Islamic Finance for Development as an Advocacy Opportunity for Indonesia at the Fourth International Conference on Financing for Development - Resident Coordinator's Remarks, Gita Sabharwal

Bapak Putut Hari Satyaka, Deputy Minister for Financing and Investment, Bappenas

Permanent Representative of the Republic of Indonesia in NY

Representatives from Ministry of Religious Affairs, Ministry of Finance, Ministry of Foreign Affairs, OJK, and National Committee for Sharia Economy and Finance

BAZNAS, Baitul Mal Aceh, and other zakat and waqf organizations

Bank Sharia Indonesia and BTPN sharia

Fellow UN Agencies

Let me thank BAPPENAS for organising the third dialogue, which will inform governments position paper in preparation for FFD. 

The first two dialogues brought stakeholders together to take stock of innovative financing and examining in depth climate financing instruments that leverage the public and private sector. 

Today’s dialogue focuses on Islamic finance in support of the SDGs aligned to the Government’s forward-looking development agenda to meet the President’s vision of securing 8% growth. 

At the UN we are keen to ensure Islamic Finance is included as part of the FfD outcome document, acknowledging its potential to contribute to SDGs together with OIC.

The voice of Indonesia, as a champion of innovative financing and a bridge builder, will be critical in taking to scale the different innovative financing instruments across countries as they tackle to fill the financing gap.    

Islamic finance offers a unique, ethical and Sharia-compliant framework which aligned with the SDGs. 

It reflects principles of equity, shared responsibility and social welfare, while fostering a more inclusive approach.

It also speaks to the breadth and power of partnerships we need to bring to bear for fast tracking sustainable development to leave no one behind.

Your presence here as representatives of ministries, regulators, banks, Islamic communities, capital markets, and Zakat and Waqf organizations testifies to this.

Within a wider global context, Indonesia is recognized as one of the most generous countries, testifying to its culture of giving, including through Zakat, Sadaqah, and Waqf contributions.

Analysis suggests that the Zakat and Waqf funds alone have an asset base of $27 billion, which can further expand financing in support of SDGs more broadly. 

The UN works in partnership with government, sharia banks and zakat organizations to leverage Islamic Finance to turbo-charge the SDGs and advance climate goals.  

With the Ministry of Finance, UNDP is supporting the development of green sukuks, mobilizing an additional $9 billion over the past six years. 

These funds support 7.8 million households to improve solid waste management, invest in treating wastewater and generating over 7kw of power through renewables. It also supported investments in sustainable urban transportation.  

Last year alone, proceeds from the green sukuks contributed to a 1% reduction in GHG emissions.

This is an example of the scale of impact that IF can contribute to in addition to investments made by government and private sector.

At the provincial level, UNICEF, in partnership with Baitul Mal Aceh, is leveraging nearly $14 million to ensure education, nutrition, sanitation and hygiene for more than 20,000 households, including 2,300 children. 

Similarly, with NTB, UNICEF’s partnership with BAZNAS translates into many thousands of households securing regular access to safe drinking water and sanitation. This directly contributes to health and well-being for families living below the poverty line.

With the appointment of Ibu Retno as the SG’s SE for water, in partnership with the MORA and BAPPENAS, the UN is keen to explore the scaling up of this approach to other provinces with a focus on safe drinking water and sanitation for under served families. This will directly contribute to further advancing SDG6, which is currently lagging in Indonesia.

I look forward to strengthening our partnerships to capitalize on this important agenda to the fullest.

Thank you.

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In addition, UNDP in partnership with the National Zakat Board leveraged Islamic finance to promote biodiversity conservation, committing $54,000 to projects in Sulawesi and West Kalimantan where sustainable cocoa farming modules were developed.