At the
Global Islamic Economy Summit (GIES) 2016 event, held 11 to 12 October in the UAE, HE Abdulla Mohammad Al Awar, CEO of the Dubai Islamic
Economy Development Center (DIEDC), touched on opportunities in the Islamic economy.
“The Muslim world has the youngest population
on the planet. Our youth are gifted and tech-savvy. They are an
important class of consumers and they are also seeking the best services
and products.
“Islamic
economies can pioneer innovative concepts in the industries that are
native to them, such as the massive halal sector and shari'ah-compliant
finance and investments,” he said.
With a prospective customer base of approximately 1.6 billion Muslims
worldwide, and US$1.1 trillion currently spent every year on halal
products, the halal industry certainly has a great deal of potential.
Mohammed Badri, MD, International Halal
Accreditation Forum – UAE, said, “The halal industry has
made vast strides in recent years as consumers become more inquisitive
about where their food is sourced from. Greater coordination and
standardisation globally about what constitutes halal food is a barrier
that can, and needs to be, overcome, in the coming years to ensure that
the sector’s full potential is attained in the Islamic world.”
While a number of non-Muslim countries have
recognised the opportunity and established a robust supply chain
network, Muslim markets remain net importers of halal food. At present,
the Organisation of Islamic Cooperation countries import as much as 50%
of their vegetable products, 32% of processed food, and 18.5% of animal
products.
Rafu-uddin
Shikor, MD, Dinar Standard, UAE, noted: “There is an understanding in many western markets that halal food is
synonymous with healthy food. The industry needs to be ready to
capitalise on this, as it is a positive association for the Islamic
faith. Muslim countries in particular need to try and become better at
producing halal food as there is a huge opportunity on offer which is
currently being seized by countries such as Brazil and Australia.”
UK-based Saqib
Mohammed, CEO, Halal Food Authority, added: “The future
prospects for the halal are extremely bright. The youth of today is
extremely engaged in such matters, and beyond food, there is a whole
industry that can be tapped, such a halal chains of restaurants or
hotels specialising in halal products. Better collaboration and an
international standardisation of halal products will help to catalyse
the sector for future growth.”
Yusuff Ali, founder of Lulu Group International, said acceptance would take time. “When the first Islamic bank was launched, it took a while to
take off. It was difficult to accept at first, but now Muslims and
non-Muslims alike are benefitting from the sector. We are living in the
21st century, we sell halal products regardless of whether the
manufacturing country is Muslim or not, and we encourage all our
customers to buy halal products,” he said.
Sheikh
Muszaphar
Shukor Al Masrie, founder of Aladdin Group, the
first online halal product platform, called for internationally uniform
standards for halal products. "Halal is about
life as a whole, it is about cleanliness and hygiene – not just
slaughtering. This is what we’re trying to educate non-Muslims about,”AL
Masrie explained, “I founded the platform to help entrepreneurs who
have
created halal products to sell their merchandise online. Non-Muslim
countries are actually leading the charge in capitalising on the halal
market. For example, the UK is the leading global hub for Islamic
finance, while Australia is one of the world’s largest exporters of
halal meats.”
Amin Osmancevic, CEO of MyBazzar Global, said there was an overemphasis on Muslim-only products. “Islam is only one aspect of a
large, multifaceted market,” he noted. “By focusing only on halal
markets, we would put ourselves in a box. Let’s produce products that
serve all people. Another thing we should focus on instead is the
risk-sharing paradigm of the Islamic economy. It receives
inappropriately little attention; it is an environment where government,
entrepreneurs, and venture capitalists all share the risks.”
“That
being said,” he continued, “Muslims have the untapped potential of
having 1.7 billion consumers. There’s huge market potential in
e-commerce, where only 1% of commerce in Muslim countries is done online
for the time being. I’m from Sweden; Scandinavia has a very small
population, yet accounts for 3% of the world’s exports. That is because
the authorities focus on supporting entrepreneurs and creating a startup
environment. Events such as the
Global Islamic Economy Summit show how
much the Dubai government is heeding the call and allowing entrepreneurs
to connect with each other and to the public.”
Nurturing a workforce with the right skills will be crucial, not just for the halal economy but across the greater Islamic economy. Al Awar advised
governments of Muslim-majority countries to build more and better
schools and universities that encourage creativity, adjust their
economic environment to create a level playing field for enterprises of
all kinds, and work together in transferring knowledge and expertise.
“To
lead the third industrial revolution, governments in Islamic countries
need to take urgent steps to build a smart workforce where innovation is
the norm. Cross-border collaboration between
our governments and the business sector will place us in a superior
position to emerge as winners. The good news is that together, we
(Islamic economies) can work to participate and even lead the industrial
revolution. Our role is to ensure that technology and innovative
solutions are aligned with the ethics and standards embedded in the
Islamic economy ecosystem.”
“Stakeholders in the
Islamic economy need to capitalise on the rapid Muslim population
growth,” HE Hassan Al Hashemi, VP of International Relations at the Dubai Chamber of Commerce and Industry, said. “Muslim population growth is faster the
global average and the tech-savvy youth make up a large percentage.
Total Muslim consumer spending in 2015 amounted to US$1.9 trillion
according to Thomson Reuters; this figure is estimated to reach US$2.98
trillion by 2021 – this presents many growth opportunities.”
HE Al Hashemi listed the UAE as a prime example of a young country on the fast track to social
and economic development. “The UAE government has shown its commitment
to investing in initiatives that drive the economy forward and foster
innovation. The
UAE Vision 2021, for example, outlines initiatives to
transform the country to a knowledge-based economy, diversified away
from oil.”
Startups are typically focused on knowledge-based economies. In a
panel discussion at
GIES, Dustin Craun, Founder of Salaam Bank, classified Muslim forays
into the tech industry into four categories: the Muslims working within
large international tech companies; tech startups targeting Muslim
consumers but offering regular services, such as Careem and souq.ae;
startups that cater to Muslims and serve particularly Islamic
needs, such as halal restaurant marketplaces and qiblah location; and social
enterprise projects that use aspects of Islamic branding but operate in
non-Muslim countries.
"Muslims represent the largest
growth community in the world, however, if you take the Muslims in the
US and Europe out of the equation, there are only few Muslim unicorns
left. Investors from the region keep looking to Silicon Valley and
Europe for opportunities instead of in the region,” Craun noted.
Craun added that stakeholders in the Islamic economy were losing out to traditional enterprises when it came to youth. “Part of the problem with Islamic banking, for
example, is that it’s focusing on older Muslims when the largest
population segment is the young. Meanwhile, traditional banks are
launching products that cater to the youth such as apps and digital
products,” he explained.
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