Indonesia planning waqf-based and diaspora sukuk

Photo: Jakarta, Indonesia - August 21 2015: Cars and buses rush through the Plaza Indonesia roundabout in Jakarta business district / AsiaTravel / Shutterstock.com

JAKARTA – Bank Indonesia, the country’s central bank, last week released plans for new sukuk based on waqf and remittances from Indonesian workers abroad in a bid to diversify and raise funding for the country’s infrastructure projects.

“We estimate 10 percent of the amount of remittances can be invested in sukuk. Currently we are still gathering feedback from stakeholders about this idea, and we are currently discussing the technical as well as the legal side,” Djoko Kurnijanto, director of International Affairs at the Financial Services Authority (OJK) told Salaam Gateway.

There were 6.5 million Indonesian migrant workers in 2014 with remittances amounting to 105 trillion Indonesian rupiah ($8.3 billion), according to data from Bank Indonesia and the National Agency for Placement and Protection of Indonesian Migrant Workers (BNP2TKI). This figure does not include Indonesian professionals working abroad, who fall outside of BNP2TKI’s remit, such as business owners, researchers and academics.