Indonesia revises Hajj fund law to boost investment sustainability

Indonesia's Hajj Financial Management Law is undergoing revision, a move seen as strategic for bolstering the sustainability of Hajj funds. The focus is on optimizing investment management to be more effective, accountable, and firmly rooted in Sharia principles.

Nur Kholis, an Islamic Economics Observer from Universitas Islam Indonesia (UII), highlighted the importance of enhancing the management of the Hajj fund's "value of benefit." He cautioned that while increasing investment returns is crucial, it must not come at the expense of prudence. "The value of benefit must be optimized, but BPKH should not be tempted by high-risk investment instruments. Optimization must go hand-in-hand with risk mitigation," Kholis stated.

Kholis recalled the significant losses incurred by some pension funds due to investments in high-risk instruments. Therefore, he stressed that Hajj fund management must prioritize safe investment principles with measurable risks. He acknowledged the theoretical challenge of finding investments that are both secure and highly profitable, but noted that opportunities to increase the value of benefit remain through better portfolio diversification.

To achieve these goals, investment strategies must be adaptable to market dynamics, including fluctuations in commodity prices like gold, which are influenced by global factors. The revision aims to ensure the long-term financial health of the Hajj fund while adhering to Islamic financial guidelines.