The Principles of Islamic Economics and their Implementation in Indonesia

Abstract

Indonesia has experienced significant economic growth, especially in the 1990s when Indonesia was considered as one of the Asian tigers with economic growth of about 7 percent per year though in mid-1997, economic crisis hit this country and some countries of Southeast Asia and East Asia, which is influenced by various factors both external and internal ones. As a result of the crisis storm, in macro scale the economic growth in Indonesia dropped sharply to 4.9 percent in 1997 and even up to minus 17.13 percent in the third quarter of 1998. Recently, Indonesian economic growth reached 5.02 percent in 2016 and it is predicted the growth will be 5.1 percent in 2017. This article focuses on the study of the implementation of the principles of Islamic economics in Indonesia, as a country that is predominantly Muslim. In order to be free from various crisis such economics, moral, social, and cultural crisis, Indonesia's economic growth must be accompanied with the implementation of Islamic economics principles, namely the implementation of Tawhîd principles in economic activity, the implementation of Khilâfa principle as a task and role of man on earth, the applying of fairness and balance principle so that social welfare for all Indonesian people can be formed, the implementation of equitable principle in order to avoid economic inequality of Indonesian people, and the application of work and productivity principle to achieve economic welfare for Indonesian people