Aryati ARFAH, Fahruddin Zain OLILINGO, S. SYAIFUDDIN, D. DAHLIAH, N. NURMIATI, Aditya Halim Perdana Kusuma PUTRAI / Journal of Asian Finance, Economics and Business Vol 7 No 11 (2020) 1077–1085 1077 Print ISSN: 2288-4637 / Online ISSN 2288-4645 doi:10.13106/jafeb.2020.vol7.no11.1077 Economics During Global Recession: Sharia-Economics as a Post COVID-19 Agenda Aryati ARFAH1, Fahruddin Zain OLILINGO2, S. SYAIFUDDIN3, D. DAHLIAH4, N. NURMIATI5, Aditya Halim Perdana Kusuma PUTRA6 Received: August 01, 2020 Revised: September 30, 2020 Accepted: October 15, 2020 Abstract This research is a literacy study regarding the implementation and management of the economic role of haria as a new strategy in overcoming the problem of the global financial crisis that has hit the middle of the COVID-19 pandemic. The research method comes from previous studies to compare the capitalist, socialist, and sharia economic systems. In response to various economic uncertainties, both internal and external, the ability to seize opportunities and transform has become the key to economic resilience. Islamic economics can be an alternative in responding to the dynamics of the global and national economy. Several things need to be taken into consideration in fulfilling the sharia economy and the primary strategy chosen must come from the inputs given by the stakeholders, including business actors, associations, regulators as well as experts, and academicians. The primary strategy in implementing the sharia economy also requires the support of various parties in order to develop sustainability. Strengthening regulation and governance is one of the fundamental factors. Optimization of the sharia economy based social sector such as Zakat, Infaq, Sadaqah, and Waqaf can be optimized both for collection and distribution so that the concept of sharing can certainly support the development and the economy both nationally and globally. Keywords: Sharia Economics, Global Recession, Economic Systems JEL Classification Code: B15, B24, B55, D31 1. Introduction The essence of Sharia economics, which positions justice and unity, is conveyed through the Islamic spirit, which is claimed to be the differentiator between economic 1First Author and Corresponding Author. Associate Professor, systems that exist today or have existed on this earth. In Department of Development Study, Faculty of Economic & Business, contrast to economic schools such as capitalism, socialism, Universitas Muslim Indonesia, Makassar, Indonesia [Postal Address: and mercantilism; Islamic economics strongly opposes the Urip Sumoharjo, Makassar city, South Sulawesi, 90231, Indonesia] Email: [email protected] exploitation of profits on a large scale to the capitalists 2Associate Professor, Department of Economics Development (both as creditors, and debtors) (Kuran, 1996; Pryor, 1985) Studies, Faculty of Economics, Universitas Negeri Gorontalo, which, in practice, forms an image of being rich among Indonesia many poor people. The existence of the Islamic economy or 3Associate Professor, Department of Islamic Economics, Faculty of Shariah and Islamic Economic, IAIN Ternate, Ternate, Indonesia Islamic economy that has existed for hundreds of years has 4Associate Professor, Department of Development Study, Faculty been practiced and proven to provide benefits and benefits of Economic & Business, Universitas Muslim Indonesia, Makassar, in the heyday of Islam in the past, the development of an Indonesia increasingly modern era has finally replaced the position 5Associate Professor, Department of Management, Faculty of Economic, Universitas Patria Artha, Makassar, Indonesia. and essence of Islamic economics with the economic 6Assistant Professor, Department of Management, Faculty of system designed by humans who think economics such as Economic & Business, Universitas Muslim Indonesia, Makassar, capitalism and socialism are ideal to accelerate the progress Indonesia of human civilization in all sectors. However, in the long © Copyright: The Author(s) journey of human civilization, the economic systems such This is an Open Access article distributed under the terms of the Creative Commons Attribution Non-Commercial License (https://creativecommons.org/licenses/by-nc/4.0/) which permits as capitalism, mercantilism, and socialism have proven to unrestricted non-commercial use, distribution, and reproduction in any medium, provided the record many tragic financial histories for humankind. original work is properly cited. Aryati ARFAH, Fahruddin Zain OLILINGO, S. SYAIFUDDIN, D. DAHLIAH, N. NURMIATI, Aditya Halim Perdana Kusuma PUTRAI / 1078 Journal of Asian Finance, Economics and Business Vol 7 No 11 (2020) 1077–1085 History records that no less than 4 (four) economic sector. The purpose of this study is to make it as a reference recessions occurred globally, namely in 1975, 1982, 1991, as well as for critical review for economic policymakers and 2009. For example, the global crisis in 1975 was and stakeholders regarding the urgency of implementing triggered by the post-World War II energy crisis. The oil Islamic economics / Islamic economics as a new stream of embargo on countries such as America, UK, Denmark, financial strategies that are more stable and more humane. Of and so on started stagnation and over-rate inflation. Then course, this study’s ideas and concepts are based on Islamic the world economic recession in the 1980s, to be precise principles that are as per the Sharia, are expected to be the between 1980 to 1983 was also triggered by a crisis in the best solutions to create a healthy economic order—starting supply of oil supplies from Middle Eastern countries so that from Indonesia for the world. countries such as America, Canada, West Germany, Italy, Apart from referring to the Quran and Sunnah in Britain, and Japan were forced to increase their interest- general, the target of Islamic economic development also rest to control inflation. The 1991 and 2009 crises’ motive refers to the state which protects the life of the people. was triggered by the collapse in the financial, property, and It is used for the people’s greatest prosperity with the economic sectors. The financial crisis has occurred since the principles of togetherness, just efficiency, sustainability, 3rd century to the 21st century as it is now. Almost 98% of environmental awareness, independence, and maintaining the crises started from countries adhering to the economy a balance between progress and national economic unity. of capitalism and mercantilism, which had a domino effect The aspiration to minimize inequality and discrepancy is the globally on developing and developing countries. main target of sharia economic development (Alam et al., In Indonesia itself, the crisis has also hit, namely, in 2020; Alam, Tabash, et al., 2020). Therefore, to implement the 1998 situation in the ASEAN region, which also had the Sharia economy as a new flow in the economy, apart from a severe impact on Indonesia, the banking and financial referring to the things mentioned above, efforts to realize the crises in 2008 and 2015. In 2020, the crisis has also hit the Islamic economy include: strengthening partnerships and world as a result of the COVID-19 pandemic. Problems that institutional aspects, namely government, private, financial initially attacked health ultimately caused a systemic impact institutions and entrepreneurs through the implementation of on the social, economic, socio-economic, political, cultural, the Islamic financial system. The regulations to improve the and defense orders (Al-Mansour & Al-Ajmi, 2020; Khan position of the Islamic economy in Indonesia as a national et al., 2020; Khanthavit, 2020). The issue of the financial economic strategy. The global economy’s challenges are crisis caused by COVID-19 is said to be the worst ever in increasingly complex and varied; This has become more world history. It is a crisis which has affected all aspects of pronounced not only since 1998, 2008, and 2015 crises. The human civilization. Reflecting on this description, it is only world economic crisis caused by COVID-19 has opened our fit to say that the world must change its economic order and eyes, not only the Indonesian people but the whole world, structure, which is pro-justice and pro-togetherness, namely to the crisis that affects all aspects of life. It can be argued the Islamic economy based on sharia. The Islamic financial that all forms of crisis throw trade, finance, and geopolitics system is not a middle way between the capitalist, socialist into chaos, placing countries at risk of instability and and communist economic systems. The Islamic economy vulnerability. is independent; provides a long explanation of what can be traded or not and which law is following sharia or mubah. 2. Sharia, Capitalist, Socialist as Economic- The purpose and essence of Islamic economics are harmonies Systems to achieve Islam’s goals and to be a blessing for the whole world. The economy is a combination of words that come Following the Qibla, Islamic economics is based on from Greek, namely Oikos (family) and nomos (regulation/ the Quran, where the guarantee of justice, prosperity, management). The term was later adopted by the Church in togetherness and family as a bridge between human beings 1440 to describe a government or administration system that (hablu-minannas), and the existence of devotion and was subsequently adopted by the state in the 19th century. worship to Allah SWT (hablu-minallah) is an absolute However, the