Halal Industry in ASEAN: Issues and Challenges

Halal Industry in ASEAN: Issues and Challenges

Moha Asri Abdullah (International Islamic University Malaysia, Malaysia) and Md Siddique E Azam (International Islamic University Malaysia, Malaysia)
DOI: 10.4018/978-1-7998-2257-8.ch005

Abstract

Amongst three Muslim majority countries (Indonesia, Malaysia, and Brunei) of ASEAN, Malaysia leads the halal industry globally and considered to be the global halal hub. Simultaneously, the market is growing tremendously in other member countries as well. It has been realized that a number of driving forces are responsible for boosting the expansion of Halal industry globally as well as in ASEAN. While there are a number of factors accelerating the growth of the Halal industry, there are many limitations and challenges that are hindering the market expansion. Therefore, this chapter introduces the overview of Halal industry globally as well as in ASEAN counties. The chapter explores the opportunities of the Halal industry for ASEAN counties followed by identifying the issues and challenges confronted by industry players. Finally, it concludes by providing some recommendations in the ASEAN context based on the current global situation and findings of the Halal industry. The chapter adopts methodology of analyzing secondary data.
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Global Halal Industry

The term ‘halal’ comes from the Arabic word namely halla, yahillu, hillan, wahalalan which means allowed or permissible by the Shariah law. According to Sharia’h law, every Muslim must ensure whatever they consume comes from a halal source. This confirmation shouldn’t be limited to only ingredients but also the whole process of production and services (Zakaria, 2008). The study by Malboobi and Malboobi 2012 defines halal as lawful, beneficial, and not a serious threat or harm to human. The definition given by Jabatan Kemajuan Islam Malaysia (JAKIM), in Trade Description Order 2011, covers products and services encompassing all the business operations like packaging, marketing, manufacturing, logistic, supply, maintain premises, slaughtering and so on (JAKIM, 2015).

Key Terms in this Chapter

Halal Park: HALAL PARK is a community or network of manufacturing and service industries located on a common territory with the objective of preserving the integrity of halal products and services and improving the economic performance of the participating companies.

Millennials: It is a phrase also know as Generation-Y which is used to indicate the people who reached their adulthood in the early 21 st century. This term, according to the U.S. Census Bureau, involves the generation of people born in between 1980-2000.

Key-Industry Players: Brands or countries that are leading globally for different halal products and services.

GDP (PPP): Gross Domestic Product (GDP) by Purchasing Power Parity (PPP) is one of the economic tools to measure the potential strength of an economy.

Global Halal Industry: An industry in the global economy that is comprised of Halal food, Halal cosmetics, Halal pharmaceuticals, Muslim friendly tourism, Halal logistics and supply chain, Modest fashion, Halal media and recreation, and other markets targeting to fulfill the needs of Muslim consumers globally.

Driving Forces: Factors that drive or enhances the growth of the Halal industry globally.

Halal Ecosystem: The entire atmosphere of Halal industry that comprises of production (food, pharmaceuticals, cosmetics, ingredients etc.), services (logistics and supply chain, tourism, banking and takaful etc.), governmental support, and human capital (halal auditors & executives, academicians, halal knowledge workers, syllabus in universities and colleges).

GIEI Score: The Global Islamic Economy Indicator (GIEI) score is a composite weighted file contained six area level pointers crosswise over 73 center nations to demonstrate the present territory of Islamic Economy markers over every one of the Islamic Economy pillars.

Halal Supply Chain: The type of supply chain in the production and manufacturing industry that preserves the halal integrity from farm to table.

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