Amid Indonesia's enormous potential as the world's most populous Muslim-majority nation, a number of paradoxes continue to shadow the development of its Islamic economy. This reality took center stage as Prof. Dr. Anggito Abimanyu, M.Sc., Chairman of the Board of Commissioners of the Indonesia Deposit Insurance Corporation (LPS), delivered the keynote address at the National Working Meeting (Rakernas) of the Association of Islamic Economics and Business Faculties (AFEBIS), held at The Alana Yogyakarta Hotel & Convention Center on Monday (15/6/2026).

Under the theme "The Paradox of Islamic Economics in Indonesia," Prof. Anggito invited the leadership of Islamic Economics and Business Faculties (FEBI) from Islamic higher education institutions across Indonesia to engage in critical reflection on the trajectory and future of the national Islamic economy.

Opening his remarks, Prof. Anggito recalled the early process behind the establishment of the Faculty of Islamic Economics and Business at UIN Sunan Kalijaga. He recounted that the idea was first discussed at the university senate level in 2011 and came to fruition in 2012. As one of those involved in developing Islamic economics education in Indonesia, he considered the establishment of FEBI a strategic step toward building a stronger scholarly foundation for Islamic economics and finance within Islamic higher education institutions.

He acknowledged that FEBI's achievements over the past decade deserve recognition. However, he noted that these successes are not yet sufficient to address the major challenges still confronting Indonesia's Islamic economy, and that more progressive and innovative breakthroughs are needed for universities to make a more meaningful contribution to national economic development.

In his presentation, Prof. Anggito identified several paradoxes still present in the development of Islamic economics and finance in Indonesia. He pointed out that Indonesia has a population of approximately 277 million, with more than 85% being Muslim. This immense social capital should serve as a strong foundation for a world-class Islamic financial industry. Yet in reality, the national Islamic finance sector accounts for only around 12 percent of the total national financial system.

A similar situation exists in the Islamic banking sector, which currently holds only around 7% of total national banking assets. Conventional banking remains dominant, while the Islamic banking industry has yet to grow at a pace commensurate with the scale of Indonesia's Muslim market potential.

Another paradox can be seen in the management of Hajj. As the country with the world's largest number of Hajj pilgrims, Indonesia holds enormous economic potential through the management of Hajj funds. Yet a significant portion of these funds still flows abroad to finance various Hajj-related services, meaning the economic benefits generated have not been fully optimized to strengthen the domestic economy.

A similar phenomenon affects the national halal industry. The large number of Muslim consumers has not been matched by adequate strengthening of halal production capacity and supply chains. According to Prof. Anggito, this reflects a situation in which vast market potential has yet to be translated into a highly competitive economic force.

Beyond the real economy and Islamic finance, Prof. Anggito also highlighted the rapid pace of financial technology development. Digital innovation, including cryptocurrency assets, is evolving far more quickly than regulatory readiness or the development of Islamic financial instruments. In Indonesia, the volume of crypto transactions and asset ownership continues to rise, while sharia-compliant crypto instruments remain in the early stages of development.

He noted that financial technology presents both opportunities and significant challenges for the Islamic economy. Without a swift and well-calibrated response, Islamic economics risks falling behind as the global financial sector undergoes increasingly dynamic transformation.

In the field of education, Prof. Anggito emphasized the persistent gap between industry needs and the human resources produced by universities. Demand for professionals in the Islamic economics and finance sector continues to grow, yet the number of graduates with the requisite technical competencies and job readiness remains relatively limited.

He therefore urged all FEBI institutions to strengthen their academic quality, expand internship programs at Islamic financial institutions, and build closer collaboration with industry. Universities, he argued, must be capable of producing graduates who not only understand the principles of Islamic transactional law (fiqh muamalah) but also possess professional skills relevant to the demands of the modern industry.

Prof. Anggito further reminded the audience that the financial sector moves continuously in response to market needs. New products and innovations emerge rapidly, while educational institutions and regulators often require more time to adapt. In this context, curriculum renewal, the strengthening of applied research, improved Islamic financial literacy, and the development of sharia standards and governance must remain shared priorities that universities and stakeholders continue to pursue.

Closing his address, Prof. Anggito called on the entire AFEBIS community to work together to bring an end to the paradoxes still hampering the development of Indonesia's Islamic economy. Indonesia, he said, lacks neither Muslim population nor Islamic market potential, what is needed is a more serious, consistent, and substantively oriented strengthening of the ecosystem.

"Islamic economics must not remain at the level of symbolism alone but must be capable of delivering real solutions that bring broad benefits to society and strengthen the competitiveness of the national economy on the global stage," he asserted.

Through synergy among universities, regulators, industry, and the wider community, he expressed optimism that Indonesia's vast Islamic economic potential can be converted into an inclusive, competitive, and sustainable economic force. (humassk)