1. Dual economic system Dr
Dual economic system Dr. Dian Ediana Rae Executive Director, Head of Bank Indonesia Regional Office for Sumatra
Delivered on :
58th Padjajaran University Anniversary
Bandung, September 2015

2. Outline
Background
Framework
Where are we (BI)?
Strategy
Timeline

3. Background
Lessons learnt from current and past experience of Islamic economic’s development in Indonesia:
Current approach is much more business oriented as it heavily focuses on Islamic banking, so that Islamic banks just mirror that of conventional banks.
The use of Islamic terms makes Islamic banking exclusive and limits the chance for Islamic economic to grow universally as rahmatan lil’alamiin  Islamic Banking’s asset share stays less 5% of industry.
Ignite retention in region where moslem is minority.
The need for more strategic, comprehensive, conceptional and pragmatic Islamic economic’s development that leads to a better dual economics system, through:
a)Human Capital and market Empowerment, incl. research
b)Supporting infrastructure, incl. legal, data and information
c)Regulatory and supervisory;
d)Product and market development; and
e)Efficient industrial structure
In such an inclusive manner.

4. Framework

5. Where are we (BI)? Weakness Strengths Threats Opportunities
Role as authority in monetary & financial stability, both conventional & Islamic
Role as Lender of Last Resort (LOLR) & Authority in Islamic money market
Pursue active role in developing Islamic economic internationally
Has financial inclusive program, including Islamic financing.
BI’s policy does not directly affect Islamic economics industry
Islamic monetary operation acts as complement, per se.
Limited instrument & shallow Islamic money market.
There is no synergy b/w BI & Gov. in supporting development financing.
Weakness
Strengths
Threats
Opportunities
design business model for stimulating Islamic economic and finance
Expanding the role of Islamic social institution (Zakat dan Wakaf).
Use of Islamic Bills/Bonds as monetary instrument as well as project financing.
Develop Islamic money market instrument
Eradicate poverty through Islamic financial inclusion
Limited mandate on BI, as not stated in UU BI, in developing Islamic economics
Limited commitments from government in supporting the development in Islamic economic and finance

6. Strategy Increasing awareness through soft skill,
Education & Value inducement
Technical assistance from int’l body
Engagement & ownership by
designing business model for Islamic
Entrepreneur
Pilot project, financing with zakat
Market Empowerment HC
&
Infrastructure
Supporting
Supervisory
Regulatory
Market Dev
Product &
Structure
Industrial
Efficient
Inter-sectoral & authority
coordination
Islamic Economic &
Market Research
Informational backbone
Money market’s Infrastructures
Good Governance
-waqf core principle
-roadmap BWI
-inclusive Islamic financial
service board
-harmonization
Encouraging sukuk issue, both
government & corporate,
Including waqf management
Islamic-Money Market’s
Scheme development

7. Timeline
1. Inisiate shariah’s financial market development through int’l institution (OIC, IDB, IIFM, IILM, IFSB)
2. Suggest optimal financing schemes w.r.t region, and industrial character and local wisdom.
3. Amplify the impact of Islamic social finance through zakat, wakaf, and relevant government and authority’s cooperation.
3. Sending expert on Islamic economic & finance as advisor to newly develop country on Islamic economic and finance.
4. Role model for development of Islamic economic in the world
5. Center of Islamic economics and finance education
1.Intensely involved in Indonesia-Islamic Financial Architecture (AKSI)
2.Establishment of int’l General Zakat in Indonesia
3.Coopertaion w/ stakeholders (MES, IAEI, PKES, etc)
4.Int’l Workshop on zakah and waqaf
2015
1. Amendment UU BI
2. Cooperation w/ other NIFC authority in Islamic economic
and finance development in Indonesia
3. Strategic alliance w/ int’l institution incl. the development of
Islamic social finance
4. Cooperation w/ university in research, dissemination and
education of Islamic economic
5. Empowering skill and knowledge of Islamic financial HR in
macroprudensial, financial inclusion, monetary and risk mgt. 
6. Initiate international forum for regulator of Islamic economic and finance in regular basis.

8. -THANK YOU-