FORMULATION OF THE DEVELOPMENT POLITICAL CONCEPT OF NEW ECONOMY BASED ON ISLAMIC ECONOMIC IN INDONESIA

Abstract

The development political approach in Indonesia used the political concept of trickle-down effects during the New Order government up to economic reform period. This political approach holds that the upper classes become the target of development and therefore it should take precedence in the acquisition of income. The class will serve as the locomotive towing a country's economy that pulls the economy of the lower class indirectly. In fact, the implementation of this political economic approach was not run well and caused imbalance on the distribution of the development, especially in the economic sector. This political economic approach did not run in line with the underlying assumptions should be. The purpose of this study is to criticize the approach and mechanism of political economic development in Indonesia which was not in accordance with the expectations of the development of the Indonesia. The second objective is to formulate the concept of a new political economic development approach that based on Islamic economic system. This study used the paradigm of critical (critical paradigm) with policy research approach. This study found a concept of political economic development approach that called squirt up political economic development. It means that economic development which squirt up windfall from the bottom to the top class. Supporting pillars of this political economic approach are 1) the economic reform program, 2) Improving the quality of health and education, 3) strengthening the technological capabilities and 4) structural adjustment program with the growth of new industries. Economic instruments of this pillars include: 1) the financial system should be consistent with justice (fairness) for all market participants. 2) Implementing the finance schemes, namely profit-sharing system and equity. 3) Transaction of debt contract agreement must be created through the buying and selling of goods and services in the real sector, not through direct credit transactions in the financial sector. 4) Regulation and supervision of Islamic financial institutions are adequate and integral in creating Islamic financial market discipline system. While the strategic steps are the development that rely on the program pro-growth, pro-job, pro-poor and pro-environment.