Jeddah (UNA-OIC) – The 2022 Annual OIC Halal Economy Report identified that the OIC member states recorded a trade deficit of US$63 billion for halal economy products in 2021, covering food, fashion, pharmaceuticals and cosmetics, with exports equaling US$275 billion and imports totaling US$338 billion. Only 18% of these imports were sourced intra-OIC, while only three OIC countries (Türkiye, Indonesia, and Malaysia) made it to the top 20 exporters of halal economy products.
The report, commissioned by the Islamic Centre for Development of Trade (ICDT) and produced by DinarStandard, a US-based research and advisory firm, was launched in Istanbul on November 29th, 2022 at an event attended by ministers of OIC member countries, and representatives from OIC organs.
“For close to four decades, ICDT has strived to facilitate trade and investments across OIC countries by promoting halal economy products and services, developing partnerships and strategic alliances between stakeholders of member states, helping disseminate information on intra-OIC supply and demand and fostering best practices. With this report, we aim to inspire and empower OIC countries to act cohesively, promote inclusive growth and increase the OIC’s share in the halal trade and investments ecosystem with integrity and purpose”, said HE Latifa El Bouabdellaoui, Director General, ICDT.
While OIC countries were import reliant for the food, pharmaceuticals and cosmetics sectors, they were net exporters of apparel and footwear products, having exported products worth US$101.94 billion in 2021, while imports equaled US$34.96 billion, resulting in a positive trade balance of US$66.98 billion.
Meanwhile, in terms of investments, OIC Member States received a total of 180 investments across the eight sectors of the halal economy, with 120 disclosed deals worth US$7.9 billion in 2021.
Driving OIC member countries opportunity in halal trade and investments is its halal lifestyle consumer demand ($1.7 trillion in 2021) representing 79% of the global spend ($2.1 trillion). Specifically, Muslim spend on food by consumers in OIC countries was valued at US$1.07 trillion in 2021, forecasted to reach US$1.5 trillion by 2026. This presents a strong window of opportunity for OIC countries to ramp up production, leverage growing consumer demand for healthy and organic food products, and adopt digitalization across the industry.
Islamic finance assets in OIC countries were worth US$3.32 trillion in 2020 and are forecasted to reach US$4.82 trillion by 2025, at a CAGR of 7.8%. In 2021, deals in finance constituted 23% of all transactions in OIC countries.
OIC member countries made up six of the top 10 global markets for Muslim consumer spend on media and recreation in 2021. Muslim consumers from OIC Member Countries spent an estimated US$141 billion on media and recreation in 2021, forecasted to reach US$231 billion by 2026.
Meanwhile, Travel was one of the sectors most affected by the COVID-19 pandemic. Muslim travelers from OIC countries spent a total of US$86 billion in 2021, forecasted to reach US$211 billion by 2026.
Islamic higher education is essential to educate industry and halal supply chain players Muslim consumers from OIC countries spent US$15 billion on tertiary education in 2021, with the top three markets being Saudi Arabia, Türkiye, and Indonesia. This spend is forecasted to reach US$19 billion by 2026.
The report incorporates an OIC Halal Economy Trade and Investment Index that ranks OIC member countries’ global and intra-OIC trading activity in halal-related sectors, as well as the country’s attractiveness to investors. The index comprises of 61 metrics organized into five components for each of the eight sectors of the Islamic economy: Islamic finance, halal food, Muslim-friendly travel, modest fashion, media/recreation, halal pharmaceuticals, halal cosmetics, and tertiary education. The top five ranked countries in the index are: Malaysia, the UAE, Saudi Arabia, Türkiye, and Bahrain.
Rafi-uddin Shikoh, Managing Partner of DinarStandard, said: “The 2022 Annual OIC Halal Economy Report identifies 20 actionable strategies for OIC organs and member states to explore and implement, grouped into five strategic categories. These categories are national economic resilience building, intra-OIC/south-south cooperation, halal economy promotion and awareness, and investment attraction and facilitation”.
The actionable strategies for national economic resilience building, include localizing halal production and launching accelerator programs; intra-OIC/south-south cooperation entails establishing economic partnerships and facilitating halal certifications; research and innovation focuses on emerging technologies and capacity building; halal economy promotion and awareness, includes supporting SMEs and conducting trade shows; and investment attraction and facilitation comprises establishing investment promotion agencies and stakeholder collaboration. Additionally, sector-specific strategic and tactical recommendations for industry stakeholders and investors have been detailed within each chapter within the report.
It is noteworthy that the ICDT, established in Casablanca in 1984, is the Subsidiary Organ of the OIC entrusted with the mission of promoting Trade & Investments in OIC. For close to four decades, the Islamic Centre for Development of Trade (ICDT) has strived to facilitate trade and investments across OIC countries by promoting halal economy products and services, developing partnerships and strategic alliances between stakeholders of member states, helping disseminate information on intra-OIC supply and demand and fostering best practices. In addition to organizing seminars, forums, and conferences, ICDT follows up the trade negotiations on the Trade Preferential System among the OIC Member States (TPS-OIC) as well as the trade negotiations in the framework of the World Trade Organization (WTO). Furthermore, it conducts sector-based studies with the major aim of boosting trade among the OIC Member States.