Q.  BRIC vs. MINT - WHERE CAN SHARI'AH FINACING TRULY PROSPER?

Both.  Shari'ah financing can prosper wherever finance is needed.  Some markets will take time to develop the appropriate regulatory infrastructure and political will to embrace Islamic finance and enable a full suite of Islamic finance products.  Given the "shared risk - return" philosophy of Shari'ah finance, limits of political will and regulatory infrastructure only apply to a subset of Islamic finance.  Nigeria, Turkey and Indonesia all offer tremendous opportunity for Islamic finance to prosper across all products and market segments.  They have the political will, are developing the regulatory infrastructure. With exception of retail Islamic finance, the opportunities for corporate, asset management and equity are truly global.  Shari'ah finance can prosper wherever opportunity exists.  What will determine whether it does prosper largely has to do with the leadership and foresight of those who run financial institutions.    When it comes to the question of BRIC versus MINT, it comes down to the ability of financial institutions to capitalize on the opportunities in those markets.  Shari'ah finance will prosper where we have strong leadership and great institutions that can deliver results, regardless of the geography.  

Q. WHAT INFRASTRUCTURE NEEDS TO BE PUT IN PLACE TO PUSH HALAL CONSUMERISM FORWARD?

To be frank, very little needs to be done to push Halal consumerism forward, at least amongst Muslim consumers.  Consumer demand for Halal goods and services is very strong.  The relatively undeveloped global position of Halal goods and services, in our assessment, is not a function of the demand side of the equation but a result of the lack of infrastructure on the supply side of market.  To produce any good or service one needs inputs, a production process to convert those inputs into a finished product, and capital to finance the entire process.  Significant barriers exist across all three of these elements when it comes to the supply side of the Halal industry. This is not a function of a lack of will or desire to deliver Halal goods and services, on the contrary, Halal producers are extremely driven and motivated to deliver the best Halal products to the consumer.  Rather, this is a reflection of the tremendous costs and the lack of adequately developed Halal certification standards, processes, and procedures that make global trade in Halal products unfeasible for small and medium size enterprises.  Until Halal producers reach adequate scale to be able to invest in management systems to enable them to deliver Halal goods and services on a global scale, and until the certification and standards infrastructure develops to support rather than hinder global Halal trade, the supply side of the Halal industry will continue to be highly local in scope and scale, thereby failing to deliver on consumer demand.  

  Q. IN WHAT SECTORS ARE THE HALAL CONSUMERS NOT BEING ADRESSED? 

Given our analysis of the broader infrastructural issues in the Halal industry per above, especially on the supply side, the consumers' needs are still being largely unmet.  One critical failure of the industry in meeting the consumers' needs is on the integrity of certification.  When we support investors or producers in the Halal industry in identifying opportunities for growth and expansion, we assess the certification and regulatory framework.  In order to ensure the Halal integrity of goods and services throughout the supply chain, transparent standards need to be established and the certification process needs to be audit driven.  In addition, the standard setting bodies and the certification bodies need to be independent of each other, and the both need to be independent of the producers.  Until this happens, consumers run the risk of being exposed to Halal goods and services that do not meet the level of Halal integrity they expect in their Halal products.  Demand for Halal goods exists across all segments of the economy.  The supply side infrastructure needs to develop, and the industry needs access to growth capital in order to be able to deliver on this demand.

Kavilash is an international finance and corporate strategy expert whose career is focused on the productive and ethical deployment of investment capital in growth and emerging markets.  He currently serves as Managing Director of Nur Global Strategies, a boutique strategy advisory firm, and as the Principal Financial Group Center for Global Citizenship Global Practitioner-in-Residence in the College of Business and Public Administration at Drake University.  Kavilash earned his BA in Economics, History, and Political Science at Drake University, his Masters in International Affairs from the School of International and Public Affairs at Columbia University in New York, and his MBA from the University Of Chicago Booth School Of Business.   

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