MASYARAKAT INDONESIA
5. CONCLUSION
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BIBLIOGRAPHY
Al Azizah, Ummu Salma., dan Muhammad Choirin. 2018. Financial Innovation on Zakat Distribution and Economic Growth. Paper to be presented at International Conference of Zakat 2018, 15-16 November, Universitas Gadjah Mada, Yogyakarta, Indonesia
Al Hammadi, Tahani., and Haitham Nobanee. 2019. FinTech and Sustainability:
A Mini-Review. Available at
SSRN: https://ssrn.com/abstract=3500873 or http://dx.doi.org/10.2139/ssrn.3500 873
Aminuddin, Zanatul Shima., Ummi Salwa Ahmad Bustmamam, Muhammad Khair Mahyuddin., and Salwah Sathiman. 2016. Exploring The Concept of Al-Falah (Success) in Business: An Insight From Muslim Experts.
International Journal of Management, Information Technology, and Engineering Vol. 4, Issue 8, 2016, 23-36
Anshari, Muhammad., Mohammad Nabil Almunawar., Masairol Masri., and Mahani Hamdan. 2019. Digital Marketplace and FinTech to Support Agriculture Sustainability. Energy Procedia 156 (2019): 234-238
Alwi, Achmad Basori. 2018. Pembiayaan Berbasis Teknologi Informasi (Fintech) yang Berdasarkan Syariah. Al Qanun, Vol. 21, No. 2, Desember 2018
Arner, Douglas W., Ross P. Buckley., Dirk A. Zetzsche., and Robin Veidt. 2019.
Sustainability, FinTech and Financial Inclusion. European Banking Institute Working Paper Series 2019/41
Jamil, Nurul Nazlia., and Junaidah Abu Seman. 2019. The Impact of Fintech on The Sustainability of Islamic Accounting and Finance Education in Malaysia. Journal of Islamic, Social, Economics and Development (JISED) Volume 4 Issue 17 March 2019 pp. 74-88
Rappitsch, Cristoph. 2017. Digital Economy and Sustainability. Available at oikos-international.org
Trimulato. 2019. Fintech for Sharia Micro Finance Institution: Qualitative Analysis toward Utilization of Financial Technology in BPRS and BMT. Al-Falah Journal of Islamic Economics available at www.journal.iaincurup.ac.id
Yarli, Dodi. 2018. Analisis Akad Tijarah Pada Transaksi Fintech Syariah dengan Pendekatan Maqhasid. Yudisia, Vol. 9 No. 2, Juli-Desember 2018
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ANALYZING INDONESIA’S DIPLOMACY
IN THE GLOBAL HALAL INDUSTRY COMPETITION 2014 - 2019
Yasmi Adriansyah1, R. Mokhamad Luthfi2
1,2 International Relations Department, University of Al Azhar Indonesia Email: [email protected]
Abstract
This research is driven by the fact that Indonesia is lagging-behind in the halal industry when compared to other countries, both with other majority Muslim- majority countries or even when compared to non-Muslim countries. This condition is contrary to the status of Indonesia as the most populous Muslim country that has the need to guarantee halal products for various commodities.
This research therefore attempts to examine the implementation of Indonesia's foreign policy and diplomacy in the global halal industry competition. The research are also expected to be an input for the formulation of policies on the development of the halal industry, particularly those that are export-oriented and Indonesia's foreign policy and diplomacy in promoting the Indonesian halal industry in the world. This research applies the concepts of Foreign Policy and Diplomacy as the analytical tools that observe and analyze the set of actions in the form of objectives, commitments and directions determined towards multi-actors that have links with the global halal industry in Indonesia. The research uses descriptive qualitative methods with data collection mostly by collecting various policy documents produced by foreign policy makers. The research explains about the map of the global halal industry, Indonesia's foreign policy and diplomacy in terms of the global halal industry in the period 2014-2019, and analyze how actors and policies made or implemented in that period. Finally, the research results show that there were minimum grounds of national halal policy implementation and there were not much policy initiatives from the relevant ministries in regards to how Indonesia compete at the global halal industry.
Keywords: Indonesia, Diplomacy, Halal, Industry, Competition
1. INTRODUCTION
The statement of Bank Indonesia Governor Perry Warjiyo at the end of 2018 at the "Indonesia Shariah Economic Festival" event in Surabaya needs to be treated as a serious concern for Indonesia’s halal industry stakeholders. According to Warjiyo, Indonesia's halal industry is lagging behind when compared to other countries, including to non-Muslim countries. In a straightforward expression,
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Warjiyo stated, "There is no need to compare with Malaysia, (Indonesia’s halal industry) is far away. With the United Arab Emirates, (Indonesia is) also far away.
We are even lagging behind to Australia” (Tempo 2018).
Part of the essence that can be drawn from the statement of Bank Indonesia governor above is that Indonesia as a Muslim-majority country has not become an important actor in the global halal industry. Indonesia has so far remained only an international market and has yet become a significant market player. In the context of halal food and beverage consumption, for example, Indonesia ranks as the top consumer country. The ASEAN Post (2018), which cites the 2017/2018 Global Islamic Economic Report issued by Thomson Reuters, states that in 2016 Indonesia ranked first in a Muslim country with the highest food and beverage expenditure, amounting to USD 169.7 billion. But as an exporter of halal food products, Indonesia has not recorded significant value. According to Rafiuddin Shikoh, CEO of Standard Dinar, Indonesia is the largest exporting country to the Islamic Conference Organization (OIC) countries, but for the global halal market share Indonesia only controls 3.3 percent of the market (The Insider Stories 2018).
The question that can then be asked regarding Indonesia's low penetration in the global halal industry market share is: what and how have Indonesia's foreign policy and diplomacy been carried out? The administration of Joko Widodo (Jokowi), in this regard is represented by the Minister of Foreign Affairs Retno Marsudi, in 2014 has declared that one of focuses on its foreign policy is economic diplomacy (Marsudi 2015). This means that the Jokowi government has, still is, and will continue to strive to strengthen diplomacy in the economic field, both in terms of increasing exports, investment, and tourism.
The low dominance of Indonesia in the global halal market share indicates that the performance of Indonesia's economic diplomacy is still far from optimal.
This should have been a concern of any relevant halal stakeholders, even though foreign strategies and policies related to economic diplomacy are under the leadership of the Minister of Foreign Affairs.
Departing from the above, we formulated the main question of this research as follows: How have Indonesia's Foreign Policy been made and Diplomacy been conducted in 2014-2019 against the Global Halal Industry Competition?
The purpose of this research is to examine the map of the global halal industry, Indonesia's foreign policy and diplomacy in terms of the global halal industry in the period 2014-2019 and analyze how actors and policies made or implemented in that period. Another purpose of this research is to be an input for the formulation of policies on the development of the halal industry, particularly those that are export-oriented and Indonesia's foreign policy and diplomacy in promoting the Indonesian halal industry in the world.
This study limits the problems in particular the 2014-2019 time period. We chose this time period because it coincides with the five years of Jokowi's government. As stated at the beginning of this paper, the Jokowi administration has declared Economic Diplomacy as one of the priorities of Foreign Policy in the period of its leadership. We assume that the policy in facing global halal industry competition is an integrated part of the Economic Diplomacy policy carried out by the administration.
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This research takes place in Indonesia, especially toward the government institutions related to the formulation, implementation and evaluation of foreign policy and diplomacy. Several policy products of the ministries and related institutions being reviewed are, among others: the Ministry of Foreign Affairs, the Ministry of Trade, BPOM, the Indonesian Ulema Council, and the Ministry of Tourism.
LITERATURE REVIEW
Prior to presenting the theoretical or conceptual dimensions that will be used to analyze Indonesia's foreign policy and diplomacy in the global halal industry competition, we review some of the scientific publications that have been produced by scholars. Some of the studies we raise are, among others, the global halal industry and the condition of Indonesia in the global halal industry competition.
In relations to scientific studies or publications that discuss Indonesia in the global halal industry, in general there are still only few scholars who have done the research. Some scholars conducted sectoral studies or commodity segmentation, for example on tourism (Suradin 2018, Jaelani 2017, Krithika 2017), cosmetics (Briliana and Mursito 2017), banking (Wibisono 2017), and other aspects such as Muslim student awareness of halal products (Farhan and Andriansyah 2016). If there is a publication that focuses on the global or international dimension, it is done by Limenta et al (2018), which discusses the regulation of Law No. 2014 regarding Halal Product Assurance, especially halal certification and labeling obligations for business products at home and abroad, and the possibility of violating international rules regulated in the World Trade Organization (WTO) regime.
From the various studies above, we conclude that the research or particular publications related to Indonesia's foreign policy in the global halal industry competition, especially in the 2014-2019 period have not yet been conducted.
Based on this, we hope this research can fill in the gap.
In regards to research on the global halal industry, publications issued by the Global Islamic Financial Report / GIFR (2018) can be a useful reference. In Chapter 13 entitled The Global Halal Industry: an Overview, the GIFR states that the current value of the global halal industry has reached a value of around 2.3 trillion US Dollars (outside the Islamic financial sub-industry) with annual transaction values reaching around 560 billion US Dollars (p. 140). As a potential Muslim consumer, currently the world's Muslims numbers are around 23 percent of the global population or around 1.8 billion inhabitants. With an average global population growth of 3 percent per year, the number of Muslims will reach 26%
or 2.2 billion people by 2030. There are two strongest markets for the global halal industry, namely Asia Pacific and the Middle East, with a total number Muslims reached 1.3 billion by 2030. Four of the 10 countries that have the largest Muslim population in the world are Indonesia, Pakistan, India and Bangladesh (p. 140).
On Indonesia's standing in the global halal industry, research from Anggara (2017) concerning Indonesia and the global halal agro-industry can be a reference.
Anggara concludes that Indonesia actually has the potential and opportunities for the Halal Agroindustry sector. However, the role of Indonesia as the country with
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the largest Muslim population in the world is still very low in the world halal market, especially in the export of Halal Agroindustry products (p. 77). Using SWOT Analysis, Anggara mentioned several strengths and opportunities as well as weaknesses and threats for Indonesia in the context of Halal Agro-Industry.
Indonesia's weakness, for example, is the lack of funding for the business sector and innovation in the development of start-ups and SMEs. The challenge is, among other things, the existence of scandals caused by poor management and non-systematic operational methods (p. 75).
To analyze the cases we raise in this study, we use the concept of foreign policy. The classic definition of foreign policy according to Walter Carlsnaes, as quoted by Smith et al (2016: 3) is "those actions which, expressed in the form of explicitly stated goals, commitments and / or directives, and pursued by governmental representatives acting on behalf of their sovereign communities, are directed towards objectives, conditions, and actors - both governmental and non- governmental - which they want to affect and which lie beyond their territorial legitimacy ". From this definition, a foreign policy (of a country) can be interpreted as actions (of the country) in the form of goals, commitments and directives that are stated openly, aimed at the actors (government or non- government) in order to influence parties another outside of his country.
However, according to Smith et al (2016: 3), the definition of foreign policy that is widely used by international relations scholars is what Christopher Hill (2003) said, that foreign policy is "the sum of official external relations conducted by an independent actor (usually a state) in international relations." We, in this regard, prefer applying this definition in analyzing the case studies.
In relations to studies of Indonesia's foreign policy, in general there are two perspectives or approaches applied by scholars. If they study Indonesia's foreign policy from a general perspective, they will make an analysis based on the periodization of the governmental regimes. Studies conducted by Anwar (2010) and Sukma (1995) are some of them. Other studies even do a more general perspective. Chiefs among them are studies conducted by Clark and Pietsch (2014) and Novotny (2010).
Considering that global halal industry sector is inseparable from economic diplomacy, we also use the concept of economic diplomacy as the analytical tool.
Bayne and Woolcock (2016: 3) states that "economic diplomacy is concerned with international economic issues". This shows that economic diplomacy is closely related to international economic issues. Further, Bayne and Woolcock (2016: 3) also mentioned that "economic diplomacy is primarily concerned with what governments do, in the broadest definition". In other words, economic diplomacy is closely related to what the government is doing. All economic diplomacy activities are broader than just the main tasks and functions of the foreign ministry. All government bodies that have economic responsibilities and operate internationally are part of economic diplomacy. Even further, non-state actors who also deal with economic diplomacy, both those that influence government policy and as independent actors, can also be said to be part of economic diplomacy.
In regards to the linkage between foreign policy and diplomacy, we argue that they are like two sides of a coin. Or, as argued by Hocking et al (2012: 20),
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diplomacy and foreign policy are “all deeply interconnected and cannot be dealt with individually.”
RESEARCH METHOD
The method of this research is qualitative. According to Taylor et al (2016:
17), qualitative research methods refer to studies that produce descriptive data in the form of written or oral statements of people and observable behavior. In another context, Tracy (2016) provides an interesting view that qualitative research methods have three central concepts to be used as the beginning of a qualitative research project. The three concepts are Self-Reflexivity, Context, and Thick Description.
With regard to Self-Reflexivity, Tracy (2016: 2) states that this refers to "the careful consideration of the ways in which researchers 'past experiences, points of view, and roles impact these same researchers' interactions with, and interpretations of, the research scene." In other words, self-reflexivity is linked to the past experiences of the researchers, their views, and the role of their interactions and interpretations in the research being carried out. As for this study, the experience of one of the researchers from this research team as a former diplomat and also another researcher who studies foreign policy issues and international relations are in line with the intent of this Self-Reflexivity.
On Context, Tracy (2016: 3) states this is related to "immersing oneself in a scene and trying to make a sense of it - whether at a company meeting, in a community festival, or during an interview." Based on this, it can be said that the researchers of qualitative methods are expected to immerse into the arena of research and try to get an understanding of the process earlier. As for this study, the involvement of team researchers in this research project in various national- international halal industry activities both in Indonesia and other countries can be categorized as the implementation of what is called Context.
As for Thick Description, Tracy (2016: 3) writes that this is still related to Context, but rather emphasizes that researchers "immerse themselves in a culture, investigate the particular circumstances present in that scene, and only then move toward grander statements and theories." This statement is in line with the Context's need for researchers to merge in their research objects. However, Thick Description is needed if the research conducted will produce statements and theories that are larger.
Departing from the definitions of foreign policy and economic diplomacy as well as the three central concepts of the Qualitative Research Method and a brief explanation of the international relations research method, we then investigate the questions of this research. The investigation starts from the preparation of a proposal (research design) and later continues with data collection from scientific references and policy documents on Indonesia and the global halal industry. Later we conduct analysis of the data and close with conclusions.
Some sections that we plan to investigate include:
- The Global Halal Industry and the Performance of Indonesia. In this section, we will illustrate how the mapping of the recent global halal industry. From this mapping, we hope to be able to better show Indonesia's current standing in the global halal industry competition.
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