Bank Indonesia Award 2024 Celebrates Excellence in Indonesia’s Halal Economy

The Bank Indonesia Award 2024, presented during the Annual Meeting of Bank Indonesia (Pertemuan Tahunan Bank Indonesia, PTBI) at Graha Bhasvara Icchana in Jakarta on November 29, 2024, celebrated significant contributions across various sectors, notably the halal economy. This year’s theme, “Synergy to Strengthen National Economic Stability and Transformation,” underscored the importance of collaborative efforts in bolstering Indonesia’s economic resilience and transformation.

Excellence in the Halal Economy

Among the distinguished honorees was Professor Setiyo Gunawan, a lecturer from the Department of Chemical Engineering at Institut Teknologi Sepuluh Nopember (ITS). He was awarded the Halal Economy Activist category, acknowledging his pivotal role in advancing Indonesia’s halal ecosystem. Under his leadership, the ITS Halal Study Center (Pusat Kajian Halal, PKH) has initiated several innovative programs, including:

• Halal Certification Assistance: Guiding micro, small, and medium enterprises to obtain halal certification, enhancing their market competitiveness.

• The Halal Wave Application: Creating a digital platform to promote halal products and services, facilitating greater consumer access and awareness.

• Launch of the Research Halal Journal: Publishing scholarly articles to disseminate research findings and insights on halal industry developments.

These initiatives have been instrumental in strengthening the halal value chain and promoting a halal lifestyle in Indonesia. Professor Gunawan emphasized that this recognition honors past efforts and imposes a responsibility to continue contributing meaningfully to the halal industry. He plans to expand collaborations and focus on research addressing challenges within the halal sector. He also aspires to inspire the younger generation to drive the halal economy forward, leveraging their creativity and innovation to elevate Indonesia’s presence in both local and global markets.

Bank Indonesia’s Commitment

Bank Indonesia’s dedication to the halal economy was further acknowledged internationally. For the third time, after similar accolades in 2018 and 2022, Bank Indonesia was honored as the Best Central Bank of the Year 2024 at the 14th Global Islamic Finance Award (GIFA) held in the Maldives. This award recognized the bank’s pioneering efforts in developing Sharia finance policies and its significant contributions as a catalyst for the international Sharia economy.

Governor Perry Warjiyo stated that this achievement reflects Bank Indonesia’s unwavering commitment to advancing the Sharia economy and finance domestically. He highlighted the crucial role of synergy with stakeholders in developing strategic initiatives that strengthen Indonesia’s position as a global hub for the sharia economy.

In line with its commitment, Bank Indonesia has implemented several strategic initiatives to bolster the halal industry:

1. Development of the Halal Economy and Industry: Focusing on enhancing the halal value chain to position Indonesia as a leading player in the global halal market.

2. Digitalization Efforts: Launching platforms like Simfratani, which enables real-time monitoring of agricultural activities, ensuring compliance with halal standards and optimizing production processes.

3. International Collaborations: Hosting events such as the Indonesia International Halal Chef Competition (IN2HCC) to showcase Indonesian halal products and foster global partnerships.

These efforts are complemented by the Indonesia Halal Lifestyle Center’s (IHLC) initiatives, which, in collaboration with DinarStandard and supported by Bappenas, released the Indonesia Digital Islamic Economy Report 2023/24. The report highlights that Indonesia’s digital Islamic economy, valued at $40.57 billion in 2022, is projected to grow to $76.09 billion by 2029, driven by increased halal awareness through digital media and the involvement of local digital unicorns.

Related: Bank Indonesia Governor Highlights 5 Key Drivers of Islamic Finance Growth

Significance of the Halal Economy

The global halal industry is experiencing significant growth, with the State of the Global Islamic Economy report estimating that consumption of halal products will reach USD 2.4 trillion by 2024. Indonesia, with the highest consumption of halal food products, accounting for USD 173 million and a 13% share of the global halal food market, is poised to become a key player in this sector.

Bank Indonesia’s strategies, including the mandatory halal certification and digitalization of the halal industry, aim to harness this potential, driving economic growth and positioning Indonesia as a global leader in the halal economy. The country’s focus on digitalization, traceability, and halal certification allows for improved transparency and quality assurance, which are essential for meeting global halal standards.

Research in the Halal Economy

Educational institutions like ITS play a vital role in shaping the future of the halal economy. The ITS Halal Study Center has been instrumental in promoting halal education, conducting research, and supporting the halal certification process for MSMEs. The center’s efforts to provide halal certification assistance and the development of the Halal Wave application are noteworthy milestones in making the halal economy more accessible to local entrepreneurs.

Moreover, the Research Halal Journal serves as a platform for disseminating critical insights into halal industry trends and developments. It bridges the gap between academia, industry, and policymakers, fostering an ecosystem of knowledge sharing. The role of academia in driving innovation, raising awareness, and supporting MSMEs cannot be understated, as it lays the groundwork for long-term, sustainable growth in the halal sector.

Professor Setiyo Gunawan’s emphasis on involving the younger generation is a strategic approach to ensure the sustainability of Indonesia’s halal economy. Young people bring fresh perspectives, creativity, and technological proficiency to the table. By integrating their ideas, the halal economy can remain dynamic and responsive to evolving market demands.

Institutions like PKH actively encourage youth participation through internship programs, workshops, and training on halal certification processes. The involvement of young entrepreneurs in the halal economy opens avenues for innovation in halal food production, fashion, tourism, cosmetics, and pharmaceuticals. This approach strengthens Indonesia’s vision of becoming a global halal hub, with the next generation leading the charge.

The halal economy has become a key pillar of Indonesia’s economic development strategy. The government’s proactive measures, such as tax incentives for halal-certified businesses and the establishment of halal industrial zones, have created an enabling environment for growth. MSMEs, which form the backbone of Indonesia’s economy, benefit significantly from these initiatives, as they gain better access to local and international markets.

The halal industry also contributes to job creation, with more employment opportunities emerging in halal production, logistics, certification, and marketing. Sectors like halal tourism, halal cosmetics, and halal pharmaceuticals are witnessing exponential growth, fueled by consumer demand for ethical and Shariah-compliant products. The Bank Indonesia Award highlights Indonesia’s potential to become a major global player in this sector, especially as the country strengthens its halal export capabilities.

The Bank Indonesia Award 2024 not only honors individual and institutional contributions to the halal economy but also reflects a broader national commitment to economic stability and transformation. Through strategic initiatives, international collaborations, and a focus on digitalization, Indonesia is strengthening its halal ecosystem, aiming to elevate its status in the global halal market. The recognition of figures like Professor Gunawan serves as an inspiration for continued innovation and active participation in this dynamic sector, ensuring that Indonesia’s halal economy thrives both locally and internationally.