a long time, halal simply meant buying meat from a halal butcher, who
slaughtered in accordance with Islamic principles. But the halal food
market has exploded in the past decade and is now worth an estimated
$632 billion annually, according to the Halal Journal, a Kuala
Lumpur-based magazine. That’s about 16% of the entire global food
industry. Throw in the fast-growing Islam-friendly finance sector and
the myriad other products and services — cosmetics, real estate,
hotels, fashion, insurance — that comply with Islamic law and the
teachings of the Koran, and the sector is worth well over $1 trillion a
year, according a recent report in Time magazine.
Time attributes the rise of the halal economy to the world’s 1.6
billion Muslims, most of whom are younger and, in some places at least,
richer than ever. Seeking to exploit that huge market, non-Muslim
multinationals like Tesco, McDonald’s and Nestlé have expanded their
Muslim-friendly offerings and now control an estimated 90% of the
global halal market.
Beyond halal food, the global economic crisis has brought attention to
Islamic finance as an alternative for both Muslim non-Muslim customers.
In a recent article, the Vatican newspaper Osservatore Romano has
voiced its approval of Islamic finance. The Vatican paper wrote that
banks should look at the rules of Islamic finance to restore confidence
amongst their clients at a time of global economic crisis. “The ethical
principles on which Islamic finance is based may bring banks closer to
their clients and to the true spirit which should mark every financial
service,”? the Osservatore Romano said. “Western banks could use tools
such as the Islamic bonds, known as sukuk, as collateral”?. Sukuk may
be used to fund the “‘car industry or the next Olympic Games in
London,”? the article says.
Investors are attracted by Islamic banking’s more conservative
approach: Islamic law forbids banks from charging interest (though
customers pay fees) and many scholars discourage investment in
excessively leveraged companies. Though it currently accounts for just
1% of the global market, the Islamic finance industry’s value is
growing at around 15% a year, and could reach $4 trillion in five
years, up from $500 billion today, according to a 2008 report from
Moody’s Investors Service.
Pakistan’s Islamic banks plan to expand their network of outlets this
year to take advantage of rising demand for Shariah-compliant financing
according to Pervez Said, director of Islamic banking at the State Bank
of Pakistan. These banks have 500 branches, after adding 210 outlets
last year. Pakistan is promoting growth in Islamic finance to expand
the reach of the banking sector which has less than 25 million deposit
accounts. Shariah-compliant facilities are forecast to rise to 277
billion rupees ($3.5 billion) this year from 185 billion in 2008,
according to central bank data.
French retail giant Carrefour is looking to expand in a number of
Muslim countries, including Pakistan. “We are not interested in what I
call ‘French North Africa’, so in the west we won’t go beyond Libya. To
the east we are looking at markets like Iran and Pakistan. India is too
far away for us.”? François de Montaudouin, chief executive of Majid Al
Futtaim Group, said recently.
Former Nixon adviser and now an American-Muslim commentator, Robert D.
Crane, recently described “the universal principles of what may be
called Islamic economics, not the glitzy stuff of the so-called Islamic
banks but the maqasid al shari’ah or universal and essential purposes
of justice as taught principally in the haqq al mal of classical
Islamic thought, first revived in the modern era by Grand Mufti Ibn
Ashur’s book, Maqasid al Shari’ah, published in 1946 and translated by
the International Institute of Islamic Thought in 2007”. Crane says
that “these provide a new paradigm ready to replace the bankrupt
paradigm of concentrated power that dominates in both socialism and
The dramatic growth of interest in Halal business and finance can be
measured by many international conferences and expos held each year to
bring together various regional and international players. A number of
major events are planned this year in Asia, Middle East and Europe.
It is important for Muslim businessmen and entrepreneurs to seize the
opportunity from the projected phenomenal growth of the halal markets.
There are a whole range of products and services from food and medicine
to finance to travel and entertainment that can come out of the halal
movement. It is clearly a mutli-trillion dollar opportunity during the
next three to five years.