Fostering a true halal economy: Global Integration and Ethical Practice

(File pix) Sultan Nazrin Muizzuddin Shah delivering his keynote address.

THE following is the keynote address by the Sultan of Perak Sultan Nazrin Muizzuddin Shah at the conference yesterday at Mandarin Oriental, Kuala Lumpur.

BISMILLAHI r-Rahmani r-Rahim. Assalamualaikum Warahmatullahi Wabarakatuh.

It is my great pleasure to be here at such a prestigious international event to discuss crucial questions about the future of the Islamic economy. Embedded within this economy is the concept of halal. As those of you gathered here today will know, halal refers to that which is permissible or lawful according to Islamic law. As such, the concept and practice of halal should be omnipresent in the end-to- end ecosystem of both production and consumption within the Islamic tradition. The halal industry has, therefore, always been of paramount importance to Malaysia as a Muslim-majority country. Indeed, I would like to take this opportunity to encourage the ongoing work of the Halal Industry Development Corporation (or HDC) in Malaysia, which has implemented various initiatives since its foundation in 2006, with the aim not only of furthering the development of the halal industry locally, but also, I hope, of fostering its ecosystem beyond Malaysia.

There are approximately 1.84 billion Muslims in the world today, making up around 24.4 per cent of the world’s population, or just under one quarter of humankind. By 2030, this number is expected to increase to 2.2 billion. It is important to recognise, however, that although Islam is one religion, the Muslim community is not one homogenous group. The worldwide Islamic community is spread over 200 countries, with an estimated one fifth of the world’s Muslim population living in non-Muslim- majority countries. Muslims throughout the globe are citizens of their respective countries, but they also have a sense of belonging to the ummah, the worldwide Muslim community.

The growing Muslim population worldwide translates into a rising international demand for halal products. Halal is now a truly global industry, and this ever-increasing globalisation represents an exciting opportunity for the Islamic economy, to grow more prominent within the world economy as a whole. However, it also presents a number of challenges, to do with international attitudes and rapid technological change; and it entails important responsibilities concerning the ethical governance of the halal industry and its proper regulation worldwide. I will be considering these aspects of the burgeoning global halal industry in my speech today.

These are, indeed, exciting times for the global halal economy. The value of the halal industry is growing at a remarkable rate: from approximately US$2.3 trillion (RM8.89 trillion) in 2012, the halal sector is expected to almost triple, to US$ 6.4 trillion by this year. This is an astonishing growth within a period of just six years, and represents a major success for the global halal industry. In Malaysia, there have been a number of concerted efforts and programmes, most notably, the formulation of the Halal Industry Blueprint for 2008-2020, to propel the international growth of the industry, and to make Malaysia a global leader in innovation and production.

While halal is perhaps most often associated with food and drink, there are in fact a wide range of halal products and services which can be offered, including healthcare and pharmaceuticals, personal care and cosmetics, travel and tourism, and financial services. According to Reuters, by the end of 2018, the halal food industry alone will be worth USS 1.6 trillion, the halal cosmetics industry will be worth USS 39 billion, and the halal pharmaceuticals industry will be worth US$ 97 billion. It is projected that the halal food and drink sector may be worth as much as US$ 2.1 trillion by 2030.

This vast and widespread growth is due to the increasing demand for halal alternatives across a variety of retail sectors, particularly in parts of the world with a rapidly growing Muslim population. The halal market is not only thriving in Muslim-majority countries, but also in major non-Muslim- majority economies, including China, Japan, the US and the UK. In the United Kingdom, for instance, food production companies are increasingly recognising the importance of the Muslim market, with around 20 per cent of sheep meat in England being consumed by the Muslim population. More and more companies are therefore catering to the Muslim market by producing halal food items. Indeed, one of Malaysia’s Department for Halal Industries has been collaborating with local councils in the North East of England to develop a business hub for producing halal meat. This is an excellent example of the way in which building bridges and establishing global links can help to foster the development of the halal industry worldwide.

There is also an increasing international awareness of the importance of halal tourism, with travel agents offering halal holiday packages. Halal tourism is thriving across Europe, to the extent that Spain even hosted the inaugural Halal Tourism Conference in 2014, and will also be hosting the Halal Expo conference, on food, tourism and lifestyle, later this year.

As these facts and figures attest, recent years have witnessed the rapid international growth of the halal industry across a variety of sectors, and this growth is predicted to continue. Countries are increasingly catering to Muslims at home, as well as appealing to Islamic tourists and holiday-makers overseas. There is a growing realisation, it seems, that halal is a way of life, and that businesses need to meet the needs and demands of Muslim consumers. In this way, the halal industry is propelling the growth of the Islamic economy on an international level.

Despite these success stories, however, the industry must address some significant challenges if this encouraging trend is to continue.

First and foremost, we must acknowledge that halal continues to face some opposition in non-Muslim majority countries. While many non-Muslims are also choosing halal products for their business and personal needs, recent years have witnessed the rise of what we might call “halal phobia” in certain countries. In December 2017, for instance, a French supermarket supplying halal products was ordered to close for not selling pork or alcohol. This kind of reactionary behaviour could potentially damage the globalisation of the halal industry.

I spoke several years ago at the Saïd Business School in Oxford University, about the role and importance of branding in relation to halal products. While we should be proud of the proliferation of Islamic brands in global markets, we must also ask ourselves to what extent we want to segment markets along identity and religious lines. Pushing Islamic brands too aggressively may affect the marketability of products in non-Muslim communities, and will almost inevitably invite reactions from other religious groups. There is, it seems, a delicate balancing act to be performed, between ensuring the availability of halal products and services to Muslims worldwide, and encouraging non-Muslims to see halal products as viable options for themselves as well.

Another potential challenge to the internationalisation of the halal industry is the so-called “Fourth Industrial Revolution”, or Industry 4.0. Rapid and unprecedented technological advances are currently transforming economies, jobs, and even civilisation itself. We must recognize that the world is changing. Billions of people are now instantly connected to each other via countless portable machines. Huge increases in processing power and storage capacity mean that data is being collected and harnessed like never before. Along with the incredible benefits of such developments come substantial risks, as evidenced by big data scandals such as the one high-profile case unfolding in the news at the moment.

By NST.

Read more @ https://www.nst.com.my/opinion/columnists/2018/04/353789/fostering-true-halal-economy-global-integration-and-ethical

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