LAST June 4, 2015, Al Qalam Institute of the Ateneo de Davao University, in partnership with the Peace and Equity Foundation (PEF), Indonesian Consular Office-Davao, and the Faculty of Economics of the Universitas Islam Indonesia (UII), conducted the first Philippine Shari’ah - Compliant Social Enterprise (PSCSE) Forum with a theme: “Shari’ah Economics, New Paradigm.” The Forum discussed principles and issues on Shari’ah economics and Shari’ah-compliant financial transactions.
Two speakers from UII were invited to present the current topics on Shari’ah Economics and Finance. The first speaker was Prof. Priyongo Suseno, M.Ec. Prof Suseno is a permanent lecturer at Faculty of Economics, Islamic University of Indonesia. He earned his Master on Islamic Economics Banking and Finance at University of Loughborough, United Kingdom, 2003. He graduated BA, Economic and Development Studies at Gadjah Mada University last 1994. The topic he presented was entitled, “Shari’ah Economics in Indonesia: Challenges and Lessons Learned”
The second speaker was Prof. Agus Widarjono, Ph.D. He is the director of Faculty of Economics, Universitas Islam Indonesia. He graduated Bachelor of Economics in Major in Economics at Gadjah Mada University, Yogyakarta, Indonesia last 1991. He earned his Master of Arts in Economics at Western Michigan University, Kalamazoo, Michigan, 1999 and Doctor of Philosophy at Oklahoma State University, 2012 with a Major Field in Agricultural Economics. The topic he presented was, “Agricultural Economics and Shari’ah Prospects.”
The forum had the following objectives: a. to discuss briefly the Shari’ah Economics in Indonesia: Challenges and Lessons Learned; b. to discuss briefly the concepts and principles on Agricultural Economics and Shari’ah Prospects; c. to share and discuss the concepts of Shari’ah social enterprise; to discuss trajectories and recommendations.
The participants came from different sectors and regions in Mindanao.
For a brief background, the forum was anchored on the rise of concerned individuals with consideration on Islamic principles practiced in all aspects of life leads to an increasing intention to implement such principles in business activities.
Our studies have shown that there is a need to set Islamic principles and motivational process with initiatives of social enterprise for peace building. Identifying the appropriate Islamic institutions (such as Islamic banks, Islamic microfinance institutions, and/or Business Development Services) should provide a vast space of accessibility to people in Mindanao who are now slowly engaging their communities for peace and development. The current peace process with the Bangsamoro people on the Bangsamoro Basic Law provides for an opportunity in crafting legal mandate for Shari’ah banking and finance.
In a policy document, Mindanao 2020, presented by Mindanao Development Authority, it stated a new paradigm of looking at the problem in Mindanao. It clearly made mentioned of the issue on “Perceived Suppression of Islamic Practices, Traditional Customs and Indigenous Institutions” as one of the main causes of problems in Mindanao. To quote the MINDA 2020 output: “Numerous analyses and prescriptions have been put forward to reconcile these extremes. In the 1990s, it was a popular notion that poverty lies at the root of the Mindanao peace and development challenge, prompting interventions that were dominantly economic in nature. Without underestimating the destructive impact of poverty, historical injustice is now commonly regarded as the underlying root of the Mindanao challenge. This injustice has come in various forms: social, political, economic, cultural and environmental. Thus, attainment of lasting peace and development in Mindanao must hinge on addressing and redressing these various forms of injustice.”
We believe that Shari’ah finance and banking provides an alternative mod for wealth generation and equitable distribution of Mindanao’s resources.
At the local context, the former Moro combatants are building their own resources to ensure capability for exchange in line with Islamic norms of mutual interdependence among related economic concerns. This relationship can be viewed as a form of collective investment strategy for institutional creation among any given Muslim society and as one of the strategies to empower them and their communities.
Indonesia’s experience in Islamic finance and Shari’ah economics is based on the market and social capital of the country. Their vast experience in the field can provide a framework for Mindanaoans. The speakers in the forum shared the current community-based Shari’ah compliant finance in their country. They called this as BMTs (Baitul Mal waTamwil).
BMT is a typical Islamic financial institution from Indonesia. This is a unique set up of Islamic finance because it is not under the monetary authority but under the cooperative department. BMT is a cooperative that caters the needs of the community.
The initial concept of the BMT begins from Shari’ah Thesis, “Can the concept of Maal (social and religious obligations) and Tamwil (business) combine into one?” Based on our experience, both are complementary.
Baitul Maal Wat Tamwil actually two institutions into one, the Baitul Maal and Baitut Tamwil, which each has different principles and products despite having a close relationship in creating an economy that is equitable and dynamic.
Furthermore, what makes this set up Shari’ah compliant, aside from the Shari’ah transactions, is the Baitul Maal having principles as a collector and distributor of zakah, infaq, and Sadaqah. Baitul Maal accepts and seeks funding in the form of zakat, infaq, and charity, and also receives funds in the form of donations, grants, or endowments and social funds. Thus, it is not mainly for profit alone.
Al Qalam is committed to conduct series of information, education, and campaign regarding Shari’ah Economics and Finance. Within this year, we are targeting to expand our peoples organizations, cooperatives, and NGOs all over Mindanao that will engage in this new paradigm in business and agri-business enterprises.