Sharia Principles: Can It Be Part Of Infrastructure Development?

By Author: Irvan
Total Articles: 1
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As a country with the biggest Moslem populations in the world, Indonesia has applied Sharia principles in various kind of economic sectors such as in banking. Then, it raises a question, can Sharia principles be applied to indonesia infrastructure development? It still needs more research and considerations, but at least there are several principles that can be applied well to support national infrastructure development.

Ijarah Muntahiya Bittamilk
The first priniciple is the Ijarah Muntahiya Bittamilk (IMBT) that is basically related to financial lease. Different from the common lease principles, the IMBT is defined as a financing facility that provides a clear scheme about the leased object before it is handed to the client. It can be a great financing solution since IMBT does not include montly rental expenses as the subject. The system also does not affect the ROA and DER of the client because there is no underlying asset recorded. The system is also much simpler so we can easily learn about IMBT before deciding whether we need any financing aid.

Murabahah
The second principle is ...
... murabahah. It can be defined as a financing term where one party buys particular good with cash then they sell it to the second party for payment withsome profits. Some people actually have already been familiar with murabahah. They call it installment sale. This principle can get you a flexible payment method, including cash payment. However, in indonesia infrastructure development this financing principle can be a little bit difficult since not all companies and people are able to submit their right murbahah financing file.

Musyarakah Mutanaqisah
If you are familiar with diminishing partnership principle, it would be much easier for you to comprehend musyarakah mutanaqisah (MMQ) principle. This Sharia financing principle can be defined as a financing facility to help one part to own particular asset. The system requires cooperation such as a rental business in particular property. MMQ can be very flexible since it gets you flexible payment system and a long tenor financing. This system is also not afffected by market interest fluctuation. In some degree, the system can help one party to own property through a joint ownership.

In short, Sharia principles actually can be applied to support national infrastructure development. There are a lot practicalities that are offered by the systems. There are also numerous banking system s that have already applied Sharia principles. So, these financing principles can be applied to indonesia infrastructure development even when we also need to colaborate with banks and government.