Measuring IHDI in Indonesia and How the Impact of Investment and Government Expenditure

This research aims to measure Indonesia's Islamic Human Development Index (IHDI) and analyze the effect of domestic investment, foreign direct investment, and government expenditure on Indonesia's IHDI. IHDI is measured by calculating five indicators which are derivatives of maqashid sharia , namely the religion index, life index, family index, science index, and wealth index. Meanwhile, the analytical tool used to determine the effect of domestic investment, foreign direct investment, and government expenditure on IHDI is panel data regression. Observations were made in 34 provinces in Indonesia from 2015 to 2019. IHDI calculations show that Special DI Yogyakarta, North Kalimantan, Riau Islands, East Kalimantan, and DKI Jakarta are the top five provinces with the highest IHDI. Meanwhile, North Sumatra, Papua, East Java, South Sumatra, and East Nusa Tenggara are the five provinces with the lowest IHDI. The regression analysis results show that the IHDI in Indonesia is positively influenced by domestic investment and government expenditure, while foreign direct investment does not affect the IHDI in Indonesia.

Knowledge/access to knowledge; and 3) Decent living standards and economic resources (Aydin, 2017;Herianingrum et al., 2019;Rama & Yusuf, 2019). UNDP has never actually claimed that the concept of human development index (HDI) is a concept that perfectly describes human development, and many economic scientists then try to explore and look for a more comprehensive indicator model (Rama & Yusuf, 2019). The HDI concept can be considered too general and less comprehensive if the context is human-Muslim resources. HDI is a free-value concept and cannot describe the moral-spiritual side, which is the key to human-Islamic development (Aydin, 2017;Herianingrum et al., 2019). Therefore, Anto (2011) introduced the Islamic Human Development Index (IHDI) concept.
According to Anto (2011), IHDI is the right indicator to describe the conditions of development in a country with a Muslim majority population because the IHDI indicator model measures five essential aspects that describe the quality of life as a Muslim. These five essential aspects of Islamic economics are known as maqashid sharia. These five basic aspects are 1.) Religion Preservation (hifdzu ad-dien); 2.) Life Preservation (hifdzu an-nafs); 3.) Heredity Preservation (hifdzu an-nasl); 4.) Intellectuality Preservation (hifdzu al-aql); and 5.) Wealth Preservation (hifdzu al-maal). These five basic aspects should be the ultimate goals of development from an Islamic perspective (Aydin, 2017;Herianingrum et al., 2019;Rama & Yusuf, 2019).
In 2019, Rama and Yusuf (2019) estimated the human-Islamic development index number for each province of Indonesia. However, from this study, it is known that the average IHDI in Indonesia is only 47,33. Suppose we use the minimum criteria for the human development index made by UNDP. In that case, none of the provinces in Indonesia achieves the moderate criteria because the highest limit for the low criteria is 60,00, and none of the provinces in Indonesia achieves more than 60,00. The following is the complete list of IHDI in Indonesia calculated by Rama and Yusuf (2019):

RESEARCH METHOD
This quantitative study aims to measure the IHDI of 34 provinces in Indonesia and also to analyze the effect of domestic investment, foreign direct index, life preservation index, heredity preservation index, intellectuality preservation index, and wealth preservation index. These five indices consist of two to three variables representative of the index (Anto, 2011;Rama & Yusuf, 2019), the formula of IHDI is as follow: Meanwhile, to analyze the effect of domestic investment, foreign direct investment, and government expenditure on IHDI, we use panel data regression analysis. The formula is: Three models can be formed from panel data analysis: the common effect model, the random effect model, and the fixed effect model (Firman, 2016).
Therefore, to determine which model is the best, three tests need to be carried out, namely: the Lagrange Multiplier (LM) Test (to determine between the common effect model and the random effect model), the Hausman Test (to determine between the random effect model and the fixed effect model), and the Chow Test (to choose between fixed effect model and common effect model).

Measuring Indonesian IHDI
The Islamic human development index calculation results from 34 provinces in Indonesia can be seen in the following table: Meanwhile, the provinces with the lowest IHDI scores are North Sumatra Province, East Java Province, and Papua Province.
Yogyakarta is the province with the best IHDI scores. Viewed from each IHDI indicator, Yogyakarta has the highest science index value compared to other provinces, while the religion and life index values are also higher than some other provinces. Yogyakarta is known as "Kota pelajar" because of its learning culture, excellent schools, and universities as knowledge centers. This educational aspect quality also impacts the conduciveness for other aspects such as religion and health. In addition, from the welfare point of view, although Yogyakarta is known as a tourism and cultural center, the wealth index value of Yogyakarta Province is relatively low compared to other provinces.
Meanwhile, North Sumatra Province has the lowest average IHDI score, with 49,22. The Religion Index of North Sumatra Province is the most minor compared to other provinces. North Sumatra's heredity index is also in a reasonably low rank. This condition can be used as an evaluation material for policymakers, especially in North Sumatra Province, so that in the future, they can make improvements for their region. DKI Jakarta Province, the nation's capital, is consistently among the top five provinces with the highest IHDI.
However, regarding average IHDI values from 2015 to 2019, DKI Jakarta occupies fifth place under Riau Islands Province. In several aspects, such as the life index, intellectuality index, and wealth index, the DKI Jakarta Province scored above 70,00.

Effect of Investment and Government Expenditure on IHDI in Indonesia
Before analyzing the data, a correlation test is needed on the exogenous variables observed in the model. This correlation analysis aims to ensure the independence degree of the exogenous variables. Here are the results of the correlation test:   (Basuki, 2017;Sihabudin et al., 2021). This value was found to be higher than the dL value (1,6992), higher than the dU value (1,7966), did not exceed the 4-dU value (2,2034), and did not exceed the 4-dL value (2,3008).
The results in table 5 show that domestic investment (DOMINV) positively affects the Islamic human development index in Indonesia. The circulation of capital flows in the country can boost the Islamic human development index. As previously explained, investment brings funds into the business and other resources that can increase business capacities, such as innovation, technology, research, and development. This increase in business capacities will have many impacts on the workforce, such as increasing worker income and employment opportunities to increase the welfare of the wider community. Profits from domestic investment also revolve around the country, so investment profits are also beneficial for the national economy Muhammad et al., 2010;Shahbaz et al., 2016).
Then, the foreign direct investment variable (FORINV) does not seem to affect Indonesia's Islamic human development index, as indicated by the  Muhammad et al. (2010) and Reiter & Steensma (2010), who found that foreign direct investment positively impacts human development.
As the policymaker, the government must increase the circulation of domestic investment rather than foreign investment in the future. Based on the results of this study, we can see that domestic investment has more impact on human development than foreign investment. In addition, the form of investment must also be considered in detail, whether it is an Islamic investment or an investment that is contrary to Islamic law. Because as a country with a Muslim majority, Indonesia should be able to develop the sharia investment climate both at the regional and national level, for example, specialize in sharia investment schemes such as sukuk and musharaka for development projects in the regions as well as eliminating investment practices that contain maisir, gharar, tadlis, and riba (Budiyanti et al., 2021).

CONCLUSION
This study produced two important findings: the measurement of the indicators. An example is the indicator of religion preservation (hifdzu ad-dien), which really needs an illustration of the people's level of worship and adherence to Islamic law. Due to this kind of limited data, data that are close to relevant are used, such as the level of crime and drug cases (Anto, 2011;Rama & Yusuf, 2019).
Therefore, the authors recommend for further research to develop indicators in calculating the IHDI to be more comprehensive. Then it is also necessary to examine the difference in the impact between Islamic investment and conventional investment on IHDI so that the framework for the role of investment in human development can be more detailed.