Internship's Interview at Islamic Development Bank (IDB) Indonesia

So far, its been good internship period, but now let me focus on the interview part as it's quite unforgettable.

It began with the registration which quite easy. All requirements are stated in their website, specifically in IDB CGO Indonesia's website and we can just email the application for the internship program. I think every application will be responded and the next step is interview. However, as its only an internship program, the interview is quite horror to be honest.

I was being interviewed with 4 of their employees; their communication officer, infrastructure specialist, representative of ITFC, and learning & development specialist. It begins with the normal interview like introducing myself, why IDB, and why internship at IDB. After that, it started to be a very technical discussion since my background also in Islamic finance.

Yet, the one that they highlighted the most is my bachelor degree's paper which about a technical analysis on moving averages and exponential smoothing. Their infrastructure specialist which after that I know as a former World Bank economist, really dig in into my paper. He asked like the methodology, data selection, and commented a lot on that. I need to explained really detail until he was satisfied with the answer.

The next matters that they observed on is my personality. Since my degree's CGPA is not even exceeds 3, they demanded to know what was the reason. I honestly answered that I took some period to adapt, and the cost of taking those period is my fallen cgpa at the early semester. Then they pushed me on adaptability as this internship has only several months to be completed. I tried to give a proof as I have improved a lot now with graduated well in my master degree. But in the end I can't give any satisfying answer yet I was not really worried on that since my track record shown that I succeed in overcoming those problems although I can't put it on words.

The most interesting part is the last ten minutes. One of them asked me "as I looked in your cv, you have good academic backgrounds, you seems knowledgeable, so why you want to take this internship?". I answered with basic statements such as "I want to get an exposure as a development banker and etc". Yet they pushed me again and again, asked why I don't take a real job. Then I opened my story that I recently rejected job offering from one of well-known banks in Indonesia. Everyone surprised because of my main answer; Riba. Then about ten minutes they gave a lot of 'advices' such as "as a youngsters, don't be too idealist" or "you have to understand both sides first, then you know what to improve". I was quite surprised knowing 'IDB' against this kind of idealism but I only kept nodding and gave a respect to their comments. It is done after that, they informed me that it takes a week for the decision to come.

Overall, its like 45 minutes interview which honesty for internship program is very heavy. However, as I asked the intern here, all of them have quite similar experience where it is a bit technical and demanding. You can also have a teleconference interview if you're not around Jakarta, however all administrative matters such as working permit or insurance are not covered. So somehow it can be said that only for Indonesian, yet still it officially opened globally since there is one Indian guy as an intern in my period. For what I know, there is no chance to be absorbed as IDB has a really strict employment guidelines.

However, it is a very good internship program as you will be working alongside experts on development bankers as well as the clients likes government and significant company's stakeholders. The tasks given also a very good exposure on creating the concept of development banking in Islamic way though it is A LOT. They're very good people that can keep you busy everyday haha. In a nutshell, for me it is a very valuable experience and it honestly one of the miracle that comes to me after rejecting conventional bank's offer. May Allah gives us all his miracle and keeps us in His way.

The Month of Ramadan

This writing is a brief summary of Khutbah from Prof Yusuf Saleem at my campus INCEIF for the Friday Prayer. He is my lecture on subject Shariah Aspects of Business and Finance, a very kind one he was if I have to explain it in a word. With a lot of Khutbah I listen recently on this holy month, I am so fascinated with his point of view on Ramadan.

As we all know Ramadan is said as a month that being waited vigorously for all Muslim, yet as a Muslim, do we know what we are waiting for? As it written in Quran chapter Al-Baqarah verse 183 "O you who have believed, decreed upon you is fasting as it was decreed upon those before you that you may become righteous", Muslims are summoned to fasting in Ramadan and it is one of the essential matter in this particular month. However, we actually can fasting anytime anywhere (with some considerations of course) if we want, not just in the month of Ramadan. Therefore, lets get back to the basic then.

One of the fundamental things about the blessed of Ramadan is the Quran is being revealed on this month. The sacred scripture of Muslim that come directly from their god, Allah swt, through his angel Jibril and his messenger Muhammad pbuh. It begin with the word 'Read' which Allah swt wants human to learn from it, feel it and study about it. Yet with the current situation that happen in the Muslim community which a huge poverty, corrupted governments, deadly extremist and of course the unrecognized social behavior on Halal and Haram matters, do we really take Quran as the ultimate guidance or we just put it as another book in library?

The situation happens in our economy, political and social activities are all being discussed in Quran. Muslim actually can applied it once and become the center of civilization back then, but what happened now is 180 degree different. Quran is revealed not without a reason. And it is revealed on the month of Ramadan is also not with no reasons. Ramadan is the time where we can unite from the time of Sahur until Maghrib and even until Taraweeh prayer. It is the time we realizing that Quran is not just a book to recite, it is a book to applied. It is a guidance directly from Allah swt and we have to read it as we are being given that revelation by our god personally.

Prof Yusuf Saleem then close his Khutbah with poem about Quran from Dr Pandit Shanker Dayal Sharma, a Hindus who are the ninth President of India.

It was a command for action.
You turned it into a book of prayer.

It was a Book to understand.
You read it without understanding.

It was a code for the living.
You turned it into a manifesto of the dead.

That which was a book of knowledge;
You abdicated to the ignoramus

It came to give knowledge of Creation.
You abandoned it to the madrassah.

It came to give life to dead nations.
You used it for seeking mercy for the dead.

O’ Muslims! What have you done?

Cash Waqf: The Sustainable Solution

Since all the previous posts are all about the big issues that seems impossible to solve, let me be clear on this post as I proposed one solution to clear the mess in our current economy and of course financial systems. Waqf is one of the tool that provides economics sustainability in the many Islamic caliphates and it really is a powerful tool. And this kind of contract is very possible for having the similar impact in our modern economy.

In terms of the Shariah ruling, waqf has been derived from the hadith which states three benefits that will be long last for human life; the useful knowledge, pray from good kids and unbreakable donation. People used to interpret that the point of unbreakable donation is a donation that brings good situation to the beneficiaries which they will bring similar situation to their related and so on. And yet I also was thought this kind of perception in the pass. However, when I've been exposed about this waqf, thanks to Prof. Magda Ismail in her economics class, just then I realized that the meaning of the hadith is about this instrument; Waqf.

Waqf as I mention is an unbreakable donation. It has three ground rules which are irrevocable, unalienable and perpetual. Therefore, waqf is somehow an ultimate donation that cannot be decrease in value and sometimes it was called to be an asset that own by Allah. Of course all asset is own by Allah, but for a man that already given an amanah by Allah to own the asset and gives it back to Him, it must has some special position by Allah.

Cash Waqf moreover is an innovation by Islamic scholars in response to the development of the modern economy. Although cash naturally is not suitable for waqf since it is revocable, Islamic finance scholars has developed the use of it and making it able to suit the waqf characteristics.

The transaction model is simple, just like endowment fund if I have to say. People will inject cash to the waqf fund, and this fund will be invested in the very secured manner. It is due to the first rule of waqf which is the asset cannot be decreasing in value. Its not even numbers, it is value thus the fund also should consider the inflation rate and so on. Then only the profit will be given to the beneficiaries, yet this profit will be given forever periodically without any some sort of maturity point. Therefore, it really is the instrument that creates sustainable development for the beneficiaries.

Practices of this cash waqf still hard to find due to the low literacy of waqf itself. However, some financial institutions like islamic banks or takaful have considered this type of contract to be included in their respective systems such as corporate waqf or waqf-based risk fund. However, people should practice more on this waqf since donation itself is not enough to give sustainability in our economy.

The System with No Interest

Here is my insight for what I have been exposed for the first semester.

Financial system was created to be the middle man for demand and supply activities. The system helps producer to sell their product in exchange of compensation to the buyers. That is as simple as that, yet now financial system looks so complicated with lots of instrument, complex regulations with really huge player that so difficult to be intervened as well. Why those things occurred when the text-book meaning is so easy to understand?

Let us go back to earlier sentence which basically come to the fundamental concept for this system in word 'exchange of compensation'. This means financial system is all about the system to regulate the medium of exchange to be acceptable and fit all around the globe. But still the question is why it can be so complicated now?

First, it can be so complicated because the presence of interest in the money. When the amount of the medium of exchange itself can be grow by time, there will happen an unfair transactions for either the supply or demand side. It also create a transfer of risk in the transaction, with the debtor will burden all the risk in its settlement of debt plus perpetual completion of interest. This problem can be seen in the case European financial crisis with ECB try to 'help' Greece by giving a loan but what happen is Greece fall deeper in their bankruptcy since they fail to pay the interest in the loan. That is why, Islam really put a concern about this issue since it creates an unjust society and it also acts of a worship as a Muslim since it stated In Quran chapter Al-Baqarah verse 275"but Allah has permitted sale and forbidden interest".

Second, many instrument that appear in this system create financial deepening that really hard to be controlled. With the combination inter-related financial instruments and the nature of transfer of risk in the transaction, a financial decisions in the society sometimes do not affected the real economy. For example, IMF's Global Financial Stability Report noted "growing recognition that dispersal of credit risk by banks to a broader and more diverse group of investor, has helped make banking and overall financial system more resilient". 15 months after this statement issued, Lehman Brothers was set to be bankrupt followed by the surprising financial crisis in 2008.

So how's the system actually should be?

Islamic finance offers some solutions which basically restructure all the things in the current financial market. However, it can be concluded that Islamic finance generally has two concepts which are the basis of its concept is from Quran and Sunnah, and it prohibits mainly four things; interest, uncertainty, gambling and prohibited matters. With these concepts, Islamic finance is said to offer a stable yet satisfying all the people in the system with the 'risk sharing' instruments.

First, it uses an equity contract with Mudharabah and Musharakah. This is a contract which rather than using interest to gain the profit, the capital provider will make the profit shared together. It is a very vital contract where Islamic economy is used to evolved with the performance of this contract. In the modern economy, this contract usually found in the investment sectors where the capital provider is willing to take a higher risks compare to risks that exposed in the saver sector likes banks.

Second, it uses an unilateral contract such as Zakat, Infaq, Waqf and Takaful. Unilateral contract is one of the most powerful contracts in Islamic economy. It was the basis of caliphate system where the fiscal policy is so strong and effectively distributed. Currently, the practice of this kind of contract is mostly to satisfy the religious needs of Muslims rather than become the fundamental point of economics stability. Even Takaful, the application out of its concept is still in minimal point which the practicability still copy-cat the Insurance company. However, Islamic finance definitely has a bright future on this particular sections where the volume of demand and supply on the circulation of the funds is always high.

Third, debt-based, lease-based, and some secondary contracts. This is the sections where Islamic finance player heavily penetrated where some people said 90% of Islamic banking product is based on these contracts.The reason is, it can easily mimicking the conventional banking of course. Yet, it is still the best choices since our economy is driven with banking activity.