Acting Head of UGM’s Center for People’s Economy Studies (Pusekra), Dr. Rachmawan Budiarto, stated that wealth inequality is an issue in Indonesia and a global problem. According to him, out of the world’s population of 6.1 billion, approximately 1.1 billion are classified as poor.
More concerning, around 0.7% of the population controls 18.4% of the world’s wealth, while over 70% access only 2.7% of global wealth.
“This inequality highlights the need for more equitable and sustainable economic policies to ensure a fairer distribution of prosperity, particularly for marginalized communities,” Dr. Budiarto said during a lecture at UGM Campus Mosque on Thursday, Mar. 13, 2025, as part of the Safari Ilmu in Ramadan (Samudra) series.
In his lecture, ‘Inclusive Policies: Building a Sustainable Economy Without Leaving Marginalized Communities Behind,’ he presented an economic framework based on four core principles: monotheism (tauhid), balance, free will, and responsibility.
He explained that the principle of monotheism encourages economic actors not to focus solely on material profit but also to share wealth as a social function and avoid exploitation.
“In Islam, wealth is not just for personal gain but comes with social responsibility,” he noted.
The principle of balance, he continued, plays a crucial role in preventing social inequality.
“Islam urges people to avoid monopolies, capital centralization, and hoarding goods to inflate prices,” he explained.
Dr. Budiarto further elaborated on the principle of free will, which teaches that individuals have the freedom to make choices in life, although Allah SWT retains absolute authority.
This freedom, however, must be exercised with the awareness that every action has consequences.
Therefore, responsibility becomes the complementary principle in Islamic economics.
“Responsibility arises as a consequence of monotheism, balance, and free will. This applies both individually and collectively,” Dr. Budiarto said.
He suggested several steps to solve the challenges of poverty from an Islamic perspective.
First, people must be encouraged to work according to their skills and capabilities to boost productivity.
Second, more sustainable economic projects must be implemented to create business opportunities and jobs.
Third, exploitative practices such as usury, which harm the poor, should be avoided.
“Lastly, sound financial management must be applied so resources can be utilized optimally,” he added.
Additionally, he acknowledged that wealthy individuals play an important role in supporting the economy through charitable contributions like zakat, infaq, and sadaqah.
However, he emphasized the critical importance of properly utilizing the state budget (APBN) or baitul mal to ensure that economic policies genuinely improve public welfare.
By applying these Islamic economic principles, sustainable economic development can be achieved without leaving marginalized communities behind.
“Sustainability is not only about environmental preservation but also about ensuring that every individual has a fair chance to grow and achieve prosperity,” he concluded.
Author: Rahma Khoirunnisa
Editor: Gusti Grehenson
Post-editor: Lintang
Photographs: UGM Campus Mosque