financial benefits of planting forests, to which Chubachi responded that while there are no direct financial benefits, the act of planting trees is considered a legitimate and rewarding act in Islamic teachings.

Photo: Chubachi Natsuki talking about his research

The last presentation was given by Dr. Ammar Khashan, an Associate Professor of Ritsumeikan Asia-Japan Research Organization, Ritsumeikan University. His lecture was entitled “Establishing a Foundation and a Methodology for Islamic Economics Research: Investigating Classical Islamic Resources and Utilizing Philological Studies.”

Dr. Ammar discussed the importance of Arabic language in understanding Islamic economics and finance. He emphasized that the Arabic language is crucial for Islamic researchers and scholars to derive legal opinions about any subject, as it is the language chosen for the revelation of Islamic teachings. He gave many examples from the Quran and Hadith literature to support this. He also highlighted the significance of understanding the origin of language and the linguistic placement of Arabic. He pointed out the importance of considering the original meaning of terms and concepts in Arabic to prevent a gradual shift away from the intended concepts. As an example, he gave the concept of the term “Takaful,” which is widely used today when referring to Islamic insurance in general, while in its original meaning at the time of the revelation it meant mutual guarantee or solidarity. He mentioned that some say that the Arabic terms ḥalāl and ṭayyib (lawful and good) are synonymous, while others distinguish between them. Dr. Ammar also referred to the confusion over the use of the term “Riba” which is commonly interpreted as interest, but which in the application of the Shariah refers to specific types of prohibited transactions involving interest. It is clear that the correct application of these terms is very important in modern contexts, especially in the halal industry. He emphasized the legal maxim: "Consideration in contracts is given to purposes and meanings, not to words and forms," which is important in the application of Islamic jurisprudence in modern transactions.

Dr. Ammar proposed that for the consistent development of research that conforms to the original intentions, Islamic economics scholars and researchers should return to original linguistic and Shariah meanings, to ensure that modern economic practices align with the original Shariah objectives.

The Q&A session touched on several examples of Islamic Economic instruments and their correct interpretation, and it was agreed that a correct understanding of the meanings will certainly advance the progress of Islamic economic studies for the benefit of humankind.

Photo: Dr. Ammar Khashan presenting his research

Discussion and Closing Remarks
Finally, in the closing remarks the participants mentioned what they considered were the important next steps. Professor Yasushi Kosugi expressed the desire to continue fostering collaboration between Ritsumeikan University and Universitas Islam International Indonesia and in this context, Dr. Luthfi Hamidi stressed the need to promote research on Islamic economics and finance, particularly in relation to SDGs while Dr. Ugi Suharto wished to continue research on the conceptual differences between interest and riba in Islamic finance.

In conclusion, it was decided that the UIII and AJI research teams would collaborate on developing a Glossary of Islamic Banking in several languages. All participants should consider the integration of Islamic principles and moral values into economic development and digital transformation. For consistency, researchers should focus on the classical linguistic and Sharia foundations of terms and concepts in Islamic economics, and all participants should explore ways to increase public awareness about Islamic finance and economics. Furthermore, researchers should investigate the potential of Islamic social finance in supporting education and talent development. Finally, all the participants agreed to continue fostering academic collaboration and knowledge sharing in the field of Islamic economics and finance.

Photo: All participants at the workshop

We extend our deepest gratitude to the AJI organizers, the exceptional speakers, and all participants who contributed to our international workshop and made it a success.