In 1945, a general assembly meeting of the Masjoemi (Majelis Sjoero Moeslimin Indonesia ) was held. The meeting was attended by some of the leading political figures of the day including Dr. Muhammad Hatta (the first Vice President of Indonesia), Mohammad Natsir, Mohammad Roem, and Wachid Hasyim. One of the decisions of this meeting was the establishment of Sekolah Tinggi Islam ( STI-Islamic Higher School ) by those leading figures, who became the institution's founders. STI began operating on July 28, 1945 and developed into a university called Universitas Islam Indonesia (UII) on November 3, 1947 to respond to the growing demand for a higher education that integrates general knowledge with spiritual teachings.
Initially, UII had four faculties: the Faculty of Religion, Faculty of Law, Faculty of Education, and Faculty of Economics, which began operations in June 1948. About seven months later, UII was forced to close due to the Dutch military invasion. Many students and staff members joined the Indonesian military force to repel the Dutch invasion. In the early 1950s, shortly after the war, UII had to move its classes from place to place around the city of Yogyakarta , even using part of the Sultan's Palace and some of the faculty members' houses as classrooms.
UII saw much improvement between 1961 ¿ 1970 under the leadership of Prof. Mr. R.H.A. Kasmat Bahuwinangun (1960-1963) and Prof. Dr. Dr. Sardjito (1964-1970). During his term in office, Prof. Mr. R.H.A. Kasmat Bahuwinangun helped develop UII's Faculty of Islamic Studies and Faculty of Tarbiyah as well as expanding to Purwokerto to establish the Faculty of Law and Syari'ah.
From 1964 to 1970, under the leadership of Dr. Sardjito (a leading medical doctor in Indonesia ), UII expanded to encompass 22 faculties, five were located in Yogyakarta and the rest were scattered in three provinces: Central Java (Solo, Klaten, and Purwokerto); and West and North Sulawesi (Gorontalo). The areas of study offered were Economics, Law, Islamic Law (Syari'ah), Islamic Education (Tarbiyah), Engineering, Medicine, Veterinary Medicine, and Pharmacy. However, when government regulations prevented UII from maintaining educational activities outside Yogyakarta , UII had to close its branch campuses. Some of them became associated with local institutions, including the Faculty of Medicine, which was closed in 1975.
In the early 1970s to 1982, UII saw extensive physical development of its offices and faculty buildings, beginning with the current central office on busy Cik di Tiro Street . This construction was then followed by the development of three other campuses located throughout the city. During this period, several of UII's faculties started to acquire the accreditation status and also initiated collaboration with both national and international entities, including Gadjah Mada University , King Abdul Azis University of Saudi Arabia, and The Asia Foundation.
Since the beginning of the 1990s until recently, UII has been developing the integrated campus located in Sleman regency, in the northern part of the province of Yogyakarta . Most of UII's faculties and buildings will eventually be located on these 25 hectares of land. As of the first quarter in 2007, UII has 8 faculties with a wide range of programs to offer from diploma programs to doctorate programs to profession training programs as well as a system of supporting institutions.
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