Progressiveness of Islamic Economic Law in Indonesia: The Murā‘at Al-‘Ilal wa Al-Maṣāliḥ Approach

Abstract

Islamic economic law is unresponsive and tends to be legal-formal in supervising Sharia finance and economic development. Economics, in fact, emphasizes the aspects of flexibility and convenience. This study aims to reveal the response of fatwas to economic and financial developments using the murā‘at al-‘ilal wa al-maṣāliḥ approach. The study use qualitative research method. The study used qualitative research methods, analyzed using the proposed fiqh and fiqh approaches. The data studied is the fatwa of the National Sharia Council (Dewan Syariah Nasional/DSN) of the Indonesian Ulema Council (Majelis Ulama Indonesia/MUI). This fatwa is examined by comparing chronologically the time, the opinion of the clergy, and economic developments. The three fatwas became the focus and debate of scholars examined to find patterns in responding to the needs of financial and economic transactions. As a result, fatwas are dynamic and responsive to industry needs. The law can change since the legal reasons (‘illat) behind it also changes. The existence of a law lies in how the cause of the law works; hence, in fatwa, there are things changing and some are permanent legal provisions. This finding has implications for corrections to previous legal provisions and changes to contracts made between financial institutions and clients.

Legal Politics of the Existence of Fatwa in Islamic Financial Institutions: Evidence from Indonesia

“…33 In contrast to Malaysia, Sudan, and Pakistan, the National Shariah Council -Indonesian Ulama Council Fatwa was not formed by the government or the central bank (Bank Indonesia) but by the Indonesian Ulama Council. 34 The National Shariah Council -Indonesian Ulama Council performs the duties of the Indonesian Ulama Council in determining fatwas on economics, business, and Islamic finance and supervising their application in Islamic financial institutions. 35 A comprehensive discussion of the National Shariah Council -Indonesian Ulama Council fatwa is provided in the following subdiscussion.…”

Examining The Synergy between Al-Mizan Principle in Shariah Economics and Green Economy: A Legal Perspective

“…This MUI fatwa then becomes the standard for economic, financial, and financial activities. [19] The fatwa has made a significant contribution to the development of Islamic economic law and the improvement of the Islamic economy in Indonesia. The MUI fatwa has introduced modern ijtihad that promotes the collective decisions of the Ulama while involving various experts.…”

“…125/PMK.08/2018 concerning the Issuance and Sale of Retail Sharia Securities in the Domestic Primary Market, LPS Regulation concerning Problematic Banks and various other regulations that emphasize the integration of Sharia principles into the state's economic framework. [19] Furthermore, the application of the sharia economic system in the context of legislation in Indonesia has even reached the level of the national legislative council, with the issuance of Law No. 19 .…”

“…[19] Furthermore, the application of the sharia economic system in the context of legislation in Indonesia has even reached the level of the national legislative council, with the issuance of Law No. 19 . This further indicates the important role of the sharia economic system in Indonesia, as a form of development of potential financial instruments that can be used as an effort for national development.…”