Malaysia External Trade Development Corporation (MATRADE) is taking the halal agenda globally during the Expo 2020 Dubai by focusing on bringing together businesses to capture business-to-business (B2B) opportunities, as well as seeking government-to-government (G2G) cooperation.
Khaleej Times spoke to Madam Sharimahton, Deputy Chief Executive Officer (CEO) of MATRADE, regarding the strengthening of bilateral trade ties between Malaysia and the UAE, the Southeast Asian nation’s largest trading partner in the Middle East.
Edited excerpts from the interview:
The UAE-Malaysia bilateral trade has grown by 21 per cent to $6 billion (Dh22.04 billion). What are the sectors that have seen robust growth, despite the raging Covid-19 pandemic?
The UAE’s fast recovery from Covid-19 pandemic, opening of the international borders to traffic are a few reasons for the uptake in exports. The growth is also driven by increased demand in palm oil, food stuff and Halal products. Covid-19 has taught people to keep themselves clean – with new health, safety and social distancing protocol. Halal products gained more prominence during this period.
We view the UAE as a very important economic gateway for Malaysian products. It is our largest trading partner in the Middle East.
Malaysian food products are well accepted in the region due to halal factor and their high quality.
However other sectors have also seen huge growth since January. Palm oil, electrical and electronic products, rubber products, gold jewellery are some of the sectors that have recorded high growth during the first nine months of this year.
Over the past few years, the UAE has been positioning itself as the centre of the global halal food industry, taking advantage of its strategic location, while also taking a leadership role in defining international quality standards and processes for this growing sector. The UAE leadership has the vision to position Dubai as the capital of Islamic economy in the region. We see that there are lots of rooms for cooperation between Malaysia and the UAE in this sector which would benefit the development of the global Islamic economy.
Malaysia’s exports to the world increased by 25 per cent to $216.9 billion (Dh796.67 billion) between January and September this year. This is a clear indication that the global market is steadily recovering from the impacts of Covid-19. During the same period exports to the West Asia region have recorded an increase of 42.6 per cent to $27.6 billion (Dh101.37 billion).
Could you tell us a bit how the halal sector is contributing to Malaysia’s economy and external trade?
The world has recognised the halal industry as the new engine of economic growth. It can be seen from the increase of halal products in many countries which is not limited only to Muslim majority countries. Indeed, halal is not perceived as a mere label by its user. The use of the halal label identifies certain products have good standards and quality.
Malaysia’s halal exports reached RM40 billion (Dh35.03 billion) in 2020, despite Covid-19 pandemic. Global halal market is worth $3 trillion (Dh11.02 trillion) and it is growing due to the increasing buying power of the Muslim population in the world. We want to increase the production and exports of our halal products.
Currently, we are seeing a growing acceptance of halal products among the non-Muslim population across the world. They see Halal as a very good value proposition. Covid-19 has increased the awareness on health, safety, hygiene, cleanliness, quality and maintaining social distance. Halal products ensure the first five factors – quality, health, safety, hygiene and cleanliness. More than religion, the non-Muslim consumers see Halal products from quality, health, safety, hygiene and cleanliness point of view.
Now, halal products are not only limited to food stuff. We have halal personal care, halal content, halal tourism – among many other products. Malaysia is producing halal cartoons for children, that teaches moral values, ethics and helps re-shape their thought process in early childhood – that is liked by non-Muslims who find it interesting for their children. These materials are being exported to even non-Muslim countries.
Halal sector currently contributes to around 15 per cent Malaysia’s GDP according to Halal Development Corporation (HDC) of Malaysia. Food and beverage contribute to around 85 per cent of Malaysia’s halal exports. Halal cosmetics and personal care, industrial chemicals and halal pharmaceuticals made up a combined 13.1 per cent of the country’s total halal exports in the first quarter of this year.
The Malaysian government has set tax incentives to promote the attractiveness of halal sector specially for certain products, such as livestock and meat production, probiotics, processed food, pharmaceuticals and nutraceuticals, cosmetics and personal care, and halal ingredients. UAE companies should look into investment opportunities in Malaysia to extend their reach to the Far East market.
How did the UAE become the biggest trading partner of Malaysia in the Middle East and West Asia?
The UAE has always been the largest export market for Malaysian products among the West region. By 2022, it is estimated that the global halal market will be worth $2.6 trillion (Dh9.55 trillion), with $4.9 billion (Dh18 billion)of that being imported by the UAE. At present, Malaysia’s exports of meat-based halal products to the UAE are valued at $22.6 million (Dh83.01 million) only which shows that there is much room for growth. The halal economy started moving into a positive direction with the global economy slowly picking up and very soon reaching to pre-pandemic level. As part of MATRADE’s services to boost the economy, Malaysian halal delegation is looking to forge lasting partnership at the Expo 2020 Dubai.
Sultan Abdullah Sultan Ahmad Shah had said last year that Malaysia can be a gateway to Southeast Asian markets for the UAE. How is that goal being achieved?
During the Covid-19 pandemic, we did not stop production as our factories continued to run maintaining health, safety and social distancing. We have undertaken a number of initiatives including running trade missions for Malaysian exporters to develop their market in the UAE and GCC. We continue to do so. At the Malaysian Pavilion at the Expo 2020 Dubai, we are bringing trade delegations who meet their local buyers to increase exports and meet new trade partners – so that both the buyers and sellers can benefit from increased market penetration.
What are the sectors that Malaysia is seeking investments from UAE-based companies?
Malaysia provides very good opportunities to the UAE investors with high return on their investments. We have a good domestic and export market, good infrastructure, educated, skilled human resources base that the UAE investors can benefit from.
The UAE investors can benefit by investing in all the growth industries, including electronics, food stuff, industries, Halal products, personal care products, retail sector, among others. UAE’s Lulu Group International is doing very well in Malaysia’s retail sector with their hypermarkets and supermarkets.
How can the promotion of tourism deepen bilateral trade?
Both Malaysia and the UAE are two large tourism markets. Lots of people from the UAE – both Emiratis and residents – visit Malaysia regularly for leisure and business tourism. A large number of Malaysian people visit the UAE where new tourism facilities have been developed in recent years. Among these tourists, lots of businessmen are finding new avenues to expand their businesses as they explore new opportunities during their visit. This way, a tourist later becomes a business partner of a local company. So, yes tourism is a major area that could further deepen bilateral trade.
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