thank you rri [Music] esteemed guest ladies and gentlemen it is our enormous pleasure to have the Minister of Finance Indonesia who have steered Indonesia's economy for the last decade marked by strong growth fiscal Prudence structured structured growth to deliver her future address Her Excellency IU mulani Indra [Music] thank you very muchal very good morning to all of you his Excellency uh Johan m mud Maran the Secretary General of Treasury Excellency D Abdul Rashid gaur governor of bangara Malaysia Excellency SRI Aang ad bin Hussein chairman of Security Commission my dear friends D tansri yakop and all uh other esteemed speaker guests ladies and gentlemen it is it's really a big pleasure for me to be here to share the Indonesia experience with expressing the Gratitude to Allah Almighty for his Blessing that we can convene in this event in quala lumur Malaysia certainly also a privilege for me to be able to share our experience today esteemed colleague uh ladies and gentlemen as we are all know that the world is still actually suffering from the scarring effect the post cid9 pandemic today we also still confronting with persistent global economic challenges and heighten uncertainty the IMF latest projection warn of stagnation Global growth in the coming years again also the backdrop of global political uncertainty and tension conflict in the regions such as Ukraine and in Middle East accelerated disruption in Global Supply chains this also contributing heightened commodity price Vol volatility and further creating economic instability Our concern on economic management also on the environment of hire for longer with a higher inflation rate especially in the Western Country that will delay the Federal Reserve rate cut this year this triggering a stronger US dollar phenomena and subsequent Capital outflow especially from developing as well as emerging country and that create a pressure on a currency depreciation these are all the global environment that we are all operate it is not an easy Challenge and especially for the southeast Asia we are all always reminded the 1997 asan financial crisis that debilitated Indonesia economy and also creating huge momentum of Reform domestically with all these immediate challenges structural CH shift especially on the geopolitical and also additional or in this case lingering challenges such as climate change rapid technology advancement especially on the digital technology and artificial intelligent as well as demographic shift aging population that could stren the Outlook of the global economy addressing these multifaceted issues demand a concerted effort from policy makers across diverse sectors this is not only a struggle to maintain a healthy inclusive economic growth but how we are going to also make sure that the quality of growth also sustainable and just these are all the value that align well with the Islamic value over the past decade the Halal lifestyle Market has expanded from 1.62 trillion Us in 2012 to $2.29 trillion Us in 2022 this is despite a weak global environment Islamic Finance thrives total Islamic Finance asset in 2023 reported to reach $4.5 trillion us with 11% yearly growth consists of more than 1,800 Islamic Finance institutions this illustrate the enormous potential for Islamic Finance to continue to develop in this regard we need to see how the global Community especially in the Islamic Global Community how we are going to be able to move this Islamic Finance development back to its core but we also recognize many of the Muslim countries are still facing with the basic poverty their policy space a very limited and they are also facing with fragility due to the political instability and security concern on the other hand we also welcome the transformation of the economic and financial of many of the Muslim countries in Middle East Saudi Arabia UAE Qatar and here also in Malaysia this this country conducted a comprehensive reform to further their development and to become a hub for not only economic activity but also Financial activities this will provide a more Diversified Central Hub Financial Hub globally which is going to create more stability depending on or comparing to just depending on a certain small Hub which is dominated by the Western Country so it is interesting to see where the Islamic World fit in this narrative ladies and gentlemen in the various episode of global economic upheavals Indonesia economy has proven remarkably cilian from the death of the Asian finan financial crisis 9798 Indonesia starting to rev domestically many of our institution political legal and also the economic institution with that kind of Reform we were able to overcome Global financial crisis 2008 2009 following by the taper tantrum that Indonesia again faced with the risk of fragility we were even has been put as a fragile 5 in 2013 and then the world faced with a very big shock a threat to humanity but also for the economic and Financial in the form of pandemic covid-19 during all those episode Indonesia has consistently demonstrated our capacity to rebound and also at the same time continue reforming our economic framework and institution and pushing further economic transformation today with the uncertainty of the global economic situation Indonesia maintained a robust growth trajectory exceed exceeding 5% from more than one decade we also have potential huge domestic demand that can provide caution when the global environment are weak our economy continue to thrive with a household spending showing resilient and inflation under control at the level which is Comfortably low the dividend of Indonesia's strong economic performance extend beyond more than just statistic the unemployment has been reduced to 4.82% in 2024 and poverty rate after sharp increase due to the pandemic has been now lower with the extreme poverty hopefully will reach 0% by the end of 2024 this positive indicators not only fuel consumer demand but also create a momentum of growth and the trust to the inclusivity and the quality of the growth in Indonesia but we are all facing also a challenging environment declining commodity prices and subdued global economic situation have also created a pressure for the Indonesia economy our trade balance with China for example now recorded a surplus in the first time in 2022 2023 because of the transformation of our economy especially from the downstreaming mineral we also in this case maintain Trade Surplus for 47 consecutive months since May 2023 this is despite the global economic environment which is becoming weaker and weaker because of the disruption and geopolitical tension in Indonesia managing this macroeconomic as well as quality of the economic growth through our prudent fiscal policy a sound fiscal discipline has been successfully returning our deficits which is temporarily relaxed during the pandemic cid9 since Indonesia financial crisis 9798 we adopted a prudent fiscal policy in which ruling for fiscal deficit not exceeding 3% of our GDP in current fiscal year and the debt to GDP ratio not to exceed 60% of GDP but due to the covid-19 in which all economic activity has been halted we were forced to abandon this principle but with a certain discipline of allowing this fiscal deficit exceeding 3% for only 3 years we were able to return to the below 3% deficit only after 2 years this is just to show that our discipline as well as commitment to make sure that fiscal instrument can play an effective role as a development instrument but in a sustainable healthy accountable and credible way we also in this case continue deepening our fiscal Tools in this case the government bonds which also face a huge pressure with the higher for longer are able to actually perform really well The Confident of the investor on government bonds demonstrated by our yield which is continue at the level of tightening spread with the US Treasury we are maintaining an optimistic outlook for Indonesia economic growth as well as fiscal management our growth projected at around 5.1% this year and for the next year we will continue also maintaining the level of growth above 5% last year our fiscal performance is even stronger than before the pandemic the deficit at the level of 1.62% of GDP which is much much lower and below the 3% cap and the government debt to GDP ratio at the level of 39 9 38.9% the Indonesia economic performance and our resiliency is supported by number of substantial reform in the past 20 years since the Indonesian financial crisis 1998 we strengthen our economic and financial governance through regulatory framework including reforming in the financial sector introducing Central Bank Independence establishing Deposit Insurance Company establishing financial sector Authority implementing B bankruptcy law establishing anti-corruption body reforming State Finance regime and also reforming fiscal including the FIS decentralization even during the pandemic covid-19 we conducted substantial reform so a big shock like pandemic is not halting our effort to continue reforming our economy we pass a number of legislation which is very important like the Omnibus law on job creation the harmonized tax legislation and also introducing a much more Progressive Performance Based fiscal relation with the local government just early this year we also passing a milestone financial sector reform in a comprehensive way as a country Indonesia have different resources and skills but all of us have the same right to be Prosper Indonesia has the aspiration to become a high income country inshallah when we celebrating 100 Years of our independence in 2045 but to achieve those goal we understand that the importance of all resources including the potential of Islamic Finance can play a very important role we also have developed necessary legal and Regulatory framework Market deepening and Innovation on our instrument since 1989 followed by 2006 and 2009 we've already introduced in our religious Court law with the element of this economic and Islamic Finance to settle the dispute banking law and Islamic banking law has been introduced 1992 and revised in 1998 Capital Market law has been introduced in 1995 Islamic Sovereign Bond Law has been passed in 2008 zakat management law in 1999 wakaf law 2004 and insurance law Islamic insurance law 2014 recently as I mentioned earlier we just enacted financial sector Omnibus law in 2023 this Omnibus providing a frame work for a comprehensive Financial reform including in this case Financial Islamic Financial uh institution as well as instrument Islamic Finance infrastructure development and instrument has been developing new innovation has been also being introduced Green sukuk in this case has been introduced both for the institutional as well as retail we also introduced KAS wakaf Ling sukuk in this occasion I would like to make a case on how the Indonesia government developed a very good Sovereign sukuk Market at that is significantly contribute to the advancement of Islamic finance and support our development since 2008 that tansri yakob is actually my colleague since I was Finance Minister a long long time ago Indonesia has developed and issue the first time 170 million US dollar both in billion US dollar both in domestic and Global Market the current outstanding is 96 billion US much of our Indonesia issuance is a Project based sukuk and project financing suku it is now even become popular that many Ministry is now asking to actually develop their project using this project financing suku this helped a lot in developing Financial infrastructure Project based on the sah law the nature of sukuk that directly link to the financial instrument and real sector fits the financing need of our infrastructure development as a big country and in the past decade under President jooi we have built a lot of infrastructure but this is just the beginning Indonesia need to continue building a lot of infrastructure project that will also fit with our aspiration to become a high income country on the climate agenda we also developed the green sukuk framework in 2018 and also introducing sustainable development goal Bond or sukuk in 2021 this instrument allowing us to issue various thematic bonds such as green blue social and sustainable Bond just to give you the update that we have issued $6 billion US green suku globally in which equal and also 44 billion US doll in the domestic Market this proceed of the issuing of the green Bond used to finance various climate adaptation and mitigation project in various sector including renewable energy sustainable Transportation Waste Management water management and Green Building the need for Indonesia to finance our nationally determined contribution that is allowing us to also reach zeroc carbon emission is around 287 billion US in this case the sukuk can and should play a very important role our Global sukuk has attracted a very Broad in investor base this is not only Islamic investors but also conventional investors across the world for example our Islamic sukuk investors 30% is actually those which is coming from the Islamic investors while 70% goes to the conventional investors that's showing the attractiveness of our sukuk including in the United States and Europe we are also successfully developing retail suku with the middle class growing very rapidly in Indonesia and the aspiration to implement the Islamic value in their daily life many household especially younger generation yearning for the fincial instrument and investment today we are having 28 billion US doll retail sukuk with more than 1 million individual investors in the context of combining social Islamic Finance with Islamic commercial Finance Indonesia also issue KAS wakaf luku since 2020 the cwls was actually introduced in 2018 during the IMF W Bank annual meeting in Bali but the implementation started in 202 currently the cwls has reached approximately 65 million equivalent with more than 3,000 vaka contributors through this C wakaf link sukuk private c wakaf will be Consolidated and optimized to finance various social project and activity including the development of assets such as madrasa MOS but also Health Clinic Islamic boarding school and other social infrastructure we also Finance non-physical social program such as Social Service program for Orphans and the poor free health services for the poor and economic empowerment for lowi income earners and other social program so what is going to be the future of Islamic economic development in today's interconnected World forging mutual and stronger partnership are critical Islamic economy development mainstreaming is not about just leling which one is halal and which one is Haram it's much more than that it's about creating the structure of sustainable economy with the core value of Islam the Surah Al bakar verse 11 and when it was said to them do not cause damage on the face of the Earth they reped indeed we are the one who make Improvement at the heart of the Islamic value and the Islamic economic value it is the spirit of promoting just and Equitable both in the wealth distribution RIS sharing and ethical investment this principle not only align with sustainable development goals but also provide robust Foundation of good governance creating trust credibility and accountability with that Foundation economic resiliency and soci social justice can be established in this regard Islamic economy plays significant roles as a significant enabler of global social economic prosperity and also equality this issue now become a threat for all Society in the world Islam and the economic Islam should become an inspiration for solution we believe that Islamic finance and conventional Finance could move Hand by hand as we Illustrated in respect to the investor base of our sukuk earlier we believe that the Merit of Islamic Finance can and should perform the development goals and become an effective reliable instrument for all Society in the world that Islam is ramatan alamin Quran underscore environmental stewardship cautioning against corruption and destruction Islamic Finance exemplify by Green sukuk align with this teaching by funding sustainable quality project with good governance transparency in the spirit of Islamic value aligning this teaching by funding sustainable project promoting ethical investors and investment as well as preserving the Earth Resources currently globally we are all trying trying to adopt ESG environmental social and governance this is not new at all for Islam Islamic value is actually about those three environment social and good governance so the Muslim word should fulfill this value in their daily life including in advancing our Economic Development to create a better and just world the ideal Islamic economy promote social justice Fair distribution prohibit the interest based excessive and exploitation it is about ethical conduct it ensure social welfare not just labeling it but through core value that can and should be tested in their action the underlying sharah principle are aligned with the goals of any society who would like to build a sustainable social as well as good governed Society this principle should also guide us to be able to continue implement the Islamic value in promoting Islamic Finance globally we need more collaboration and cooperation collabor collaboration and cooperation not only Foster greater Financial inclusivity but also as a catalyst for global economic stability and prosperity fully crucial is the reinforcement of the network comprising academics practitioner Collective expertise and innovators in developing the Islamic economy going forward in this regard Indonesia also have a strong commitment to strengthen Islamic Development Bank by increasing our share in the Islamic Development Bank so that Indonesia experience as well as our development whether this is a good or bad can be shared so that many other Islamic country can learn we also in this case commit to push the Islamic Development Bank to optimize its capacity providing Saria based financing especially for the infrastructure Ure and economic development project which is dly needed for many of the Islamic countries this also include organizing training program and supporting educational institution to increase the expertise in Islamic Finance in return we hope that it can trigger a competent professional human resources in the economic finance and economic uh Islamic economic Community dear colleague ladies and gentlemen in closing navigating the reform will require and continue implementing and deepening the structural reform will require a concerted effort by all stakeholder this is not only the job of government it can be done if the society is supporting it The credibility and Trust From the stakeholder including financial institution regulatory body academician and Scholars as well as private sector are very critical by working together we can cultivate a Synergy and strengthening our ecosystem that not only upholding the Islamic principle but also Drive sustainable economic growth I do hope that the Indonesia experience can provide you with additional perspective as well as wisdom how we are going to continue proving that Islam is truly ratan wasam [Applause] thank you iani for the feature address [Music]