The list ranks economies worldwide based on the Global Islamic Economy Indicator (GIEI), and in this case identifies the countries with economic ecosystems that show the highest potential in developing their local halal food industry.
The value of the global halal food market in 2018 came in at US$1.37tn, and is estimated to grow at a CAGR of 6.3% to reach US$1.97tn in 2024.
Malaysia came in second on the list with a score of 74.3, maintaining the same position as last year. Australia rose two ranks to hit fourth place (score not revealed) and Pakistan also rose two spots to reach sixth place this year with a score of 55.
According to the report authors, Malaysia shows strong potential for developing its halal food industry due to its ‘world-class regulation, new initiatives to accredit halal certifiers worldwide, and granting the first Islamic fintech crowdfunding license [amongst others]’.
“Trade agreements signed with China and Japan [have] strengthened Malaysia’s role in international halal trade,” they said.
“[The country] has also further strengthened its investment ecosystem through an increased focus on the Digital Islamic Economy in the backdrop of bilateral meetings with China [and] important investments in local halal companies.”
The only other Asian country to make the Top 10 list was Brunei, which fell from seventh to eighth spot this year, scoring 53 points.
Almost all other countries in the list were from the Middle East, such as the United Arab Emirates (first place, 91.5), Oman (seventh place, 54), Turkey (ninth place, 52) and Iran (tenth place, 52). Brazil came in third and Sudan fifth.
That said, this list revealed two interesting absences: Both superpower China, which was identified as a major ‘Islamic economy challenger’ in last year’s listing; and Indonesia, the country with the world’s largest Muslim population.
China was not discussed in detail in this year’s report, other than being mentioned in partnerships or trade with Islamic countries, but Indonesia still managed to score highly in other non-food areas such as finance, travel and fashion.
This was enough to garner it a special mention in the report as a ‘Leading Country’ in terms of Islamic economy.
“Indonesia has [launched] its Halal Economy Masterplan 2019- 2024 through its recently established National Shariah Finance Activity, with the central goal of boosting the role of Islamic finance in driving economic growth,” said the report.
“The Masterplan has underpinned broad, ambitious initiatives, recommending four strategic steps, with the goal of making Indonesia a major producer in the global halal industry by 2024.”
However, no mention was made of the country’s recently-launched new halal certification regulations, which were started with the food and beverage industry first this year and will expand to other areas such as cosmetics and personal care within the next several years.
Halal food as a whole
The report also found that of the top five halal food exporters worldwide, two were from the APAC region, namely Australia (second place, US$2.4bn in exports) and India (fourth place, US$1.7bn in exports).
Analysis of Islamic food spending in the region saw Indonesia came in first despite not making the Top 10 list for halal food, at US$173bn, followed by Pakistan in third place (US$119bn), Bangladesh at fifth place (US$82bn) and India at tenth place (US$41bn).
“The scope and scale of halal certification has continued to grow, attracting more global market leaders in the food and beverage industry from across the value chain [in the APAC region],” said the authors.
“[For example], Cargill has committed to a US$200mn investment in Pakistan to produce a range of products including edible oils, [and] Australia’s leading supermarket chain Woolworths also launched its Al-Sadiq halal brand, available in 20 stores in communities with high Muslim populations.”
It was also highlighted that although several countries had laid out strong plans and strategies to develop local halal economies, what was lacking was still proper implementation and regulatory alignment.
“Several Organisation of Islamic Cooperation (OIC) governments, including the largest ones, Indonesia and Saudi Arabia, are seeking to develop robust halal propositions [and strategies, but these await implementation,” they said.
“Halal regulation remains disparate, with OIC importing countries differing on regulations. Developing regulations across OIC countries continues to affect the industry supply chain dynamic. The Indonesian domestic regulation requirement is one major example.”
