9. Afkaruna_Masudi_Revisi 2 Muhammadiyah and Nahdlatul Ulama Contribution to the Islamic Economics Development in Indonesia Jurnal AFKARUNA Vol. 19 No. 1 June 2023 Department of Sharia Economics, Faculty of Islamic Studies, Universitas Muhammadiyah Yogyakarta, Indonesia masudi_moh@umy.ac.id DOI: https://doi.org/10.18196/afkaruna.v19i1.17820 Moh. Mas'udi ARTICLE HISTORY Received: 22 February 2023, Revised: 11 May 2023, Accepted: 27 June 2023, Published: 30 June 2023 Muhammadiyah and Nahdlatul Ulama are the two pillars of the Islamic movement in Indonesia. Muhammadiyah represents the modernist Islamic movement. Meanwhile, Nahdlatul Ulama represents the traditionalist Islamic movement. The role of both in da'wah activities of Islam in religious, educational, and social fields is crucial. In the context of Islamic economics, both contribute to the development of Islamic economics in Indonesia. Through a historical analysis, this study showed that Muhammadiyah and Nahdlatul Ulama have contributed to the Sharia economic development since before the independence of Indonesia in the context of Islamic economic thoughts and practices. With the spirit of the Qur’an, chapter al-Ma’un, the founder of Muhammadiyah, KH Ahmad Dahlan, has inspired Muhammadiyah members to implement Islamic economy in the forms of Islamic philanthropy, which remains preserved until today. At the same time, KH Hasyim Asy'ari, as the founder of Nahdlatul Ulama, initiated Nahdlatut Tujjar as an embryo for the birth of Nahdlatul Ulama. Keywords: Muhammadiyah, Nahdlatul Ulama, contribution, Islamic economics ABSTRACT The Islamic economics system in Indonesia has been practiced since the era of the sultanate in various areas of Indonesia. It became extinct when Indonesia entered the era of colonialism.1 Even the presence of Islamic economics, as practiced every day, is assumed to have come together with the coming of Islam alone through Arab, Persian, and Indian traders. Practices of Islamic teachings about trade (tijarah) are indicated by the carriers of the Islamic teachings.2 In the 19th and 20th centuries, Islamic countries faced severe political and social challenges since they must fight to release themselves from the shackles of European colonialism nations. Consequently, the problem economy has not yet become a serious concern for Muslim nations, including Indonesia. Indonesian independence in 1945 and global awareness in the Muslim world for restructuring the modern economy in line with Islamic principles in The 1970s and 1980s followed suit affected Muslims in restructuring institutions, economics, and finance following Islamic teachings. Unlike other Muslim countries, developments in Islamic economics and finance in Indonesia spelled out relatively late. Although the discourse, debate, and efforts are very dynamic and exciting, Indonesian authorities were passive at the first emergence of Islamic economics and finance in the 1980s and 1990s. They began to be more proactive with map strategy, way, synergized policy, INTRODUCTION framework-related laws, and regulations with Islamic economics and finance, because they are aware of its potential for the socio-economic development.3 Several parties, such as government, institution legislature, Islamic mass organizations, and Islamic scholars, have been playing various roles in the dynamics and development of Islamic economics in Indonesia. In order to better understand the roles of these parties in the development of Islamic economics in Indonesia, especially in the civil society context, this study aims to examine roles Muhammadiyah and Nahdlatul Ulama (abbreviated NU).4 This selection was motivated by the significant role of these organizations, both within the scope of Islamic society and the state of Indonesia in various sectors. Muhammadiyah and Nahdlatul Ulama are among Indonesia's largest Islamic religious organizations, which have received the attention of many academics from within and outside the country. There are names such as James L. Peacock (America), Alfian (Indonesia), Kim Hyung Jun (Korea), and Mitsuo Nakamura (Japan) for the study about Muhammadiyah and Andree Feillard (Germany), Zamahsari Dhofier (Indonesia), Greg Fealy (Australia), and Martin Van Bruinsen (Netherlands) for the study about Nahdlatul Ulama.5 Deliar Noer and Rifyal Ka’bah study, among others, Muhammadiyah as part of the Islamic modern movements and its traditional counterpart, Nahdlatul Ulama, by explaining their historical backgrounds, goals of establishing the organization, and methods in understanding Islam.6 However, the above studies discuss Muhammadiyah, NU, or both from the lens of politics, sociology, anthropology, theology, law, and education. The same applies to studies of Indonesian scholars such as Maman A. Majid B. et.al. (2018),7 Tasman Hamami (2021),8 Alexander R. Arifianto (2021),9 and Umiarso (2022).10 The study of the roles played by Muhammadiyah and NU in the context of economy is still limited. Among few studies in this economic field are conducted by Gwenaël Njoto-Feillard (2014) and Falik Isbah (2016).11 In this respect, this article will enrich the academic conversation of the roles of Islamic mass organization in Indonesia in the economic setting. This article employed a historical approach to the economic roles of Muhammadiyah and Nahdlatul Ulama, which will be divided into two periods: pre-independence and after-independence of Indonesia. There are at least two aspects that can be identified from the roles of Muhammadiyah and Nahdlatul Ulama in the development of Islamic economics, namely the historical and the organizational. These two aspects will be discussed using both primary and secondary sources available. METHODS The discussion about the contribution of Muhammadiyah and Nahdlatul Ulama in developing Islamic economics has two meanings. First, Islamic economics is understood as an economic activity based on Islamic teachings because Muhammadiyah and Nahdlatul Ulama are Islamic organizations. Second, Islamic economics is understood as a new phenomenon that emerged after the fatwa of legal interests by the MUI (Majlis Ulama Indonesia, Indonesian Ulema Council) in 2004. In order to understand their contributions better, it is necessary to learn about the organization's history, founders, and thoughts. It is a historical fact that KH Ahmad Dahlan pioneered the contribution of Muhammadiyah to the development of thoughts and movements in economics. Likewise, Nahdlatul Ulama's contribution to the evolvement of economic thoughts and movements was influenced by the thoughts of KH Hasyim Asy'ari. DISCUSSION 110 Vol. 19 No. 1 June 2023 1. Muhammadiyah Contributions Muhammadiyah is one of Indonesia's most significant Islamic movements, born on November 12, 1912, by KHA. Dahlan in Yogyakarta. As an Islamic movement, Muhammadiyah is also known as part of the tajdid movement (Islamic renewal movement), such as the Islamic Unity (Persis) and Al-Irsyad, which have the motto Return to Al-Qur'an and As-Sunnah. The current development of Muhammadiyah has spread to all provinces in Indonesia, rural and urban, and special branches have been established worldwide. In the centennial, Muhammadiyah has presented itself as an Islamic movement with many activities. Such activities cover various aspects of life spread in almost all corners of the country, both in rural and urban areas of Indonesia, even in several friendly countries. It is natural for researchers to see Muhammadiyah as a multifaceted Islamic movement. Alfian's study states that Muhammadiyah, as a multi-face gesture, has played three important interrelated roles: a movement for religious reform, an actor for social change, and as a political force.12 In line with that, Nakamura also views Muhammadiyah as a multifaceted movement that is not only engaged in education and health but also active in social, economic, political, and religious activities.13 The description above shows that Muhammadiyah is a movement for religious renewal. He is better known as the Islamic Renewal movement or the tajdid movement. It is in line with the Articles of Association of Muhammadiyah, which state: (1) Muhammadiyah is an Islamic movement, preaching good and evil and tajdid, based on the Al-Qur`an and As-Sunnah. (2) Muhammadiyah is based on Islam.14 In history, the Islamic reform movement or the tajdid movement has a long chain, starting from Ibnu Taimiyah, Muhammad bin Abdul Wahab, Muhammad Abduh, and Jamaludin Al-Afghani, to figures of the Islamic reform movement in Indonesia, such as KHA Dahlan. On the other hand, the long and in-depth history of Muhammadiyah shows the most prominent activities of the Muhammadiyah movement from its inception until its birth, especially in education and health, without neglecting other aspects such as social, economic, political, or religious, as stated by Nakamura. It is from these Education and Health activities that Muhammadiyah has many proud achievements. a. Early Thoughts in the Pre-Independence Period Muhammadiyah's involvement in the economic field can be traced from the founder of Muhammadiyah, namely KHA Dahlan, when teaching his students about Surah Al-Ma'un being taught repeatedly. From an economic perspective, the teachings of Surah Al-Ma'un have given birth to various economic philanthropy activities in Muhammadiyah. With the spirit of the Al-Ma'un Muhammadiyah Orphanage, the Muhammadiyah Nursing Home, the Muhammadiyah Hospital was born based on social generosity. In the current context, real economic philanthropy has materialized in the activities of the Muhammadiyah Amil Zakat Infaq Alms Institution (LAZISMU). There are also institutions related to economic actors, such as the Economic and Entrepreneurship Council (MEK), the Community Empowerment Council (MPM), the Disaster Management Agency (LPB), and the Social Services Council (MPS), all of which are based on the spirit of Al-Ma'un.15 The capacity of Ahmad Dahlan as a cleric as well as a trader has delivered economic activities as a means of spreading Muhammadiyah to various cities in Java in the beginning period. The growing economic mobility with the preaching of Muhammadiyah has inspired a native Minangkabau cleric, namely Haji Rasulullah, to develop Muhammadiyah in Minangkabau, West Sumatra. By 1921, Muhammadiyah had spread throughout Indonesia.16 111AFKARUNA KH. Ahmad Dahlan, known to be active in various organizations before 1912, the birth of Muhammadiyah. He was active as a member of Budi Utomo, a movement among indigenous Javanese scholars and had become a national movement born in 1908. He was also a member of Jami'at al-Khair, a benevolent association initiated by residents of Arab descent in Indonesia in 1905 KHA Dahlan was also active as a member of the Islamic Union, which forerunners came from the Islamic Trade Association organization that was born in Solo in 1911. In the management of SI Yogyakarta, KHA Dahlan had been his adviser. The Islamic Trade Association was founded by H. Samanhudi, motivated by the desire to compete with Chinese traders who monopolized the batik trade in Solo. This birth shows the strong indigenous economic drive to unite themselves in an organization. KHA Dahlan's involvement in the Origin of Islamic Unity (SI) from the Islamic Trade Union has given Muhammadiyah and its members an economic touch to strengthen the economy further. The positive impact is that Muhammadiyah members from the merchant group can provide convenience for various Muhammadiyah charitable efforts to support philanthropic movements imbued with the spirit of Al-Ma'un. The waqf movement in the early days of Muhammadiyah became very strong because the main base of supporters of the Muhammadiyah Movement was the merchant class, whose economy was relatively well established. Slowly enough, waqf, many of them owned by Muhammadiyah, are part of the waqf activities of the Muhammadiyah people from the merchant class, which are driven by the spirit of Al-Ma'un, which KHA Dahlan taught. After the death of KHA Dahlan, there were at least two events whose importance was directly seen for the development of Islamic economics. First, Muhammadiyah pioneered the organization of Hajj by the private sector in Indonesia. Before Indonesia's independence, Muhammadiyah had established the Hajj Assistance Section led by KH. Sujak. The 17th Muktamar Muhammadiyah in Minangkabau in 1930 recommended building its own cruise ship for Indonesian pilgrims. This shows that Muhammadiyah has thought about the economics of Hajj since before independence. Second, the leadership of Ibrahim (1923-1934) formed one of Muhammadiyah's charitable endeavors in the economic field called the Adzakirat Cooperative. Initially, this cooperative was formed to provide facilities for Aisyiyah (Muhammadiyah autonomous organization for women) in religion and the economy. Muktamar Muhammadiyah, in 1933 in Semarang decided:17 Third, concerning the economic issues, especially those related to finance with the legal aspects of bank interest. In the early days of the birth of Muhammadiyah, the Dutch colonizers initiated the birth of conventional banks in colonial countries, which have survived to this day. Concerning conventional banking practices attached to bank interest, the initial thoughts of Islamic economics in Muhammadiyah can be traced from the discussion of religious issues regarding bank interest laws. This idea is still an aspect of legal thinking and has yet to be implemented. It first appeared in 1937 by Mas Mansur, who served as Hoefdbestur Moehamadijah. The idea was outlined in article A in the March 1, 1937 issue of Broadcast Magazine. Mas Mansur emphatically stated in his writings that bank interest is forbidden (haram). Even so, because the existing banks played an important role in driving economic activity, based on the use of “Oeroesan Adzakirat, that is jang moelanja cursus kaoem iboe-iboe the toea-toea, oentoek spend he remembered to Toehan Allah, laloe made oeroesan goena support the treasury of ' Aisjijah as well as stage the gedongs”. (Oeroesan Adzakirat is the basic course for old mothers to increase their remembrance of God, then used as an institution to support Aisyiyah's treasury and the establishment of it’s office building) 112 Vol. 19 No. 1 June 2023 bank interest, it was considered an emergency (dharurat). Mas Mansur appealed to immediately find a solution to establish a bank that complies with Sharia principles.18 The above description above shows that the idea of Islamic economics in the prehistoric period of independence was pioneered by the founder of Muhammadiyah, namely KHA Dahlan, based on the spirit of the teachings of Surat Al-Ma'un. This idea gave birth to various activities based on economic philanthropy in Muhammadiyah—the establishment of the Adz-Dzakirat Cooperative during the leadership of KH. Abraham has provided a platform for economic activities for Aisyiyah's women and Mas Mansur's thoughts on bank interest, reflecting efforts to respond to the reality of conventional social banking, which cannot be separated from money interest. b. PostIndependence Organizationally, Muhammadiyah's thoughts on post-independence bank interest began to surface in 1968 at the Muhammadiyah Special Conference (religious issues) in Sidoarjo, East Java. It was decided in the Deliberation that banks with usury systems are unlawful. Second, the interest given by state-owned banks during the case deliberation. Third, suggest to PP Muhammadiyah try a bank that conforms to Islamic qa'idah (principles).19 In 1976, Muhammadiyah gave birth to economic guidelines for Muhammadiyah members, which resulted from the Muhammadiyah Tarjih Deliberation in Garut, West Java. This guide is entitled "Al-Amwal fii al-Islam," a treasure trove from an Islamic point of view. This document explains that the Islamic religion has taught about wealth with all its problems, both in terms of meaning, position, and function, as well as aspects of usability and usability, from where and with the method how it was obtained and so on.20 The discussion about money interest by Muhammadiyah reappeared in 1989. Discussions were more developed in cooperatives. In the deliberations, it was decided that interest in cooperatives is allowed with consideration of the costs in credit cooperatives, not including usury.21 Muhammadiyah's discussion of post-independence Islamic economics in Indonesia shows that since the beginning of independence until 1989, Muhammadiyah has not come into contact with the idea of Islamic economics as understood by contemporary Muslims as a new entity that is different from conventional economics. One of the characteristics of the Islamic economic tree that comes from Islamic teachings, justice, and interest is the same as usury. The emergence of Sharia economics in the 80s in Indonesia has yet to become a discourse of thought among Muhammadiyah scholars and academics, except for a few people, such as KH Ahmad Azhar Basyir, who is still a member of the International Conference of Jurists. Thus, the idea of Islamic economics, as understood by Muslims, has not yet become a religious discourse in Muhammadiyah. The conference (muktamar), especially in Sidoarjo, East Java, in 1968, decided that the law on bank interest was in doubt. Meanwhile, when discussing interest cooperatives at the Tarjih National Conference in Malang in 1989, it was stated that interest cooperatives were legally mubah. c. Present Context The Indonesian Ulama Council (Majelis Ulama Indonesia or MUI) is an independent community institution that accommodates Islamic scholars, zuama, and scholars to guide, mentor, and foster Muslims in Indonesia. The existence of MUI has involved Islamic organizations in Indonesia to be part of it, including Muhammadiyah. From time to time, many Muhammadiyah leaders in each MUI management have planted seeds of awareness to become an integral part of the Islamic economic movement in Indonesia. The birth of the National Sharia Council - Indonesian Ulama Council 113AFKARUNA (DSN-MUI), which was formed in order to realize the aspirations of Muslims regarding economic issues and encourage the application of Islamic teachings in the economic/financial sector, which is carried out according to the guidance of Islamic law further strengthens the involvement of many Muhammadiyah figures to take part in overseeing the economy Islam in Indonesia. There are Muhammadiyah figures who are actively involved in the Islamic Economic Movement at MUI, such as Prof. Dr. Din Syamsudin, MA., Prof. Dr. Yunahar Ilyas, MA., Dr. Anwar Abbas, M.Ag., Prof. Dr. Fathurrahman Djamil, MA., Prof. Dr. Jaih Mubarok, SH., MA., Prof. Dr. Syamsul Anwar, MA, as well as many other figures. Following their respective capacities, these figures are an integral part of efforts to develop the Islamic economy in Indonesia. Along with the development of the Islamic economic movement in Indonesia, especially in the financial sector after the establishment of Bank Muamalat Indonesia in 1991 and the 2004 MUI fatwa regarding haram bank interest, the Tarjih Council and the Tajdid Central Executive of Muhammadiyah (the institution authorized in religious matters). In 2006, the institution issued a fatwa against money interest. The fatwa dictum states that Muhammadiyah needs to be actively involved in developing and advocating Islamic economics, bank interest (riba), and encouraging existing Islamic financial institutions. It also must continue to strive to improve operational conformity based on Sharia principles and encourage Muhammadiyah members, in particular, to be pleased with Sharia principles and appreciation of Sharia economics.22 The explanation above shows that as an organization, Muhammadiyah passed the Tarjih and Tajdid Councils, which positively responded to the emergence of a bank interest fatwa by the MUI in 2004. After two years of operation, Muhammadiyah tried to issue a fatwa on bank interest that was haram in 2006 so that the Tarjih Council fatwa and Tajdid regarding illegitimate bank interest in 2006 obtained legality in the organizational hierarchy, and the discussion on illegitimate bank interest was scheduled for the Tarjih Muhammadiyah XXVII National Conference (Munas) in Malang in 2010. It turned out that the Tarjih National Conference in Malang disagreed with the fatwa made by the Tarjih Council in 2006. The XXVII Tanfidz Tarjih Conference in Malang stated that "Regarding the issue of interest, especially bank interest, needs to be studied more deeply, and as a temporary attitude to the fatwa of the Tarjih Council No. 08 of 2006, which confirms that interest is usury.23 Referring to the 2006 PP Muhammadiyah Fatwa of the Tarjih and Tajdid Council concerning the Bank Interest Law and positioning Muhammadiyah as one of the most prominent Islamic movements, Muhammadiyah has become an organization committed to developing the Islamic economy in Indonesia. The fatwa regarding unlawful bank interest based on Fatwa Tarjih Number 6 of 2006 says that interest (interest) is usury because (1) it is an addition to the principal capital lent, even though Allah says, and if you repent (from taking usury), then for you your treasure tree; (2) Additions that are binding and promise, while those who are willing and do not promise are not included in usury. In addition, it was also stated that Muslims, in general, and Muhammadiyah members, in particular, should increase their appreciation of the principles of a Sharia-based economy and develop a cultural economy based on Sharia values.24 The Central Leadership of Muhammadiyah manifests appreciation for the Sharia economy within Muhammadiyah by cooperating with seven Sharia banks consisting of Bank Syariah Mandiri, Bank Syariah Bukopin, Bank Muamalat Indonesia, Bank BRI Syariah, Bank BNI Syariah, Bank BTN Syariah, Bank Danamon Syariah, and other sharia banks to be determined later. It is done in the context of implementing an integrated fund management system for cash management services at every level, element, and Muhammadiyah's charitable business. The awareness to realize this collaboration with 114 Vol. 19 No. 1 June 2023 Islamic banks is further strengthened by the existence of a circular letter from PP Muhammadiyah to a) Assemblies, institutions, and autonomous organizations at the central level, b) Heads of regions, regions, branches, and branches, c) Muhammadiyah's business units to open accounts and transfer accounts from conventional banks to Muhammadiyah partner Islamic banks. There is a Muhammadiyah Leadership Assistant Unit which is mandated to deal with economic problems Muhammadiyah members, namely the Economic and Entrepreneurship Council of PP Muhammadiyah, have initiated the growth of Baitut Tamwil Muhammadiyah (BTM) and Islamic Rural Bank (Bank Pembiayaan Rakyat Syariah) as an effort to empower the people's economy. In contrast to other Islamic microfinance institutions that use the term Baitul Mal wat Tamwil (BMT), the Baitul Mal affairs have been handed over to the Amil Zakat Infak and Alms Muhammadiyah Institution (Lazismu). Thus it is developed on the tamwil aspect. Networks between BTM nationally have been accommodated in the Main Baitut Tamwil Muhammadiyah. This network has spread in provinces in Indonesia. The existence of BTM is an implementation of the PP Muhammadiyah Board of Tarjih and Tajdid decision which prohibits bank interest, as well as a best practice for Muhammadiyah and its citizens in running the Islamic financial system. The most apparent aspect of Muhammadiyah's contribution to the development of Islamic economics is establishing an Islamic economics study program at Muhammadiyah University. From the Islamic economics study program in various concentrations, ideas, thoughts, discourses, research, and studies on Islamic economics have developed. The involvement of Muhammadiyah activists in institutions related to the Islamic economic movement is inevitable, such as being part of the Association of Islamic Economic Experts (IAEI), Islamic Economic Society (MES), Islamic Economic Intellectual Forum (FIES), Islamic Economics Lecturer Association ( ADESY). The description above shows that Muhammadiyah has contributed to the development of the Islamic economy in Indonesia. Externally, the presence of Muhammadiyah figures who are members of the MUI is the forerunner to the growth and development of the Islamic economy in Indonesia. Internally Internally, the contribution is proven in the legal aspect, a Tarjih fatwa of bank interest, and Muhammadiyah's policy to support Indonesia's Islamic economic and financial system within the structural organization. 2. Nahdlatul Ulama Contributions Nahdlatul Ulama is one of the most prominent Islamic movements in Indonesia, which was born on January 31, 1926, in Surabaya. The founding figure is KH. Hasyim Asy'ari, a scholar from Jombang, East Java. As an Islamic movement, Nahdlatul Ulama is also known as a traditional Islamic movement that strives to preserve the ahlussunnah wal jama'ah ideology. Since its formation, Nahdlatul Ulama has become an obstacle to modern Islamic thought's spread to Java villages. Since the late 1920s, it has reached a relatively stable condition, namely that the modernists have concentrated their da'wah in urban areas. At the same time, Nahdlatul Ulama has been content to attract followers from rural areas.25 Nahdlatul Ulama is an Islamic movement in Indonesia as a legal entity that operates religious, educational, and social associations. Today's developments show that Nahdlatul Ulama has spread across all provinces in Indonesia. There have been many Special Branch Leaders of Nahdlatul Ulama abroad, in Asia, Australia, Africa, Europe, and America. Sutisna stated that Nahdlatul Ulama was born not only with religious traditions, nationalism, and thought but also with economic power. These three foundations became the pillars of the founding of Nahdlatul Ulama in 1926 and are often referred to as the three supporting pillars of the founding of Nahdlatul Ulama. The three main pillars are (1) 115AFKARUNA Nahdlatul Wathan, as the Spirit of Nationalism and Politics, (2) Tashwirul Afkar, as the Spirit of Scientific and Religious Thought; and (3) Nahdlatut Tujjar, as the Spirit of Economic Empowerment.26 a. Pre-Independence Nahdlatut Tujjar, or Resurrection Traders, is a movement to revive the ummah's economy or lift the economy of Muslims, which cannot be separated from the birth of Nahdlatul Ulama. Among the founding figures is KH. Hasyim Asy'ari, KH. Abdul Wahab Hasbullah, and KH. Bisri Syamsuri, all three are East Javanese scholars. The emergence of Nahdlatut Tujjar as a pillar for the birth of Nahdlatul Ulama shows that the economic aspect is the main focus for the formation of Nahdlatul Ulama. In its journey, the three pillars needed to be running in balance. One of the orientation pillars is more advanced than the other pillars. During the approximately one century since Nahdlatul Ulama's existence, political orientation received a more significant portion, so the portion of development thinking through education and economic empowerment of the people needed to be addressed. The budget states that in the economic field, trying to increase people's income and employment/business for welfare distribution.27 The 1927 Articles of Association of Nahdlatul Ulama stated that Nahdlatul Ulama aims to strengthen the faith of Muslims in one of the four schools of thought and carry out Islamic activities that benefit its members according to Islamic teachings. The activities carried out include: (1) Strengthening unity among fellow scholars who are still loyal to the school's teachings; (2) Delivering directions on the types of books/books taught in Islamic educational institutions; (3) The spread of Islamic teachings following the demands of the four schools of thought; (4) Increase the number of madrasas and improve the organization; (5) Assisting in constructing mosques and Islamic boarding schools; and (6) Accompanying/caring for orphans and the poor. In addition, it also tries the steps of establishing a trading business entity Using the advanced economy of Nahdlatul Ulama members.28 The 1927 Nahdlatul Ulama Statutes imply two critical aspects concerning the economy. First, carrying out activities that benefit its members following Islamic teachings. The word "profitable" can be interpreted as the economic value provided by Islamic teachings. Thus, the scope of Islamic economics at the time of the birth of Nahdlatutl Ulama became more straightforward and immediately practicable in everyday life. Secondly, establishing a trading business entity to advance the economy of Nahdlatul Ulama members. It implies that the desired economy - which is being promoted - is an economy characterized by collective activity, not individual characteristics, because Muslims have bound themselves in an organization. Legal aspects of the economic field have been seriously discussed since its inception. The Nahdlatul Ulama II congress in Surabaya in 1927 decided that the legal interest bank was the same as the mortgage law stipulated in the congress. The results of the decision of the Nahdlatul Ulama II Conference in Surabaya regarding pawnshops resulted in three opinions, namely: 1. Prohibited (haram),since it includes debt billed as profit (rent). 2. Lawful (halal), because there are no conditions when contracting, according to well-known legal experts, the prevailing customs are not included as provisions. 3. Doubtful (shubhat) because according to jurists, there are still differences of opinion. As an important note in decision-making deliberations, being more careful can be done by taking an opinion for those who prohibit it.29 116 Vol. 19 No. 1 June 2023 b. Post Independence A significant event related to the independence of the Republic of Indonesia in 1945 was the issuance of a fatwa by the founder of Nahdlatul Ulama, KH Hasyim Asy'ari. He issued two very important fatwas. First, he gave a fatwa that the war against the Dutch was a jihad (holy war), and second, he prohibited Indonesian Muslims from performing the pilgrimage on Dutch ships.31 The prohibition on using Dutch ships for pilgrimages shows that the spirit of independence should have developed the economy at the beginning of Indonesian independence. With the independence of the Unitary State of the Republic of Indonesia, it is necessary to implement social and economic changes based on national independence. Another important event was the National Conference of 'Alim Ulama Nahdlatul Ulama in Bandar Lampung in 1992, which resulted in three opinions regarding the law of bank interest: “First the opinion is the same between bank interest and usury absolutely, so the law is unlawful. Second is the opinion that does not equate bank interest with usury, so the law is permissible. Third, the opinion stating that the legitimacy of bank interest is doubtful. Nonetheless, the National Assembly deems it necessary to find a way out to determine a banking system that complies with Islamic law”.32 Regarding the decision of the Nahdlatul Ulama National Alim Ulama Conference in Bandar Lampung in 1992 relating to the law of interest on money, Nahdlatul Ulama has remained firm in its views since before the independence of the Republic of Indonesia until 1992. The consequence of this fatwa is that the Nahdlatul Ulama Executive Board has no policy to support development, such as the Islamic economy, Muhammadiyah, and the Indonesian Ulema Council (MUI). It is because the efforts to develop Islamic economics within Nahdlatul Ulama are individual and not institutional since there is a non-singular interpretation of bank interest laws. Nonetheless, for Nahdliyin members who think that bank interest is haram, it is open for them to contribute to developing Indonesia's Sharia economy. The existence of the Indonesian Ulema Council (MUI) as a non-governmental organization that accommodates Islamic scholars, zuama, and intellectuals to guide, foster, and nurture Muslims in Indonesia is a loophole for Nahdlatul Ulama figures who play an active role in the development of the Islamic economy. MUI has involved Islamic organizations in Indonesia to be part of it, including Nahdlatul Ulama. The involvement of several Nahdlatul Ulama figures in every MUI management from Apart from Nahdlatut Tujjar, whose journey has been in the doldrums, there is a business economy named the Syirkah Muawanah Cooperative, founded in the pre-independence era. Researchers _ differ on the year of birth. Some say it was founded in 1929, and some say that the Syirkah Muawanah Cooperative is an economic institution affiliated with Nahdlatul Ulama which was only founded in 1937 at the initiative of the Chairman of Tanfidz Nahdlatul Ulama, KH Mahfoedz Sidiq. The Syirkah Muawanah Cooperative aims to open trade links between the many Islamic boarding schools that produce agricultural products and other small businesses. By researchers, Syirkah Muawanah is considered a link in the chain of economic development for Nahdlatul Ulama residents starting from Nahdlatut Tujar.30 The description above indicates that the birth of NU in 1926 was preceded by the birth of Nahdlatut Tujjar in 1918. It shows the economic awareness of the founding figures of Nahdlatul Ulama. It is just that in the development of Nahdlatut Tujjar, they needed an adequate portion to grow and develop with Nahdlatul Ulama. As an Islamic organization born during the Dutch colonial period, Nahdlatul Ulama is also very concerned about the realities of existing economic developments. Regarding interest in money, Nahdlatul Ulama discussed it later in 1927. Meanwhile, Syirkah Muawanah, born in 1937, has inspired Nahdlatutl Ulama from time to time to develop the Nahdliyin people's economy in the form of cooperatives. 117AFKARUNA time to time has planted seeds of awareness to become an integral part of the Islamic economic movement in Indonesia. The birth of the National Sharia Council - Indonesian Ulema Council (DSN-MUI), which was formed in order to realize the aspirations of Muslims regarding economic issues and encourage the application of Islamic teachings in the economic/financial sector, which is carried out according to Islamic sharia guidance further strengthens the involvement of many Nahdlatul Ulama figures to take part in overseeing Islamic economics in Indonesia. Nahdlatul Ulama figures are actively involved in the Islamic economic movement at the MUI, such as KH. Ali Yafi, KH. Sahal Mahfudz, KH. Ma'ruf Amin, as well as some other figures. By their respective capacities, these figures are an integral part of efforts to develop the Islamic economy in Indonesia. Externally, the contribution of Nahdlatul Ulama figures involved in MUI has become the forerunner of the growth and development of the Islamic economy in Indonesia. The peak of the involvement is seen in the Nahdlatul Ulama figure currently serving as a vice president, KH. Ma'ruf Amin. He and Jokowi as president, have initiated the existence of the National Sharia Economic and Financial Committee (KNEKS). As a Nahdlatul Ulama figure who has served as a Chair of the Indonesian Ulema Council and a Chair of the MUI National Sharia Council, he has been concerned about the Sharia economy becoming part of national economic development. The existence of Islamic Boarding School Cooperatives (Koperasi Pondok Pesantren or Kopontren) is a concrete manifestation of the development of the Islamic micro in the real economic sector, in addition to the Baitul Mal wat Tamwil (BMT) and the Sharia People's Financing Bank (BPRS) which Nahdliyin residents initiated have also given Nahdlatul Ulama its color in developing the Islamic economy in Indonesia. Even though there are different orientations in the history of the birth of Muhammadiyah and Nahdlatul Ulama, in recent developments, both have become the two most significant Islamic movements in Indonesia, which complement each other in the context of the development of Islamic economics in Indonesia. Muhammadiyah and Nahdlatul Ulama made a real contribution to developing the Islamic economy in Indonesia. During the pre-independence period, both had expressions to build the people's economy in different forms. The Al-Ma'un's spirit has inspired various Muhammadiyah activities based on economic philanthropy. This Nahdlatut Tujjar activity became the forerunner to the birth of Nahdlatul Ulama in economic empowerment. Muhammadiyah and Nahdlatul Ulama studied the legal aspects of money interest as an integral part of conventional economic practices in colonial countries. NU discussed it later in 1927, while Muhammadiyah was only legalized in 1937 on the ideas of KH Mas Mansur. Economic business in the post-independence period showed little economic activity. The most obvious effort is in legal studies to obtain different decision rates between these two Islamic organizations. Muhammadiyah concerning money interest was doubted by the state in 1968. However, the cooperatives' interest was declared permissible legally in 1989 and then declared haram in 2006, as Nahdlatul Ulama in 1992 still adhered to the old view, which condemned interest in money as haram, doubtful, and permissible. Muhammadiyah's fatwa regarding unlawful bank interest has been followed up by a policy by the Central Leadership of Muhammadiyah to support Sharia banking while at the same time encouraging the birth of Islamic Microfinance institutions. As for Nahdlatul Ulama, it has been maintaining its fatwa against bank interests since its inception until now. This organizational stance is followed by personal or cultural supports for the development of Islamic economy in the organization. The emergence of financial institutions within NU, which primarily come from the "ijtihād" of individual members and affiliated institutions such as Pesantren CONCLUSION 118 Vol. 19 No. 1 June 2023 Sidogiri that has a developed Baitul Mal wa Tamwil (BMT), shows cultural strengths of NU compared to its structural-organizational role in the development of Islamic economics. In this regard, NU as an organization should increase its organizational role so that it can maximize its combined cultural and organizational contributions to the development of Indonesian Islamic economics. This is feasible since several NU figures actively involved in the MUI National Sharia Council (DSN), which plays a crucial role in the development of the Islamic economics in the country. As it is shown in the above discussion, Muhammadiyah’s contribution to the Islamic economy is more structural and organizational, while NU's contribution to the Islamic economy is more cultural. It is hoped that each can optimize their roles and contributions to the development of Islamic economy through their combined organizational and cultural resources. 119AFKARUNA ENDNOTES Hafas Furqani, “The Current Situation of Islamic Economics in Indonesia,” IKAM Reports 5, no. 5 (2017), https://ikam.org.tr/the-current-situation-of-islamic-economics-in-indonesia. Cahyono Bayu Aji, Muhammad Yafiz, and Sukiati, “Pemikiran Ekonomi Islam Indonesia (Studi Pemikiran Cendekiawan Muslim Indonesia Era Pra-Kemerdekaan-Orde Baru),” Al Muamalat Jurnal Hukum Ekonomi Syariah 2, no. 2 (2017): 35–51. The birth of National Sharia Finance Committee (KNKS), which changed into The National Sharia Economic and Finance Committee (KNEKS), is growing and strengthening government involvement in Islamic economics. See Mohammad Syifa Amin Widigdo and Awang Azman Awang Pawi, "“Reason” of political and religious moderation in the book of Ghiyāth al-Umam by al-Juwaynī and its contemporary Southeast Asian context," Cogent Arts & Humanities 10, no. 1 (2023): 10, https://dx.doi.org/10.1080/23311983.2023.2223815. See footnote number 1 and 2. It mentions that Muhammadiyah is “the oldest “modernist” Islamic organization in Indonesia. This was established by K. H. Ahmad Dahlan on 18 November 1912 in a response to both challenges of modern colonialism and religious traditionalism. After K.H. Ahmad Dahlan (d. 1923) was encountering and inspired by Islamic reformation thought of Muhammad Abduh (d. 1905) and Rashid Rida (d.1935) in Egypt, he established Muhammadiyah to face modern educational and social challenges. In educational and social context, K.H. Ahmad Dahlan and his colleagues in Muhammadiyah founded a modern classroom-based school, initiated philanthropic organization named PKO, and formed a women’s organization called Aisyiyah.” Meanwhile NU is understood as “the largest “traditional” Islamic organization in Indonesia, which was established on 13 January 1926 (16 Rajab 1344 H) by two Indonesian Muslim scholars (ulama’), K.H. Hasyim Asy’ari and K.H. Abdul Wahab Chasbullah. The incep-tion of NU was essentially an institutionalization of Muslim scholars’ madrasah (pesantren) network that had been formed decades or centuries earlier. In the Islamic doctrinal context, the ulama’ of NU adhere to the doctrines of ahl al-sunnah wa al-jama’ah (people who follow the tradition of the Prophet and become a member of Muslim community).” James L. Peacock, Purifying the Faith: The Muhammadiyah Movement in Indonesian (California: Cummings, 1978); Alfian, Muhammadiyah: The Political Behaviour of a Muslim Modernist Organization Under Dutch Colonialism (Yogyakarta: Gadjah Mada University Press, 1989); Kim Hyung-Jun, Reformist Muslims in Yogyakarta Village: The Islamic Transformation of Contemporary Socio-Religious Life (Canberra: ANU-E Press, 2007); Mitsuo Nakamura, The Crescent Arises Over the Banyan Tree A Study of Muhammadiyah Movement in Central Town of Javanese, c. 1912s-2010, 2nd enlarg (Singapore: ISEAS, 2012); Andree Feillard, NU Vis-a-Vis Negara: Pencarian Isi, Bentuk Dan Makna (Yogyakarta: LKis, 1999); Zamakhsyari Dhofier, Tradisi Pesantren: Studi Tentang Pandangan Hidup Kyai (Jakarta: LP3ES, 1982); Greg Barton Greg Fealy, Nahdlatul Ulama, Traditional Islam and Modernity in Indonesia (Australia: Monash Asia Institute Monash University, 1996); Martin van Bruinessen, NU: Tradisi, Relasi-Relasi Kuasa Pencarian Wacana Baru (Yogyakarta: LKis, 1994). Deliar Noer, Modern Islamic Movements in Indonesia 1900-1942, (Jakarta: LP3ES, 1998); Rifyal Ka’bah, Islamic Law in Indonesia, (Jakarta: Yarsi University, 1998). Maman A. Majid B; Somariah F; Sintha W, “Muhammadiyah- Nahdlatul Ulama (NU): Monumental Cultural Creativity Heritage of the World Religion,” Epistemé: Jurnal Pengembangan Ilmu Keislaman 13, no. 1 (2018): 173–93, https://doi.org/10.21274/epis.2018.13.1.173-193. Tasman Hamami, “Muhammadiyah and Nahdlatul Ulama Education: Two Main Pillars of National Education in Indonesia,” Jurnal Pendidikan Agama Islam 18, no. 2 (2021): 307–30, https://doi.org/10.14421/jpai.2021.182-06. Alexander R. Arifianto, “From Ideological to Political Sectarianism: Nahdlatul Ulama, Muhammadiyah, and the State 1 2 3 4 5 6 7 8 9 120 Vol. 19 No. 1 June 2023 in Indonesia,” Religion, State and Society 49, no. 2 (2021): 126–41, https://doi.org/10.1080/09637494.2021.1902247. Umiarso, “Socio-Cultural Transformation of Muhammadiyah and Nahdlatul Ulama Communities in East Java Prismatic Society,” Millatī, Journal of Islamic Studies and Humanities 7, no. 1 (2022): 67–83, https://doi.org/10.18326/mlt.v7i1. Gwenaël Njoto-Feillard, “Financing Muhammadiyah: The Early Economic Endeavours of a Muslim Modernist Mass Organization in Indonesia (1920s-1960s),” Studia Islamika 21, no. 1 (2014); M Falikul Isbah, “Examining the Socio-Economic Role of Islamic Boarding Schools (Pesantren) in Indonesia” (Ph.D Thesis, UNSW Canberra, 2016). Alfian, Muhammadiyah: The Political Behaviour of a Muslim Modernist Organization Under Dutch Colonialism, 5. Nakamura, The Crescent Arises Over the Banyan Tree A Study of Muhammadiyah Movement in Central Town of Javanese, c. 1912s-2010. Central Board of Muhammadiyah, “Muhammadiyah Statutes Article 1” (n.d.). Central Board of Muhammadiyah, “The Report of Central Board Muhammadiyah at the 48th Muhammadiyah Muktamar in Surakarta,” 2022. Noer, Modern Islamic Movements in Indonesia 1900-1942, 87. Hilman Latief, “Al-Amwal Fi Al-Islam: Hasil Muktamar Majelis Tarjih Muhammadiyah Di Sidoarjo (1968) Dan Garut (1976),” in Genealogi Pemikiran Dan Ekonomi Islam Di Indonesia Konsepsi Keadilan Dan Proyeksi Kebangsaan, ed. Hilman Latief Mukhlis Rahmanto (Yogyakarta: Adesy & IB Times, 2021), 233. Syamsul Anwar, “Percepatan Perkembangan Bank Syariah Di Indonesia Kenapa Harus?,” Jurnal Tarjih Dan Pengembangan Pemikiran Islam 4, no. 1 (2002). Syamsul Anwar, “Percepatan Perkembangan Bank Syariah Di Indonesia Kenapa Harus?,” Jurnal Tarjih Dan Pengembangan Pemikiran Islam 4, no. 1 (2002). Hilman Latief and Mukhlis Rahmanto, Ibid., p. 229. Himpunan Putusan Tarjih (Malang: Pimpinan Daerah Muhammadiyah Kota Malang, 2000), 297–302. Muhammadiyah, Himpunan Putusan Tarjih, 204. Majelis Tarjih dan Tajdid Muhammadiyah, Himpunan Putusan Tarjih Jilid 3 (Yogyakarta: Suara Muhammadiyah, 2018), 197. Ibid., Muhammadiyah, 203. Dhofier, Tradisi Pesantren: Studi Tentang Pandangan Hidup Kyai, 98. Didin Sutisna, “Komunikasi Nahdlatul Ulama Dalam Pengembangan Ekonomi Umat,” Communicatus: Jurnal Ilmu Komunikasi 2, no. 1 (2019): 17–34, https://doi.org/10.15575/cjik.v2i1.4961. “Statuten Perkoempoelan Nahdhatoel Oelama” (1926). Dhofier, Tradisi Pesantren: Studi Tentang Pandangan Hidup Kyai, 96–97. Mahtumah, “Tinjauan Nahdlatul Ulama Dan Muhammadiyah Dalam Melihat Hukum Bunga Bank,” Asy-Syari`ah 2, no. 1 (2016): 85–132. Suryani Masayu M. Maisarah, “Gerakan Ekonomi Islam Masa Pra-Kemerdekaan: Semangat Nahdlatut Tujjar (1918),” in Genealogi Pemikiran Dan Ekonomi Islam Di Indonesia Konsepsi Keadilan Dan Proyeksi Kebangsaan, ed. Hilman Latief Mukhlis Rahmanto (ed.) (Yogyakarta: Adesy & IB Times, 2021). Dhofier, Tradisi Pesantren: Studi Tentang Pandangan Hidup Kyai. 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