LIVING with SARS-CoV-2 has brought about enduring changes in our lifestyles.
The pandemic has particularly compelled many people to adopt and sustain a healthier lifestyle which reinforces the core Islamic principle of halal.
Halal is foundational to a healthy lifestyle. Malaysia's halal certification is internationally recognised as the gold standard.
It affirms a product's halal credentials and provides comfort to consumers on adherence to that which is permissible. The certification covers traceability across the manufacturing process chain from raw materials to the finished product.
The halal industry holds great potential in driving growth. Halal products and services encompass a wide range of industries such as food and beverage, pharmaceuticals and health supplements, cosmetics, toiletries and personal care, textiles and apparel, finance, hospitality and tourism which have strong linkages between producers and end users.
Accordingly, the prospects for expanding domestic and international market for halal business are significant. To succeed we must do two things.
We must first create a higher awareness of adopting halal as the foundation of healthy lifestyles. The second is to leverage the 4th Industrial Master Plan (4IMP) — 2021-2030 — and National Fourth Industrial Revolution (4IR) Policy.
The acceleration of technological change, especially in digital technology, has made our personal and work life increasingly connected.
Hence, digital or smart media can help to strengthen awareness within and beyond national borders of halal as foundational to healthy lifestyles.
Before explaining the role of the 4IMP, let us examine the 3IMP (2006-2020). The 3IMP categorically underlined raising the competitiveness of Malaysia's halal industry.
A number of strategic thrusts are articulated, one of which is to manage regional competition capitalising on our standards and a well-developed manufacturing infrastructure.
In this regard, there are two specific measures. One is to encourage Malaysian halal food and non-food companies which have acquired marketing capabilities, to expand their operations in identified markets.
Another is to support Malaysian companies in creating recognised and reputable Malaysian halal brands in overseas markets through strategic partnerships, mergers and acquisitions.
The halal industry development is given prominence by way of a dedicated chapter in the 3IMP.
This indisputably affirms the significance of the halal industry in contributing to the nation's economic growth on the one hand, and the distinctive advantage of Malaysia's halal certifications on the other.
Leveraging 3IMP's achievements, the 4IMP can give added emphasis on soliciting inbound foreign investments as an intrinsic part of intensifying the halal industry.
In this regard, the inherent advantage of our gold standard halal certificate and mature manufacturing infrastructure will continue to lend appeal.
This emphasis will also serve to align the 4IMP with the aspiration to internationalise Malaysia's halal ecosystem expressed in Halal Development Corporation Berhad's (HDC) Halal Industry Master Plan 2030.
Many multinational companies (MNCs), especially those in food and beverage manufacturing, recognise this advantage and have established facilities to manufacture halal products to meet our domestic demand and for their international markets.
The depth in other core areas like an educated workforce and fiscal incentives also strongly reinforces our advantage.
MNCs with reputable global and regional brands that are manufacturing halal products in Malaysia include Ajinomoto, Kellogg, Coca Cola, Kewpie, Nestlé, Hershey's and Charoen Pokphand.
These MNCs leverage our country as their halal manufacturing hub. Their success attests to the call for giving added focus in the 4IMP to incentivise more foreign investments into Malaysia's halal sector.
Halal products are not confined to food and beverage although they are surely of immediate importance; especially with growing consumer sophistication and activism the shift in demand for halal products has widened with cosmetics and personal care products gaining increased prominence.
Fortune Business Insights estimates the global market size of halal cosmetics in 2020 is at US$21.2 billion. This sector will grow to US$77.3 billion by 2028. Our strength — halal certification, hard and soft infrastructures — positions us well to claim a big slice of the pie.
There are three more aspects we must not ignore. Firstly, 4IMP needs to incentivise foreign investors in halal industry not only to produce for our domestic market, but also to export those products to international market.
Secondly, our country must support MNCs in the halal industry to catalyse continuous development and growth in local small- and medium-sized enterprises (SMEs). Local SMEs can form an integral part of the MNCs' supply chains.
The ensuing collaboration facilitates transfer of world-class knowledge and technology creating a platform for the SMEs to reach, develop and attain world-class standards.
Thirdly there is a large and growing addressable global halal market — estimated by HDC to be US$5 trillion in 2030 — indicative of the vast opportunities available.
The 4IMP can and should further strengthen the foundation to firmly make Malaysia the world's halal industry hub.
Ng Wai Heng is a certified public accountant and former managing partner, global business services, IBM Malaysia. Lau Sim Yee is a professor at Reitaku University, Tokyo, and has been teaching Southeast Asia studies, international economics, integration, development economics and Asian economy since 1983