The Halal Economy Governance Paradox in Indonesia: Between Market Ambition, Doctrinal Centralization, and Weak Regulatory-Technology Interoperability

Abstract

Indonesia aggressively positions itself as a global hub for the halal economy, launching national masterplans, halal industrial roadmaps, and sharia finance expansion policies. Yet, behind this ambition lies a governance paradox: halal-sharia legitimacy is highly centralized doctrinally through MUI and DSN-MUI fatwas, while regulatory-technology instruments that enable fast-cycle digital compliance remain weak. Classical theory frames fatwa as epistemically authoritative but non-binding, gaining legitimacy through social acceptance rather than legal coercion. In Indonesia, fatwa authority evolved into delegated upstream normative filters for financial product approval without direct statutory conversion into positive law. This model succeeded institutionally, but fintech, RegTech, AI screening, and blockchain audit demands expose a temporal and interoperability gap between market speed and deliberative fatwa issuance cycles. Comparative regulatory governance emphasizes risk-based orchestration and real-time validation engines, dimensions underexplored in Indonesia’s halal economic regulation scholarship. The study affirms that Indonesia holds strong doctrinal authority yet lacks digital governance connectors, risking normative usability amid exponential halal market disruption. The paper proposes governance-oriented normative reconstruction that encodes legitimacy into verifiable, auditable, and digitally enforceable standards without eroding institutional autonomy.