Can Islamic Economics Deliver Good for All?

Indonesia is well positioned to benefit. The State of the Global Islamic Economy Report 2025/26 ranks the country fourth globally. Indonesia leads in modest fashion and holds prominent positions in halal food, media and recreation, pharmaceuticals and cosmetics. Domestically, its halal value chain grew 5.5% year-on-year in the second quarter of 2026, outpacing national economic growth.

These figures establish scale. They do not establish impact.

The harder question is whether growth in halal consumption, certification and Islamic finance is improving the productivity and incomes of the enterprises, workers and communities behind it. That question should define the 13th Indonesia Sharia Economic Festival, or ISEF 2026, held in Jakarta from October 14 to 18 under an idea that is both simple and demanding: “Good for All.”

Initiated by Bank Indonesia in 2014, ISEF is an annual platform designed to connect Indonesia’s halal industries, Islamic financial institutions, social-finance organisations, government agencies, businesses, academics and international partners. Rather than functioning solely as a trade exhibition, it combines policy dialogue, business matching, capacity building and public education to strengthen the country’s Islamic economic ecosystem.

ISEF is therefore more than an annual gathering. It offers Indonesia an opportunity to test whether the values of Islamic economics can be translated into measurable economic and social outcomes.

Growth Does Not Tell the Whole Story

Indonesia’s Islamic economy encompasses agriculture, halal food, modest fashion, pharmaceuticals, cosmetics, tourism, financial services and Islamic social finance. Its foundation includes millions of small businesses, Islamic boarding schools and institutions managing zakat and waqf.

Yet the size of an ecosystem does not reveal how widely its benefits are distributed.

Halal certification, for example, protects consumers, strengthens trust and opens access to markets. But after receiving a certificate, a small enterprise may still struggle to purchase machinery, maintain consistent quality, secure raw materials, fulfil larger orders or enter formal distribution networks.

Certification changes the formal status of a product. It does not automatically change the economic position of its producer.

The same distinction applies to Islamic finance. Asset growth is important, but the development test is whether financing reaches productive enterprises that remain underserved, particularly businesses lacking collateral, formal records or the capacity to navigate complex application procedures.

Indonesia therefore needs to look beyond sectoral expansion. It should also measure economic access and business progression.

Economic access becomes visible when enterprises obtain financing, mentoring and market connections. Business progression occurs when businesses increase revenue, invest in equipment, recruit workers, secure repeat contracts and enter formal retail or export markets.

From Festival Connections to Business Outcomes

With more than 1,000 halal-industry participants and over 100 activities, ISEF 2026 has the scale to connect enterprises with financial institutions, buyers, government agencies and international partners. Its programme includes business matching, exhibitions, pesantren business forums and domestic and international discussions. Bringing these actors into one ecosystem is necessary. Small enterprises rarely scale up on their own.

IN2MOTIONFEST 2026 transforms Indonesian wastra into globally competitive modest fashion, expanding opportunities for artisans, designers and creative enterprises. (Source: Bank Indonesia website)

But ISEF’s most meaningful results will emerge only after the exhibition halls have closed.

How much pledged financing is eventually disbursed? How many business meetings generate realised and repeat orders? How many participating enterprises increase production, recruit workers or enter retail and export markets?

Transaction commitments remain useful, but they measure intentions rather than outcomes. ISEF could close this measurement gap through an impact dashboard that follows participating enterprises six and twelve months after the festival. Based on short, anonymised surveys, the dashboard could track whether approved financing is actually disbursed, business meetings are converted into contracts, and participating enterprises increase revenue, production and employment. It could also record entry into formal retail or export markets and whether businesses remain operational after a year.

Values Must Become Governance

ISEF 2026 also introduced three initiatives aimed at strengthening the institutional foundations of the Islamic economy.

The first is the Islamic Financial Market Code of Conduct, developed by market associations together with Bank Indonesia and the Financial Services Authority to strengthen integrity and efficiency in Islamic financial-market transactions.

The second is the Zakat Core Principles Implementation Index 2.0, developed by BAZNAS and Bank Indonesia. The updated index strengthens the risk-management dimension in the assessment of zakat governance.

The third is an international scholarship programme financed through Islamic social funds. The programme is designed to develop human capital while encouraging the productive use of zakat, infaq, sadaqah and waqf.

These initiatives matter because Islamic economics is fundamentally an economy of trust. Formal compliance alone cannot sustain that trust. An Islamic financial market should demonstrate integrity in everyday transactions. Zakat should be assessed not only by the amount collected and distributed, but also by whether recipients become more economically resilient. Productive waqf should be evaluated through the lasting services, income and opportunities it creates.

A Global Measurement Challenge

Indonesia’s experience offers a broader lesson for the global Islamic economy. Countries developing halal industries often measure progress through consumer spending, certified products, financial assets and investment commitments. These indicators reveal scale, but cannot substitute for evidence of productivity, income growth and social mobility.

Other Islamic-economy markets face the same challenge: connecting certification with production, Islamic finance with the real economy, social finance with lasting economic mobility, and digital access with genuine inclusion.

Digital platforms can connect producers with distant buyers and expand access to finance. But an online presence does not solve inadequate production capacity, weak financial records or limited business skills.

Technology expands the doorway. Financing, mentoring, literacy, consumer protection and institutional trust determine whether businesses and communities can move through it.

Making “Good for All” Measurable

Indonesia has already demonstrated that its Islamic economy can grow. Its global position, domestic market and expanding halal value chain provide ample evidence.

The next test is more demanding.

Halal certification must connect with financing and markets. Islamic finance must connect with productive activity. Zakat and waqf must connect with measurable social progress. Digital innovation must remove actual barriers to participation.

Although Islamic economics is rooted in Islamic principles, fair financing, safe products, responsible market conduct and productive social funds are public goods. Their benefits need not be confined by religious identity.

“Good for All” should therefore become more than the theme of ISEF 2026. It should become the standard against which its programmes, institutions and transactions are evaluated. The final measure is not only how large the Islamic economy becomes, but how many people can say that they grew with it.