FOREIGN INVESTMENT IN THE PERSPECTIVE OF ISLAMIC ECONOMICS: A COMPARATIVE LITERACY STUDY ON THE IMPACT OF FOREIGN INVESTMENT IN INDONESIA

Abstract

This study aims to evaluate the impact of foreign direct investment (FDI) in Indonesia through a comparative analysis between conventional economic perspectives and Islamic economic principles. The phenomenon studied is the trade-off between progressive macroeconomic growth and distribution inequality and potential environmental damage in the field. The research method used is qualitative descriptive with a library research approach. Secondary data is sourced from official reports of BPS Indonesia and the Ministry of Investment/BKPM, while normative qualitative data is collected from scientific literature and theological texts related to the concepts  of falah, shirkah, distributive justice, and sharia maqashid. Data analysis is carried out interactively through reduction, data presentation, and conclusion drawing using content and comparative analysis techniques. Key findings show that conventionally, FDI functions as  an engine of growth that increases GDP, absorbs labor (multiplier effect), and triggers technology transfer. However, from the perspective of Islamic economics, a duality is found: on the one hand, PMA provides benefits in asset protection (hifdz al-mal) and partnerships (shirkah) with MSMEs, but on the other hand, the concentration of investment that accumulates on the island of Java is contrary to the spirit of distributive justice (QS. Al-Hasyr: 7). In addition, the achievement of falah is threatened if the operation of the extractive sector triggers environmental damage (darar) and neglects the protection of life (hifdz an-nafs). The implications of this study emphasize the need for investment regulatory policy reform that not only pursues capital growth, but also integrates fair sharia parameters. The suggestion for further research is to conduct a direct empirical study on areas affected by the exploitation of the extractive sector.