This study aims to examine the integration of Islamic economic principles and the local wisdom embedded in damar plantation management in Pakel Guci Alit Village, as well as its implications for community welfare and interreligious harmony. Historically, the village's economic life has been closely associated with damar cultivation, which functions not only as the primary source of livelihood but also as a social institution that fosters solidarity, tolerance, and social cohesion. Employing a qualitative phenomenological approach, the study explores the lived experiences, perceptions, and shared meanings of community members through in-depth interviews, participant observation, and document analysis. The findings reveal that Islamic economic principles—including justice, trustworthiness, “shūrā” (consultation), equitable distribution, and the prohibition of exploitation—are deeply embedded in local practices such as mutual cooperation, collective decision-making, and traditional communal rituals. The convergence of these religious and cultural values has fostered a sustainable, equitable, and inclusive system of community-based economic governance. Furthermore, the integration of these values contributes not only to improved economic productivity but also to stronger interreligious harmony, as socio-economic interactions are guided by a shared ethical framework that transcends religious differences. This study proposes a novel conceptual model of community-based economic development that demonstrates how the synergy between Islamic economic values and local wisdom can serve as an effective strategy for promoting sustainable rural development and strengthening social cohesion in multicultural communities
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