Islamic Soft Power: Malaysia Well-Positioned To Consolidate Global Leadership On Halal Branding And Governance – Analysis – Eurasia Review

Report on the Malaysian Halal Industry’s Contribution to Sustainable Development Goals

Executive Summary

The global halal industry has transitioned from a religious compliance framework to a significant driver of economic growth and international diplomacy. This report analyzes the evolution of Malaysia’s halal sector, framing its development, strategies, and challenges within the context of the United Nations Sustainable Development Goals (SDGs). By establishing a comprehensive ecosystem for halal certification and industry development, Malaysia has positioned itself as a global leader, contributing significantly to SDG 8 (Decent Work and Economic Growth), SDG 9 (Industry, Innovation, and Infrastructure), SDG 12 (Responsible Consumption and Production), and SDG 17 (Partnerships for the Goals). The report examines the institutional foundations, current status, and future trajectory of Malaysia’s halal diplomacy, highlighting its potential to advance a global agenda for sustainable and ethical development.

The Halal Industry: A Catalyst for Economic Growth and Industrial Innovation

Driving Economic Prosperity (SDG 8)

The halal industry represents a substantial force for global economic development, aligning directly with the objectives of SDG 8. The market’s growth trajectory underscores its economic impact:

• The global halal food market was valued at US$1,978 billion in 2021.
• Projections estimate the market will reach US$3,907.7 billion by 2027.
• Malaysia’s halal exports reached RM55 billion in 2023, with a strategic target of RM75 billion by 2030.

This economic activity not only boosts national income but also creates employment opportunities across a diversified range of sectors, including food and beverages, pharmaceuticals, cosmetics, logistics, and tourism, thereby promoting sustained and inclusive economic growth.

Building Resilient Infrastructure and Fostering Innovation (SDG 9)

Malaysia’s leadership in the halal sector is built upon a robust institutional framework that fosters industrial development and innovation, a core component of SDG 9. Key initiatives and institutions include:

1. Department of Islamic Development Malaysia (JAKIM): Established in 1997, JAKIM institutionalized halal certification, transforming it into a bureaucratized and internationally recognized system. Its certification is now accepted in 47 countries, serving as a global benchmark.
2. Halal Industry Development Corporation (HDC): Founded in 2006, the HDC was created to coordinate and promote the halal industry as a key pillar of national economic growth, professionalizing the supply chain and facilitating international trade diplomacy.
3. Halal Industry Master Plan (HIMP): First launched in 2008 and updated as HIMP 2030, this plan integrates the halal ecosystem into long-term national industrial strategy, ensuring its role as a mainstream driver of innovation and growth.
4. Technological Advancement: The proposed adoption of blockchain technology for certification and traceability offers a solution to fraudulent practices, enhancing transparency and building a resilient, tamper-proof infrastructure for the industry.

Advancing Responsible Consumption and Ethical Standards (SDG 12)

The Principle of Halalan Toyyiban

The core principle of halalan toyyiban (permissible and wholesome) extends beyond religious compliance to encompass quality, safety, and hygiene. This aligns with SDG 12 by promoting sustainable consumption and production patterns. In Malaysia, this is institutionalized through the MS 1500:2009 standard, which integrates Shariah principles with internationally recognized food safety systems. This standard ensures that products are not only permissible but also safe and of high quality for all consumers.

The Emergence of “Ethical Halal”

The future of the halal industry’s contribution to sustainable development lies in the promotion of “ethical halal.” This expanded concept integrates contemporary global concerns into the halal framework, directly supporting the targets of SDG 12. Key dimensions include:

• Environmental Sustainability: Ensuring production processes are environmentally friendly.
• Labor Rights: Upholding fair and ethical treatment of workers throughout the supply chain.
• Animal Welfare: Adhering to humane practices in the treatment of animals.

By championing “ethical halal,” Malaysia can position its halal model as a comprehensive standard for social and environmental responsibility, appealing to a global market of ethically conscious consumers.

Strengthening Global Partnerships for Sustainable Development (SDG 17)

Halal as a Tool for International Diplomacy

Malaysia has effectively utilized its halal ecosystem as an instrument of soft power and diplomacy, fostering international cooperation in line with SDG 17. This strategy is executed through several mechanisms:

1. Mutual Recognition Agreements (MRAs): MRAs extend the credibility of Malaysia’s halal authority internationally, streamlining market access for exporters and fostering economic diplomacy based on shared values and standards.
2. Bilateral and Regional Cooperation: Partnerships with countries like Japan and Senegal demonstrate how halal can serve as a bridge between Muslim and non-Muslim nations, facilitating trade, investment, and cultural exchange. The proposal for an ASEAN Halal Standard further aims to enhance regional coordination and trade efficiency.
3. Global Forums and Dialogues: International events such as the World Halal Forum position Malaysia as a thought leader, enabling the state to shape global norms and build trust-based partnerships with stakeholders worldwide.

Challenges and Strategic Recommendations for the Future

Navigating a Competitive Landscape

Malaysia’s leadership is contested by emerging players like Indonesia, which is leveraging its demographic scale to centralize its halal certification system, and other nations such as Thailand, Saudi Arabia, and the UAE, which are developing their own regulatory frameworks. This fragmentation of global standards presents a challenge to Malaysia’s normative influence.

Recommendations for Sustained Leadership

To maintain its role as a global leader and continue advancing the SDGs, Malaysia should pursue the following strategies:

• Embrace Technological Innovation: Implement blockchain for enhanced traceability and authenticity to combat fraud and build consumer trust, contributing to SDG 9.
• Champion “Ethical Halal”: Actively promote a halal framework that incorporates sustainability, ethical labor, and animal welfare to align with SDG 12 and appeal to a broader global audience.
• Strengthen Regional and International Partnerships: Lead efforts to develop an ASEAN Halal Standard and continue building bilateral ties to foster collaboration and streamline global trade, in support of SDG 17.
• Align with National Development Visions: Integrate the halal industry with the principles of Malaysia Madani, promoting a model based on ethics, justice, and moderation to reinforce its unique value proposition and soft power.

Analysis of Sustainable Development Goals in the Article

1. Which SDGs are addressed or connected to the issues highlighted in the article?

• SDG 8: Decent Work and Economic Growth

  The article extensively discusses the halal industry as a significant driver of economic growth for Malaysia and globally. It highlights the industry’s market value, export figures, and its role in national development plans, all of which are central to SDG 8’s aim to promote sustained, inclusive, and sustainable economic growth.

• SDG 9: Industry, Innovation, and Infrastructure

  The development of a comprehensive “halal ecosystem” that includes sectors like pharmaceuticals, logistics, and cosmetics, supported by institutions such as the Halal Industry Development Corporation (HDC) and the establishment of Halal Industrial Parks, directly relates to building resilient infrastructure, promoting inclusive and sustainable industrialization, and fostering innovation as outlined in SDG 9.

• SDG 12: Responsible Consumption and Production

  The article emphasizes the halalan toyyiban principle, which links halal products to “quality, safety, ethics, and hygiene.” The discussion on expanding the halal concept to include “environmental sustainability, labour rights, and animal welfare” aligns with SDG 12’s goal of ensuring sustainable consumption and production patterns. The certification and labeling systems are tools to inform consumers and promote these patterns.

• SDG 17: Partnerships for the Goals

  The article underscores the importance of international cooperation in the halal industry. It details Malaysia’s use of Mutual Recognition Agreements (MRAs), bilateral partnerships with countries like Japan and Senegal, and the proposal for an ASEAN Halal Standard. These efforts to build global and regional partnerships to achieve common goals are the essence of SDG 17.

2. What specific targets under those SDGs can be identified based on the article’s content?

• Under SDG 8: Decent Work and Economic Growth

  1. Target 8.2: Achieve higher levels of economic productivity through diversification, technological upgrading and innovation. The article shows this through the expansion of the halal industry beyond food and beverages into “pharmaceuticals, cosmetics, logistics, and tourism,” representing economic diversification and innovation.

• Under SDG 9: Industry, Innovation, and Infrastructure

  1. Target 9.2: Promote inclusive and sustainable industrialization. This is demonstrated by Malaysia’s strategic development of the halal industry through national plans like the Halal Industry Master Plan (HIMP 2030) and the creation of Halal Industrial Parks to drive growth.
  2. Target 9.3: Increase the access of small-scale industrial and other enterprises to financial services and their integration into value chains and markets. The article implies this by discussing the professionalization of the “halal supply chain across sectors,” which integrates various enterprises into the global market.

• Under SDG 12: Responsible Consumption and Production

  1. Target 12.1: Implement the 10-Year Framework of Programmes on Sustainable Consumption and Production Patterns. Malaysia’s institutionalization of halal standards like MS 1500:2009, which embeds Shariah compliance with food safety and hygiene, is a form of implementing such a framework.
  2. Target 12.8: By 2030, ensure that people everywhere have the relevant information and awareness for sustainable development. The halal certification and logo system serves as a tool to provide consumers with information about products that meet specific ethical, quality, and safety standards, as described in the article.

• Under SDG 17: Partnerships for the Goals

  1. Target 17.11: Significantly increase the exports of developing countries. The article provides concrete data on Malaysia’s rising halal exports, which reached “RM55 billion in 2023, with a target of reaching RM75 billion by 2030,” directly measuring progress on this target.
  2. Target 17.16: Enhance the Global Partnership for Sustainable Development. The article highlights Malaysia’s use of “Mutual Recognition Agreements (MRAs),” “bilateral partnerships,” and its role in shaping global halal norms as examples of fostering multi-stakeholder partnerships to achieve shared goals.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

• Economic Performance Indicators

  The article provides several quantitative indicators to measure economic growth and trade performance. These include:

  • The global market value of halal food: “US$1,978 billion” in 2021, with a projection of “US$3,907.7 billion by 2027.”
  • Malaysia’s halal export value: “RM55 billion in 2023,” with future targets of “RM75 billion by 2030” and “RM80 billion.”
  • Malaysia’s ranking in the Global Islamic Economic Index: “first position for 11 consecutive years.”

• Partnership and Influence Indicators

  Progress in international cooperation and normative influence can be measured by:

  • The number of countries recognizing Malaysia’s halal certification: “recognised in 47 countries.”
  • The establishment and number of Mutual Recognition Agreements (MRAs) and bilateral partnerships (e.g., with Japan and Senegal).
  • The development and adoption of regional standards, such as the proposed “ASEAN Halal Standard.”

• Industrial and Institutional Development Indicators

  The development of the halal industry’s infrastructure and ecosystem can be tracked through:

  • The establishment of key institutions like the Halal Industry Development Corporation (HDC) and the proposed Malaysian Halal Commission.
  • The implementation of national strategies such as the Halal Industry Master Plan (HIMP 2030).
  • The development of physical infrastructure, including the creation of “Halal Industrial Parks in three states.”

• Standards and Compliance Indicators

  The promotion of responsible production can be measured by:

  • The existence and application of national standards like “MS 1500:2009.”
  • The scope of the halal concept, particularly its proposed expansion to include “environmental sustainability, labour rights, and animal welfare.”

4. Table of SDGs, Targets, and Indicators

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