Analysis of the Development, Implementation, and Contribution of Islamic Economics in Indonesia in Improving Social Welfare and National Economic Stability in the Modern Era

Abstract

The Islamic economy in Indonesia has experienced significant development in recent decades, marked by the increasing number of Islamic financial institutions, supportive regulations, and public awareness of the Sharia-based economic system. The background of this research is based on the importance of assessing the extent to which the development and implementation of Islamic economics can make a real contribution to improving social welfare and maintaining national economic stability in the modern era full of challenges of globalization and digitalization. This study aims to analyze the development of Islamic economics in Indonesia, examine its implementation in various sectors, and evaluate its contribution to social welfare and national economic stability. The method used in this research is a qualitative method with a library research approach, which examines various scientific literature, journals, books, and official reports related to Islamic economics in Indonesia. The results show that the Islamic economy in Indonesia is growing rapidly through the Islamic banking sector, Islamic social finance such as zakat, infaq, sedekah, and waqf, and the halal industry. The implementation of Sharia principles in the economic system has been proven to increase financial inclusion, reduce social inequality, and strengthen national economic resilience. However, challenges remain, such as low Islamic financial literacy, limited human resources, and regulatory and technological optimization. The conclusion of this study confirms that Islamic economics plays a strategic role in promoting social welfare and national economic stability in Indonesia. With appropriate policy support, increased literacy, and digital-based innovation, Islamic economics has the potential to become a key pillar of equitable and sustainable economic development.