Parallelism between Pancasila Economics and Sharia Economics

Being on par does not mean being identical. Pancasila Economics and Sharia Economics remain two distinct entities. While they share many similarities, they can also be clearly distinguished from one another. I agree with the view that Pancasila Economics and Sharia Economics cannot be directly compared, as Islam is a religion while Pancasila is an ideology; their conceptual foundations differ. Islam relies on the Quran and Hadith, whereas Pancasila Economics is grounded in the values ​​of the five Sila (principles). The Quran holds a supreme position, being the direct word of God—unchanged, undiminished, and authentic. Consequently, Syed Nawab Haider Naqvi argues that the Islamic economic system is fundamentally different from other economic systems in terms of ethics.

Clearly, the scope of Islam is broader than that of Pancasila, yet there are points of convergence and a mutually beneficial relationship between the two. If one asks which influences the other, it is evident that Islamic Economics has shaped Pancasila Economics (as well as Ekonomi Kerakyatan, or people-centered economics). "The Islamic economic system contributes to shaping people-centered economics."

Pancasila Economics and Sharia Economics: both incorporate social, moral, human, and divine components.

In this section, I highlight numerous writings supporting the view that Pancasila Economics and Sharia Economics share parallels across many aspects.

The common ground between Pancasila Economics and Islamic Economics lies in their emphasis on the human and divine dimensions, the simultaneous fulfillment of individual and social needs, and a balanced approach to material and spiritual well-being—going beyond mere rationality. These elements are absent in conventional, classical, neoclassical, capitalist, liberal, and neoliberal economic models. Mubyarto emphasizes religious morality and divine mandates, alongside justice aimed at social equity and the welfare of the people.

Chapra (with Islamic Economics) and Mubyarto (with Pancasila Economics) "agree" that economics must incorporate social and moral dimensions. In line with this, on a broader level, development must encompass aspects of human life and livelihood.

However, a weakness of both the Pancasila Economy and the Islamic Economy lies in the fact that neither has yet been tested through authentic, unadulterated implementation; the Islamic (or Sharia) economy as currently practiced remains intermingled with Western economic systems.

Common ground between these two economic systems is readily apparent, as they share fundamental principles and values: fostering societal welfare, promoting mutual assistance, and establishing an equitable economy that serves the common good.

According to Juhaya S. Pradja et al. (2021), it can be concluded that there is convergence between the values ​​of the Pancasila Economy and those of the Sharia Economy. Specifically: the value of divinity (Ketuhanan) aligns with the principle of the Divine (mabda’ al-tauhid); the value of humanity (Kemanusiaan) aligns with the principle of equality (mabda’ al-musawa); the value of unity (Persatuan) aligns with the principles of trustworthiness (mabda’ al-amanah) and honesty/truthfulness (mabda’ al-shidiq); the value of people-centeredness (Kerakyatan) aligns with the principles of documentation/written agreement (mabda’ al-kitabah) and public benefit/welfare (mabda’ al-mashlahah); and the value of justice (Keadilan) aligns with the principles of justice (mabda’ al-’adalah) and permissibility (mabda’ al-ibahah).

Thus, the Pancasila Economy and the Sharia Economy are not mutually opposed or negating forces; rather, they form a unified whole capable of synergy. Furthermore, Agus Salihin (2020), in his journal article "Integration and Interconnection of the Pancasila Economy and Islamic Economics," observes: "Historically, the emergence of Islamic economics in recent years reveals many similarities with Indonesia's economic constitution as enshrined in the 1945 Constitution; conversely, it differs from capitalist and socialist economic systems."

These constitutional economic similarities are evident in Article 33, which governs the fundamental principles of the Indonesian economy; it rejects the notion that the ends justify the means, mandating instead that economic activity be grounded in the principle of kinship (asas kekeluargaan). Similarly, Islamic economics places great emphasis on mutual assistance, togetherness, and brotherhood as guiding principles for economic activity.

Additionally, Muhammad Ali Akbar and Moh. Idil Ghufron (2019), in their paper "Synchronization of the Pancasila Economy and Islamic Economics," demonstrate that the Pancasila economy represents economic behavior rooted in the Pancasila ideology. The Pancasila economy teaches that realizing social justice—through shared welfare and prosperity—requires collective effort, as exemplified by the spirit of gotong-royong (mutual cooperation).

"...the Pancasila economy is an economic system that does not conflict with Islamic economics. Indeed, both systems share a common goal: the realization of shared welfare and social justice."

Furthermore, Muhammad Ali Akbar and Moh. Idil Ghufron (2019), in their paper "Synchronization of the Pancasila Economy and the Islamic Economy," demonstrate that the Pancasila economy represents economic behavior grounded in the ideology of Pancasila. The Pancasila economy teaches that realizing social justice—in the form of shared welfare and prosperity—requires collective effort, as exemplified by the practice of gotong-royong (mutual cooperation).

"...the Pancasila economy is an economic system that does not conflict with the Islamic economy; rather, both systems share a common goal: the realization of shared welfare and social justice."

A study by Alnashr and Muzayyanah (2016) reveals similarities in principle between the Pancasila economy as conceptualized by Mubyarto and that conceptualized by Muhammad Abdul Mannan—specifically, the principles of kinship and brotherhood. In Indonesia, these principles are implemented through the cooperative system.Both are economic systems that prioritize a spirit of kinship and justice. Regarding competition, neither condones the kind of unfettered rivalry that justifies any means to an end; instead, they require economic actors to heed religious and moral considerations and refrain from harming others through illegitimate practices.

Bambang Guritno et al. (2023) further confirm this:

“…an economic framework grounded in Islamic values ​​is highly relevant to the principles of the Pancasila economy, which represents a collective endeavor regarding relationships and cooperation among the Indonesian people.”

Furthermore, through a critical study examining evidence and authenticity regarding Islamic Economics, Pancasila, and welfare levels in Indonesia, Guritno et al. (2023) concluded that Islamic Economics offers a solution to economic crises.

“The universal values ​​of Islamic Economics (Sharia Economics)—which incorporate noble principles in the pursuit of economic welfare—are also an integral part of the Pancasila economic system.” The authors view the implementation of Islamic Economics in Indonesia as a manifestation of the Pancasila Economic System. I repeat: “the implementation of Islamic Economics as a manifestation of the Pancasila Economic System.” The first and fifth principles (Sila) of Pancasila embody values ​​that most closely align with the tenets of Islamic economics.

Both the Pancasila economy and Islamic economics are economic concepts whose foundations, characteristics, and systems align with the teachings of the Qur’an, the holy book of Islam. This “…can strengthen the conviction of the Indonesian people, dispelling any hesitation to practice the Pancasila economy—a noble legacy left by the nation’s founding fathers.”

 

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