JAKARTA (TheInsiderStories) – The Joko Widodo government has issued Presidential Decree which requires the Hajj Funds to be invested in accordance with the Syariah principles.
The ruling, number 100, 2017 on Hajj Funds Management Agency which take immediate effect, was signed by President Widodo on Dec. 11, 2017.
As stated in the articles 10 to 17, the Fund Management Agency has the authority to place and invest the Hajj Funds in accordance with the syariah principles, prudent and safe as well as cooperate with other entities in managing the Hajj Funds.
The ruling implies that the hajj funds may only be invested in syariah-compliant instruments such as Sukuk or others.
As of end last year, the total amount of Hajj Funds reached around Rp95 trillion (US$7 billion). The Joko Widodo government wants portion of the Hajj Funds to be used to fund the government’s infrastructure projects.
Hajj Funds are advanced payment made by the pilgrims. Under the current mechanism, pilgrims have to pay upfront 75 per cent of the total pilgrimage cost, however, often the pilgrims have to wait more than eight years to go on the haj because of the limited quota, which varies every year (211,000 for this year), set annually by the Saudi government.
The Religious Affairs Ministry and the Indonesian Ulemas Council (MUI) have confirmed that part of the haj funds could be used for financing infrastructure development as long as the investment is made through syariah-compliant instruments.
The Presidential Decree provides legal basis for the government and the Hajj Funds Management Agency to invest the funds in instruments that comply with the government regulation. The decree also provides strong legal basis for the Joko Widodo government to utilize portion of the Hajj Funds to finance infrastructure projects across the archipelago.
Unlike Indonesia, Malaysia has built up the assets of the Pilgrims Management and Fund Board at US$27.5 billion as of end 2015 and set to increase. Malaysia invested its funds in various companies engaging in industries, e-commerce, plantation and other key sectors.
Written by Roffie Kurniawan, email: firstname.lastname@example.org