Finance
@ Halal | September-October . 2022
Islamic finance can drive Malaysia ’ s halal economy
The Islamic finance ecosystem is mature and can support the halal industry to position Malaysia as a global halal economy leader
MALAYSIA ranks among the top halal export countries in the world , and the halal economy is a key growth sector . Deputy Finance
Minister I Datuk Mohd Shahar Abdullah said halal exports rose 19 per cent from RM30.5 billion in 2020 to RM36.3 billion in 2021 , accounting for 2.9 per cent of Malaysia ’ s total exports . The top halal export markets were China , Singapore , the US , Japan , and Indonesia .
Food and Beverage ( F & B ), halal ingredients , cosmetics and personal care , palm oil derivatives , industrial chemicals , and pharmaceuticals were the critical products in 2021 .
“ In terms of investments , our halal parks have attracted a cumulative total of RM16.1 billion since 2011 from foreign and domestic players . A total of 295 companies are operating throughout the 21 halal parks across Malaysia , with 42 companies being multinational corporations ( MNCs ). At the
Mohd Shahar Abdullah Deputy Finance Minister I . same time , the remaining are locally owned corporations ,” he said during the launch of the World Bank report on “ Islamic Finance and the Development of Malaysia ’ s Halal Economy ” on Oct 3 .
“ Under the 12th Malaysia Plan 2021-2025 ( 12MP ), as part of our priority to accelerate the development of strategic and high-impact industries and their contribution to the nation ’ s GDP , the government has outlined a strategy towards fostering the competitiveness of an inclusive halal sector .
“ By 2025 , the export value of halal products is targeted to grow to RM56 billion . The contribution of the halal industry to GDP should hit 8.1 per cent from 7.5 per cent in 2020 .”
Issues and challenges
Collaborative efforts are needed to support the innovation-led growth of Malaysia ’ s halal industry and develop more homegrown halal champions , especially among micro , small and medium enterprises ( MSMEs ).
Top 15 Global Islamic Economy Indicator Score
Abdul Shahar noted that the halal industry faced several issues and challenges , including a lack of innovation and R & D to produce highvalue-added products and services and a lack of dynamism among domestic halal MSMEs to strengthen Malaysian halal brands and boost product visibility .
“ On innovation and R & D , Malaysia ’ s halal industry players come from a wide range of industries such as F & B , chemicals , agriculture , and pharmaceuticals – each industry differs in market trends , market composition , stage of growth and technology adoption .
“ Currently , there are various ongoing initiatives such as the National Fourth Industrial Revolution ( 4IR ) Policy , which is the overarching national policy to drive the nation ’ s 4IR and MyDIGITAL – Malaysia Digital Economy Blueprint that is intended to spur the growth of Malaysia ’ s digital economy .
“ These initiatives can be leveraged to support the strategies and achieve the halal industry targets ,” he added .
He pointed out the pharmaceutical indus-