President Jokowi wants Jakarta to become world sharia financial center

President Joko Widodo (Jokowi) has said Jakarta should aim to become the global sharia financial center as Indonesia has the worlds largest Muslim population.

“Ive ever conveyed (it) to chairman of the Financial Services Authority (OJK) that it is natural if we make Jakarta as the world sharia financial center,” Jokowi said, at a gathering of stakeholders related to the eight-year issuance of state sharia-based bonds at the state palace here on Friday.

According to Jokowi, he had heard that an effort to make Jakarta as the world sharia financial center was being discussed by the OJK.

“We have the potential and power, why we do not use (that), not only sharia financial services such as banks, insurance companies, I think many other things that can be developed, including sharia travel, and halal restaurants,” the president pointed out.

The president stated that Indonesia should focus on its great market potential.

“It will trigger economic growth in our country and eliminate issues that often appear such as rumors of 10 million to 20 million Chinese laborers coming into Indonesia, while actually it was only 21,000 of them,” he explained.

On state sharia-based bonds for the national state budget, the president said that the essence of the budget is that it will be used for the welfare of the people, meaning to eradicate poverty, reduce unemployment, and social inequality.

“Therefore, the government uses various ways to strengthen the state budget such as strengthening the tax base for instance through the tax amnesty, state sharia securities (SBSN) or the state bonds,” he disclosed.

The president also declared that Indonesia should be proud that it is the issuer of the largest state bonds in US dollars.

Up to November 2016, the issuance of SBSN in the international market reached US$10.15 billion with outstanding US$9.5 billion.

“This means that we have huge potential and it plays an important role in the development and improvement of the welfare of the Indonesian people,” he cited.

The president further said that Indonesia has a variety of sharia-based bonds (Sukuk), so there are many alternatives to invest.

Jokowi also pointed out that in 2015 and 2016 as much as Rp20.8 trillion of Sukuk has been used to construct railway lines, including bridges that are beneficial for the people.

“Then (the sukuk) is also to construct facilities of higher learning institutes and rehabilitate various buildings including those for preparation of Hajj Pilgrimage rituals” Jokowi added.