KUALA LUMPUR: The strong emphasis of the World Halal Forum (WHF) was on the convergence of the halal goods and services industry and Islamic finance into an integrated halal economy estimated to be worth several trillion US dollars.
The global halal food industry is estimated at US$661bil and growing at a rapid 20% per annum, driven by an increasing population and an under-served market.
Speaking at the launch of the WHF yesterday, former Prime Minister Tun Abdullah Ahmad Badawi said he was optimistic on the prospects of the halal economy and the forum would increase the branding of Malaysia.
“We have a big hub for the halal industry in Malaysia. It is getting bigger and bigger. More people are showing interest in our services and products,” he said.
Jumaatun Azmi, founder and managing director of Kasehdia Sdn Bhd, which organised the WHF, said the halal industry could not be ignored because of the size of the market.
“There are 1.7 billion Muslims in the world, so that is the third largest market after China and India. Islam is also the fastest growing religion by virtue of birth rates,” she said.
“By 2020, we see the halal industry contributing 5% to Malaysia’s gross domestic product, with a huge portion of this coming from the services sector,” he said.
Jamil expected strong growth from non- Muslim countries.
He said the halal industry was no longer confined to the Muslims and industry would grow because there was also more interest from non-Muslims, as halal promoted cleanliness and safety.
He said that most Islamic banks worked in an infrastructure of a conventional bank.
For people who want to participate in Islamic finance, Rafe Haneef said: “How Islamic do you want to be? In Islamic finance for instance, riba (interest) is considered unlawful. Does this mean the prohibition of riba only applies to compound interest and not simple interest? No, because profit is lawful.”
Rafe said interest was meant for loan payment.
“When a borrower seeks more time to repay the money borrowed, the lender is entitled to claim compensation for the loss suffered due to the delay,” he said.
“Over time, the lenders argued that if they can charge double the amount of the original loan as interest for additional time for payment surely there is less harm if the lender is allowed to charge nominal interest say 5%, for the original loan period,” said Rafe.