In July 2021, FEB UGM organized an annual summer program through I-Week that provided various benefits, such as lectures and discussions facilitated by internationally recognized competent figures. Last year’s I-Week was held on 26-30 July 2021 with the theme Digital Transformation and Sustainability in the Global Business Environment.
One of the speakers who were invited to give their knowledge was Dr. Sami Al-Suwailem, Director General of Islamic Research Training Institute (IRTI). Guided by Akhmad Akbar Susanto, Ph.D. from the Department of Economics at FEB UGM as moderator. In his session, Dr. Sami Al-Suwailem presented about Islamic Economics in a Complex World.
At the beginning of his presentation, he explained that the majority of crises that occurred in the world were caused by differences or conflicts of interest of each party. He explained that the world economy is truly an interconnected, complex system, so society should view the system as a whole that influences each other in order to avoid crises or crashes in the future.
Dr. Sami Al-Suwailem also explained the concept of a prisoner’s dilemma, which is a situation where mutual cooperation cannot reach its optimal state because of the dilemma caused by each party wanting to become dominant. He explained that the desire to be more dominant than the other can cause the achievement of nonoptimal results. He gave an example of the Covid-19 dilemma, where there is a possibility that one of the cooperations had the desire to be more dominant than the others, causing them to allocate more funds to the company’s marketing than the healthcare sector. The dominant strategy creates a nonoptimal or inferior outcome.
At the end of his explanation, he concluded that the market has limitations in distributing resources. Therefore, to balance these limitations, non-market mechanisms have an important role in it. Profit institutions and nonprofit institutions must be balanced as the main role of Islamic economics. He also explained that to bridge the gap between personal interests and group interests, it was necessary to have a moral sense. Thus, he analogized the two invisible hands in the market as personal interests and moral sense.
It can be concluded that the role of the Islamic economy in the world is to balance market and nonmarket mechanisms. Not only that, financial economics emphasizes ownership and risk-sharing. In the end, he also mentioned that the global crisis requires a new framework to regulate companies and competition.
Reportage: Zahra Dian
Webinar Video : https://youtu.be/5E_ePDjYnv4
