Malaysia leads the world in halal trust, says Fitch unit

KUALA LUMPUR: Malaysia’s institutional credibility remains a key competitive advantage in the global halal sector.

This is underpinned by the internationally recognised halal certification system developed by the Department of Islamic Development Malaysia (Jakim), said BMI, a unit of Fitch Solutions.

BMI said Jakim is widely regarded as a halal benchmark for rigour, consistency and operational maturity.

It added that Malaysia’s influence stems from the perception that its certification system is technically credible, professionally administered and internationally understood.

Malaysia also benefits from a relatively affluent consumer base, with 47.6 per cent of households projected to earn above US$25,000 in 2026.

This compares with 25.9 per cent in Turkiye and 9.6 per cent in Indonesia.

“Additionally, Malaysia has a broader halal ecosystem that extends into Islamic finance, tourism, pharmaceuticals and export-oriented manufacturing,” it said.

Malaysia moved early to formalise halal governance, with state-recognised halal certification introduced at the national level in 1994 under Jakim’s then Food and Islamic Consumer Products Division.

In comparison, other Muslim-majority countries developed their frameworks later or adopted more decentralised approaches.

For example, Indonesia had a long-established halal ecosystem through the Council of Indonesian Ulama.

However, it shifted to a more formal state-led framework under the Halal Product Assurance Agency, established in 2017.

In a fragmented global market, countries and companies often seek widely trusted certification bodies, and Malaysia has made its system commercially valuable beyond its borders.

“Malaysia’s disadvantage is that it lacks the coercive power of a very large domestic market.

“Its certification may be widely respected, but it cannot compel international firms to align in the same way Indonesia can, given its sheer market size.

“Malaysia also operates in a system where even highly regarded certification bodies do not enjoy universal recognition,” it said.

Globally, BMI said the halal economy has expanded from a niche religious compliance issue into a major international trade and regulatory system.

Halal food and drink remain the largest and most developed segment.

Halal food and drink spending is expected to grow from US$1.3 trillion in 2026 to US$1.8 trillion by 2030, representing an annual growth rate of 6.9 per cent.

This growth is driven by strong economic expansion in Muslim-majority markets.

However, because global certification systems remain fragmented across different countries and jurisdictions, international trade remains complex.

This fragmentation raises costs and slows market entry for retailers, manufacturers and exporters alike.

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المصدر: New Straits Times