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Islamic Lifestyle
Middle East investors wake up to Georgia to recover from pandemic losses

From student housing and hotels to residential and commercial projects, investors from across the Middle East are pumping millions of dollars into real estate across Georgia.

 

Georgia’s ease of doing business, along with its low costs, high returns, flexible visa rules and scenic landscapes, has caught the eyes of investors looking to recover from pandemic losses.

“In Georgia, you can open a bank account, register a company and rent a house all in one day,” Islam Shalaby, creative director at Tbilisi-based real estate developer Swef Land, told Salaam Gateway.

“Freehold is possible for foreigners except for agricultural land, so you can fully own real estate without having residency, you can run a business, and you will pay taxes just like locals,” he said.

Citizens of 98 countries, including all six Gulf Cooperation Council (GCC) countries, can live, work and study in Georgia without the need for a visa or residence permit.

“Residents of most of those countries can also stay in the country for 90 days. They’ve recently started to become more stringent to control the number of immigrants as Georgia is preparing to apply for European Union (EU) membership in 2024,” said Shalaby.

High returns

Today, three of the largest real estate development companies in Georgia are owned by Egyptians: York Towers, Swef Land, and OTI Real Estate.

All three companies began as intermediaries before venturing into development. Together, they have pulled in millions of dollars in investments from the Middle East and beyond.

“They studied and tested the market and gradually, backed by strong investors, they started investing millions and acquiring land,” said Shalaby.

He said that real estate investors in Georgia get 8% to 12% annual return on investment (ROI).

“Even at the peak of the pandemic, it was the safest and most promising sector, and investments increased,” said Shalaby.

OTI, for instance, entered the student housing market in 2020. Led by CEO Hani Hebashi, who is also the president of the Georgian-Egyptian Business Council, the company’s $160 million project comprises five residential complexes across Batumi and Tbilisi, Georgia’s two largest cities

According to Hebashi, Georgia has around 12,000 foreign students but lacks student accommodation in line with international standards.

He said that student housing is among the top five most attractive sectors for investment worldwide, with an annual ROI of 4.5% to 7%, but in Georgia, OTI is offering up to 10%.

Read: Middle East tourist arrivals in Georgia soar 511% year-on-year

Resilient sector

Georgia’s real estate market was not severely affected by the pandemic. In 2020, for example, Swef Land injected $200 million into Georgia by bringing foreign capital into the country.

Meanwhile, OTI Real Estate has brought $500 million to Georgia since 2018 through more than 500 investors, mostly Arabs. The company recently partnered with Kuwait’s Ayar Real Estate to develop tourism resorts and residential projects.

York Towers also made its biggest investment in 2020, acquiring 2 million square metres of strategic land around the Bazaleti Lake, northwest of the capital.

“To invest in such a huge commercial plot, ready with infrastructure, and bring in Arab investors in the middle of the pandemic is a major achievement,” said Shalaby.

Georgia’s GDP is expected to grow by 8.5% in 2021 after an economic contraction of 6.2% in 2020, according to the Asian Development Bank.

“Very few countries recovered this fast and to higher levels than pre-pandemic. As soon as the country opened, there was a huge pent-up demand for travel; people were rushing to visit,” said Shalaby, who works with multiple companies in Georgia.

“Business owners were eager to make up for financial losses and were looking for good opportunities. So, 2021 was a great year for many people and a fortunate time for business,” he said.

Swef Land is holding its first conference, Invest Hub, on 28 December to promote its latest projects, including the new ‘Hollywood Resort’.

The massive development lies in a green valley between two mountains and is surrounded by 44 cultural and archaeological landmarks. It will have a cinematic theme and the country’s longest zipline.

With the market’s recent performance, institutional investors from the Middle East are waking up to Georgia’s potential. But the trend is not entirely new.

One of the first investments from the region came from the UAE-based Ras Al Khaimah Investment Authority, which acquired Sheraton Grand Tbilisi Metechi Palace in 2007 for $68 million.

A decade later, the UAE’s now-dissolved Dhabi Group invested $130 million in Biltmore Tbilisi Hotel, which occupies a historical building in the ancient city.

Natural landscapes

While the UAE remains the largest government investor in Georgia among Arab countries, Saudi Arabia accounts for the lion’s share of individual investments, according to Shalaby.

“Saudis are investing in private real estate, including land, apartments, and villas – often multiple properties – in both cities and suburbs; the latter has a higher ROI,” he said.

A large part of Swef Land’s work is focused on the suburbs. The company believes these areas will eventually transform into major population centres due to urban expansion, and therefore, their value will increase.

“Swef Land managed to sell seven projects in one year because it focuses on suburbs. It doesn’t make sense to bring a GCC investor and tell him to invest in a building just like the one in Riyadh, for example. They want to see the beauty of Georgia’s nature,” said Shalaby.
 

© SalaamGateway.com 2021 All Rights Reserved

Islamic Lifestyle
Indonesia sends first batch of pilgrims to Saudi Arabia since 2020 border closure

Pilgrimage was approved after Indonesian government took extensive screening measures.

 

Jakarta – The Indonesian government hopes Umrah pilgrimage activity will gradually return to normal following the departure of 419 pilgrims on 8 January. It is the first departure since Saudi Arabia closed its borders to Umrah pilgrims in February 2020, as part of efforts to curb the spread of COVID-19.

The Saudi Arabian government approved the move after Indonesia introduced a new one-gate screening measure, meaning all pilgrims should be quarantined and depart from Soekarno-Hatta airport. It also centralised the process of health screening including PCR test and vaccination status.

"We have to make sure this departure will go well because if we succeed, it can be a benchmark for upcoming Umrah full reopening or even Hajj reopening this year,” Director General of Hajj and Umrah Organisation at the Ministry of Religious Affairs, Hilman Latief told Salaam Gateway.

Tens of thousands of Umrah pilgrim trips have been cancelled across Indonesia since February 2020. In the pre COVID-19 era, Indonesia usually sent around 1 million Umrah pilgrims each year.  

Syam Resfiadi, chairperson of the Indonesia Hajj and Umrah Travel Association (SAPUHI) and the owner of Patuna Travel Agency told Salaam Gateway that he will start offering Umrah packages to customers at the end of this month following the Umrah reopening.

Resfiadi said the one-gate measure is the right move from the government to prevent unscrupulous travel agents from performing fake PCR tests or forging other required documents.

Patuna Travel, which has 5,000 customers, says it hasn’t organised any pilgrimage trips since the Saudi government closed Umrah activity in February 2020 because many of the customers objected to the 13 days quarantine requirement. Some 75% of Patuna’s customers are state employees and government officials, meaning they require extended annual leave to perform Umrah. 

“With the quarantine requirement it takes around 20 days, it’s too long for them,” Resfiadi said.

Following the Umrah reopening, national airline Garuda Indonesia will fly twice per week from Soekarno-Hatta airport to Medina, on Wednesdays and Fridays.

Hajj and Umrah passengers contribute 10% of the airline's total annual revenue.

 

© SalaamGateway.com 2021 All Rights Reserved

Islamic Finance
US Islamic investment platform Wahed rolls out Sharia-compliant ESG-themed fund

US-based Islamic investment platform Wahed has rolled out a new Sharia-compliant ESG themed exchange traded fund (ETF).

 

The Wahed Dow Jones Islamic World ETF (Ticker: UMMA) began trading last Friday on the Nasdaq stock exchange. 

The actively managed fund will benchmark to the Dow Jones Islamic Market International Titans 100 Index, a data-driven index owned and maintained by S&P Dow Jones Indices. The fund is designed to measure the stock performance of the largest global companies – excluding the US – that adhere to Sharia compliance guidelines. 

The new ETF utilises RepRisk, an environmental, social and governance (ESG) data science provider combining machine learning and human intelligence to assess ESG risks. UMMA has an expense ratio of 0.65%

“We’re using RepRisk for daily filtering, screening, and analysis of controversies related to companies within the fund,” said Samim Abedi, chief investment officer at Wahed. “Such analysis includes a range of issues such as economic crime and corruption, fraud, illegal commercial practices, human rights issues, labour disputes, workplace safety, catastrophic accidents and environmental disasters.”

This latest ETF follows Wahed’s first ETF, the Wahed FTSE USA Shariah ETF (Ticker: HLAL), a strictly US equity focused fund which it launched on the Nasdaq in 2019. Wahed says its new ETF would be the first Sharia compliant ESG-focused/theme ETF on Nasdaq.

It joins the growing activity of providers of combining Sharia compliant and ESG principles. Most recently, in November, Saturna Capital, a US-based investment manager partnered with London-based ETF platform HANetf to launch the Saturna Al-Kawthar Global Focused Equity UCITS ETF. The London Stock Exchange, Borsa Italiana and Germany’s XETRA listed actively managed ETF consists of Sharia compliant stocks with positive ESG characteristics, primarily targeting European investors.

Wahed’s ETFs also joins a growing number of Islamic ETFs in the market which include SP Funds, S&P Global REIT Shariah and, depending on the broker access, BlackRock's iShares Islamic ETFs.

The rationale of establishing this new ETF came down to two main reasons, Wahed's Abedi noted.

“Firstly, as we look to provide long-term capital appreciation to investors, we wanted to provide better diversification through international exposure,” he said. “As part of our investment thesis, we see the possibility of international and emerging markets playing catch-up to the US market over the next few years, so we believe it’s an ideal time to add this global exposure.” 

“Secondly, we’re seeing the line between ethical, socially responsible and ESG funds continue to blur,” he said. “Investors are increasingly looking for more personalised investing options that better fit their individual beliefs. By bringing these values-based investment principles together, we believe we’re addressing a clear gap in the market for an international Sharia-compliant fund managed through an ESG investing lens.”

To ensure flows and liquidity, the ETF is listed on the Nasdaq, which will allow American investors to have access to investing in both ETFs through their brokerage or using the Wahed Invest app or platform, Abedi said.

“UMMA is equity-focused, and many of the top holdings are large-cap and well-known companies, so we’re highly liquid,” he said. “Additionally, we have dedicated liquidity providers looking to ensure the fund trades on a relatively tight bid-ask spread, closely tracking the net asset value of the underlying constituents.”

Blake Goud, CEO of the RFI Foundation, a think-tank which seeks to converge various forms of responsible finance including ESG, impact investing and Islamic finance, said it is encouraging to see more funds that combine Sharia compliance and ESG screening. 

“On the ESG front, RFI's research has shown that different ways of using ESG data can interact with Sharia screens in different ways,” he said. “And so, as with all ESG funds but particularly for funds that combine ESG and Sharia screening, it's important to have transparency around ESG policies, both for their screening and active stewardship practices.”

Aside from the ETF, Abedi said that Wahed is working on new products for 2022 across different geographies.

“Wahed has products in the pipeline and will provide more details as we near live dates across various markets,” he said. “For the US market, we’ll be launching an updated version of our app in the coming months, which will bring additional functionality and products.” 

© SalaamGateway.com 2021 All Rights Reserved

Islamic Lifestyle
Middle East tourist arrivals in Georgia soar 511% year-on-year

Georgia’s popularity is soaring as an affordable holiday and second-home destination, buoyed by easy visa requirements for Arab tourists.

 

Georgia has become one of the most popular destinations for holidaymakers and from the Middle East thanks to its scenic landscapes, affordable hotels, and proximity to the region, as well as the increasing availability of halal food and Arabic speaking guides.

In November 2021, Middle East tourist arrivals in Georgia soared 511 percent year-on-year to 103,500, reaching numbers close to pre-pandemic levels, statistics from the Georgian National Tourism Administration (GNTA) show.

The former Soviet state welcomed more than 150,000 travellers from the Middle East in 2019.

“Georgia is a budget tourism destination. You can stay in a hostel, hotel, or a fully furnished apartment for $30 per day, which is very cheap. The food is good quality and cheap, transportation is cheap, and the services are excellent,” said Islam Shalaby, founder and CEO at Yalla Georgia Travel & Tourism, to Salaam Gateway.

Tourists from the region, especially the Gulf Cooperation Council (GCC) countries, are now coming back on repeat visits, and they are spending entire months on the Black Sea, in villages around the green Caucasus mountains, or in the capital Tbilisi, home to the bustling Arab Quarter.

"GCC countries are one of our main strategic target markets. Once (having) travelled to Georgia, travellers from these countries tend to have longer stays, repeat visits as well as higher expenditures,” Medea Janiashvili, acting head of GNTA, said in a statement.

GNTA recently partnered with Wego, an online travel marketplace in the Middle East and North Africa, to promote the recovery of the tourism sector in Georgia.

According to Wego, around 100,000 searches on Georgia were made on the platform in November 2021. Solo travelers accounted for 63% of the searches, couples 22%, and families 15%.

Muslim-friendly tourism

A mountainous country located between Europe and Central Asia, Georgia is predominantly Christian, but it has a sizable Muslim community of more than 400,000, representing around 10% of the population.

A few mosques serve this community and they are mostly in large cities. Halal food, on the other hand, is widely available in Iranian and Turkish restaurants as well as at local eateries.

“In Tbilisi, halal food is everywhere. Even restaurants that are run by Georgians serve halal food, and the locals are friendly with Arabs and very peaceful. We have one mosque, in central Tbilisi, and it holds a Friday prayer every week,” said Taha.

The Jumah Mosque is one of Tbilisi’s most famous landmarks and probably the only one in the world where Sunni and Shiite Muslims pray side by side, according to Shalaby.

Batumi, the second largest city, has a few halal restaurants mostly offering Turkish cuisine, and one mosque. The city is the capital of Adjara, a region which lies on the Black Sea coast, north of Turkey, and where nearly 40% of the population practice Islam.

“Most of Georgia’s food is halal. When you visit any supermarket, you will find halal food and some even carry the halal label in the Georgian language,” said Taha.

Halal food is also available in cities with large Muslim communities, such as Rustavi and Marneuli, close to Azerbaijan, and Pankisi, south of the border with Chechnya.

“In regions along the borders with Muslim countries, you will find big Muslim cities,” said Shalaby, who is also creative director at Swef Land, an Egyptian-owned Tbilisi-based real estate developer.

Outside these cities, in Georgia’s villages, halal food is difficult to find but only because tourism is still new to the country, he said.

A home away from home

Georgia’s religious diversity and tolerance, as evident from the peaceful coexistence of Muslim, Christian and Jewish communities, together with its liberal visa regime, is encouraging visitors from the Middle East to come back and scout for a home away from home and set up businesses.

“When I first arrived here in 2017 as a student, there were very few Arabs. But now there are many Arabs who are studying and running businesses, including expats from Gulf countries,” Mohammad Taha, co-founder of International Business Group (IBG), a Tbilisi-based educational consultancy serving Arab students, told Salaam Gateway. “The number of students we’ve been registering has been doubling every year.”

Universities in Georgia have easier admission requirements compared to their European counterparts, which are harder to get into and where Muslim students may encounter Islamophobia, according to Taha.

“People started to notice Georgia because the prices are low, entry is easy, and the country is peaceful. Women feel safe going out anytime of the day or night,” he said.

While there have been a few Islamophobic incidents in recent years, such as the 2017 rally in Tbilisi, and the 2021 attack on Muslims over a new prayer space in western Georgia, they are few and far between, and the government usually intervenes.

For instance, in a rare case in 2019 when a hotel rejected a Muslim guest, the owner was given a jail sentence, according to Shalaby.

“When your country is wide open to everyone, you get all types of people,” he said, referring to illegal immigrants.

“Georgians felt overwhelmed at first. Arabic was suddenly everywhere on the streets and on shop signs next to Georgian. It could be a personal issue among a few, but it certainly doesn’t exist on a societal or political level,” said Shalaby.

 

© SalaamGateway.com 2021 All Rights Reserved

Halal Industry
Spain aims to support its growing halal tourism and food industry

$6.8 billion was spent in Spain on products associated with a Muslim lifestyle in 2019 while Spanish halal exporters also supplied $4.7 billion worth of halal-certified food, pharmaceuticals and cosmetics products to OIC countries that year.

 

Spain has been expanding its halal tourism and food sales, leveraging its geographical proximity to Muslim countries in North Africa to provide travel and accommodation services.

In the CrescentRating Global Muslim Travel Index 2021, Spain climbed six positions to the 16th in the top non-Organisation of Islamic Cooperation (OIC) destinations. The 2020/21 State of the Global Islamic Economy Report by DinarStandard said that in 2019, 2.77 million Muslim tourists visited the country.

Of course, the COVID-19 pandemic has impacted business, but halal sector experts think Spain is well-positioned to grow its Muslim-oriented tourism and food sales. 

According to Spain’s National Statistics Institute (INE), from January until September 2021, 48,733 Moroccans visited the country, much less than the 128,468 who travelled to Spain in 2020 and the 741,855 counted in 2019. The pandemic also hit the numbers of Turkish visitors: down from 269,557 in 2019 to 62,837 in 2020 and 48,460 from January until September 2021.

Tomás Guerrero, director of the Dubai government’s Halal Trade and Marketing Centre – and a Spaniard himself – is optimistic that these numbers will grow. And alongside them, sales of halal food, cosmetics and even pharmaceuticals in Spain. There are 2.2 million Muslims living in Spain, representing approximately 4% of the population in 2020, according to the Union of Islamic Communities of Spain (UCIDE) and the Andalusian Observatory, with 42% Spanish citizens and 58% immigrants with residence and work permits, especially from Morocco. 

Muslim immigrants from Pakistan, Senegal, Algeria, Nigeria and Bangladesh are also present in significant numbers. Guerrero noted DinarStandard data that $6.8 billion was spent in Spain on products associated with a Muslim lifestyle in 2019, such as halal food, pharmaceuticals, cosmetics, and travel, modest apparel and clothing, as well as Muslim-focused media and recreation.

Spanish halal exporters also supplied $4.7 billion worth of halal-certified food, pharmaceuticals and cosmetics products to OIC countries that year, he said.

The figure could be higher but there is “resistance” from some companies with certified products to sell them domestically with the halal stamp for fear that they will not be bought by non-Muslim consumers and due to controversies with animal welfare activists, explained Muhammad Escudero, director of the certification department at the Halal Institute, the leading halal certification organisation in Spain.

And while he recognised that the pandemic slowed growth in Spain’s halal market, Escudero also believes sales will expand, especially food exports. Some companies are selling new halal products such as nuts, with a halal certificate, to Muslim-majority markets, for instance Spain’s Calconut SL.

Extenda, the trade promotion agency of Andalusia, where much of Spain’s tourism sector is based, replied there is no official data about exports of halal food. That said, the number of restaurants nationwide with at least one dish with certified halal meat grew from 121 in 2011 to 344 this year, levelling off during the pandemic, with 343 in 2020, compared to 340 in 2019. The numbers reflect those registered in halal restaurants and markets guide Zabihah, its founder Shahed Amanullah told Salaam Gateway. 

Amanullah anticipates a return to “robust growth,” adding that Spain is an important market not just because of its attraction to Muslim travellers and its growing population of North African descent, but also because it is ready to be a major supplier of halal meat to the rest of Europe. This is because restrictions on halal meat production, such as increased stunning requirements, have been introduced in some European countries, such as Belgium, and therefore have to import it for their large Muslim populations.

Spain does not face such problems, he said. “Spanish meat-based delicatessen products are world-renowned and halal meat producers in Spain have taken advantage of this to produce halal versions of these products. They are starting to get noticed in markets outside Spain where halal processed meat options do not include traditional European products,” Amanullah said.

The Singapore-based platform eHalal.io, with 230,000 monthly users, had an “increase of 284 percent in website traffic from last year to this year from the Spanish market,” founder Irwan Shah told Salaam Gateway. He added that most Muslim users from Spain “look for global Muslim food brands.” Around 90% of the market in Spain is composed of small retailers that sell other groceries too, and a few supermarket chains that “normally don’t promote” their limited halal products, Shah said.

Looking ahead, Madrid is working to become “one of the European capitals of reference” for emerging Muslim markets, said the director of tourism of Madrid City Council, Héctor Coronel. Madrid’s new Strategic Tourism Plan 2021-2023 “focuses on this market due to its characteristics and its growth potential,” he explained, including plans to promote more transport connectivity between Madrid and Muslim-majority countries by working with tour operators to adjust their services.

Coronel specified Saudi Arabia as “the country with the most potential” for Madrid, due to its large population and “openness to the West,” but the city council is also trying to attract tourists from the UAE, Qatar, Indonesia and Malaysia. Madrid is already promoting its Muslim patrimony, mosques, and halal services.

In the early Middle Ages what is now Spain was part of a group of Muslim states called Al-Andalus - romanticised as a golden age of tolerance and reason. With most or part of the country under Muslim rule from 711 until 1492, Spain can tap cultural dividends from its Islamic past. For instance, the Tourism Institute of Spain promotes several ‘Routes of the Heritage of Al-Andalus’ in the southern region of Andalusia to attract Muslim tourists. Part of the offering is integrating delicatessens, whose products are sold as halal souvenirs.

The Halal Institute is working with hotels and restaurants to help them meet Muslim needs, but just a few hotels have so far become halal certified (in terms of service offerings) and they were not renewed during the pandemic, said Escudero, noting it is “hard” to create “a space or hotel just for one type of clientele”.

To promote a wide range of certification, the Halal Institute is developing a “more flexible” mechanism called the ‘Authorised Halal point of sale’ to promote small companies with non-certified halal products or services or products certified by other companies. This does not necessitate certifying the company itself, which requires more costs and bureaucracy, he told Salaam Gateway.

Guerrero added that Spain can take advantage of the fact that “countries of North Africa and the Middle East import around 60% to 70%” of their food. Those emerging markets, with younger populations, increasing numbers of women working and digital natives make an enticing target for the roughly 1,000 Spanish companies who have halal certification. To him, Spain is an important player in the halal food market because it exports “a broader spectrum” of products over countries that export more in terms of volume, but with less diversity.

 

© SalaamGateway.com 2021 All Rights Reserved

Halal Industry
Halal food industry challenged with fraudulent products and certification disputes 

Following a series of scandals, industry experts call for more regulation and harmonised standardisation as new technologies emerge to combat consumer deception.

 

London – Fraud in the halal food sector is emerging as a widespread problem. A series of scandals have rocked the industry worldwide, shining a light on the difficulty of eliminating non-halal practices from increasingly large and complicated food supply chains.

In Thailand, the Agriculture and Cooperatives Ministry investigated a suspected widespread scam of pork coated in oxblood that was sold off as beef in the halal food markets of Bangkok in the summer of 2020. This followed analysis of dozens of samples by the Halal Science Centre at Thailand's Chulalongkorn University. More than a year after the allegations surfaced, no convictions have been reported, however livestock and consumer protection officials have since pledged to increase monitoring of food quality and sourcing and to investigate anyone suspected of violating laws controlling the slaughter of animals or the certification of meat for sale. Under Thai law, offenders could face imprisonment of up to one year and a fine not exceeding Thai Baht THB100,000 ($3,000).

In Malaysia, a cartel was accused in December 2020 by anonymous whistle-blowers speaking to Malay-language daily Sinar Harian of allegedly bribing customs officials for 40 years to import frozen meat (including kangaroo and horse meat, although these claims were subsequently played down by the Malaysian government) from China, Ukraine, Brazil and Argentina. It was declared as halal but was not slaughtered according to Islamic customs or sourced from approved stakeholders before being repackaged as halal beef. Three executives of Syarikat LY Frozen Food Sdn Bhd, the company implicated in alleged fraud, were subsequently charged with money laundering offences and violations of trade descriptions legislation. The trial continues and an arrest warrant has been issued for a fourth executive, who remains at large.

Other high profile examples have included the conviction in 2015 of the owner of a US-based meat exporter, Midamar, found guilty of fraudulently misrepresenting beef sold to Malaysia and Indonesia as halal. In Australia, whistle-blowing reports of abattoirs revealed exploitation of workers and failure to follow halal practices for poultry and other meat destined for Malaysia.

Rising demand equals more scams

According to the UK-based Halal Monitoring Committee (HMC), practices such as mislabelling and contamination have increased with growing consumption of halal products. The certification organisation was established in 2003 to uphold standards for halal food produced and sold in the UK

"There are a lot of imported products in the UK that come in from the global supply chain, the majority of which are from non-majority Muslim countries. Nobody has visibility on those products and whether they conform to the UK Muslim community's expectations," said Nadeem Adam, HMC operations director. 

Because demand for halal products outstrips supply, and because halal meat is more expensive than non-halal (due to labour, inspection and certification costs), unscrupulous suppliers have the opportunity to introduce haram products into the halal supply chain, Adam said. 

Other contributors to the problem, according to Ali Abdallah, independent scientist and halal fraud expert based in Bari, Italy, are the "multiplicity of halal standards, (and) disagreements between halal certification (and accreditation) bodies" about what constitutes halal.

This means a product that has been produced to halal standards in one country may not be considered halal by a different country. And while "these circumstances are more about consumer expectations than actual fraud," explained Adam, the grey areas they create can be exploited by scammers.

Fraud issues in the USA and UK

In the USA, where there is no federal regulation of halal food production, the certification process is performed by third-party certifiers based on differing requirements and their own interpretations of religious tenets, said Melissa McKendree, assistant professor at the Department of Agricultural, Food and Resource Economics (AFRE) at Michigan State University. McKendree is supervising a research project supported by the US Department of Agriculture (USDA) to help the US meat industry improve halal certification and pinpoint potential anti-fraud solutions.

In the UK, much of suspected fraud occurs at the point of slaughter. HMC does not endorse any form of stunning (where the animal is rendered unconscious, by electric shock or other methods, before it is killed) as part of the slaughter process. However, HMC believes meat produced using various stunning (as well as non-halal compliant non-stunning) methods are being labelled and sold as halal in the UK.

Other non-halal practices occur further down the supply chain. In recent years, there have been reports from across the world of traces of pork DNA reportedly being found in meat (and even confectionary) products labelled as halal. Meanwhile, analysis of halal-marked poultry products has shown the water used in “pumping-up” chickens contains proteins of porcine origin.

HMC attempts to combat fraud by only certifying products that meet its halal standards. It uses a patented certification mark, distinct from the generic halal 'logo' (the word ‘halal’ written in Arabic and presented as a symbol), that its more than 1,000 member shops, butchers and takeaways display as a sign to consumers that their products conform to HMC's ‘farm to fork’ halal criteria.

But while such measures may help consumers make informed decisions about what to buy, they do little to tackle malpractice.

Challenges to curbing fraud

A major barrier to stamping out fraud is the difficulty of enforcing halal standards.  The problem arises in non-majority Muslim countries like the US, where the sector is not legally regulated and halal and non-halal supply chains have many opportunities to merge, according to Kelsey Hopkins, who is leading the AFRE research project into halal meat production. 

HMC similarly admits that in the UK, where halal meat makes up approximately 7% (according to HMC estimates) of the country’s combined beef, lamb and chicken supply, it does not have the power to take action when there is suspected crossover with the overwhelming majority of non-halal meat.

"The UK does not have a halal standard, so if somebody suspected that a store was selling something that was not halal-compliant, there is very little we can do," Adam said. 

In countries without halal food regulations, the industry usually has to rely on other consumer protection and trading standards legislation to prosecute anyone suspected of fraud or misrepresentation. "EU countries actually contain all the instruments required to resolve most of these problems," said Abdallah. He also notes the existence of "ethical/moral fraud," where products which do not require halal certification, such as olive oil, are labelled halal to take advantage of gullible consumers. This is different from "legal fraud" where a product is misrepresented, he said.

But legal halal food fraud is extremely difficult to detect, due to the challenge of testing products and inspecting practices at every stage of intricate and increasingly international supply chains.

Fraud issues in Muslim majority countries

Even in Muslim majority countries, where the halal food sector is typically regulated and governments have powers to take enforcement measures against fraudulent producers and retailers, fraud is still a major issue.

In Malaysia, responsibility for halal certification is governed by the Halal Hub Division, a special department set up by the Department of Islamic Development Malaysia (JAKIM). It is an offence in Malaysia to label products as halal without authorisation from JAKIM, and accredited enforcement agencies are authorised to suspend or revoke business licences of those who misuse or falsify halal certifications. Those found to have breached the rules may be prosecuted.

But the recent revelations about a long standing fraud cartel shows that regulations are only as good as their implementation. Media reports at the time the scandal was discovered linked JAKIM officials to the corrupt practices (although this was denied by the authority) and Abdallah cites the "weakness of the authorities in ensuring the integrity of halal certification, and involvement with politics and religion" as factors undermining the successful policing of halal food standards. 

In recognition of the difficulty of policing halal food standards in a globalised world, efforts have been made to internationalise standards.

Harmonising standards

According to Abdallah, the international halal standard involving the greatest number of Muslim countries (57 in total, with a combined population of 1.6 billion) is the OIC/SMIIC 1:2011, containing the general guidelines on halal food. The SMIIC standard is a joint initiative between the Saudi Arabia-based Organisation of Islamic Cooperation (OIC) countries and the Turkey-headquartered Standards and Metrology Institute for the Islamic Countries (SMIIC).

In May 2011, this standard defined the basic requirements at any stage of the food chain, such as receiving, preparation, labelling, processing, packaging control, transport, distribution, storage and service of halal food based on Sharia rules.

Other attempts to harmonise the halal market include the efforts of the World Halal Food Council (WHFC) and the International Halal Accreditation Forum (IHAF).

Technology to the rescue?

To support these standards, technology is increasingly seen as the key to detecting and stamping out halal food fraud.

Following the December 2020 cartel scandal, Malaysia's JAKIM announced plans to improve the recognition of foreign halal certification bodies by adding on-pack QR codes and digitising halal certificates to reduce the risk of duplication.

A team at China's Sichuan University is evaluating a DNA sequencing technology known as clustered regularly interspaced short palindromic repeats (CRISPR) to replace unreliable protein testing and expensive quantitative polymerase chain reaction (qPCR) DNA testing in food authentication.

Elsewhere, researchers at Thailand’s Chulalongkorn University's Halal Science Centre have developed a chromatography-based strip test that can detect DNA from forbidden meats.

In the Netherlands, researchers at Wageningen University & Research and a separate team at Iran's Islamic Azad University Tehran Science and Research Branch are investigating the possibility of using infra-red technology, which can be deployed using hand-held devices, to check meat. Also, food supply chain technology specialists, such as Singapore-based digital B2B platform OneAgrix, are introducing blockchain solutions to track meat from slaughter to the point-of-sale to the consumer.

With the mounting purchasing power of younger, larger generations of Muslim consumers, and growing competition between retailers, from supermarkets to fast food services, more attention is being paid to what influences consumer choice in the halal food sector.

One of the aims of the AFRE project at Michigan State University is to establish whether demand to know the provenance of halal products is strong enough to warrant additional investment in fraud prevention. 

"This project can help supply chain members deduce if consumer willingness to pay for halal certified foods outweighs the potential costs of adopting new traceability and verification technology to ensure proper certification,” said Hopkins.

For HMC, the issue is to do with education and awareness, rather than any question over the willingness of consumers to pay for genuine halal products. "From a consumer perspective, it's about a journey," Adam said, pointing to a July 2020 study by the UK's Bristol University that surveyed the buying behaviours of 250 Muslims and found that 70% of those questioned preferred to buy non-stunned meat. 

"When people start to think about this issue, they do some research and want to learn more about how to choose genuine halal products. We get calls from people who want to understand what the risks are, what to look out for and how to make choices that meet their expectations," he said.

© SalaamGateway.com 2021 All Rights Reserved

Islamic Lifestyle
Electronic device facilitates Quran reading for the blind and visually impaired

Blind and visually impaired Muslims experience challenges when reading Quran copies in braille. They need to have up to six paper volumes to read the sacred 600-page book.

An electronic Quran is being introduced at Makkah’s Grand Mosque to help blind and visually impaired Muslims. The device is around six inches long and four inches wide. It allows users to move easily between pages using high-quality braille cells, Arab News reported. 

“The visually impaired can read the Qur’an easily and navigate through the pages the same way as the entire Quran is registered on the board,” Misha’al Al-Harasani, who led the team that created the device, told Arab News.

Ghazi Al-Thubyani, from the General Presidency for the Affairs of the Two Holy Mosques, said special shelves were being prepared for the 100 electronic braille devices, according to Arab News.

“Each cell can accommodate six dotted points, as well as 10 digital keys that allow the users to enter the page number for swift navigation, as well as rotation buttons. They can also scroll the lines on each side of the texts in braille,” Al-Thubyani told Arab News. “This service will be provided very soon. We are nearly finished with preparing shelves for these devices to be at the reach of the sightless worshippers who visit the holy mosque.”

He said that the project’s first phase took nearly 10 months. The Grand Mosque will still offer paper copies of the Qur’an in Braille in addition to the new devices. “Each mus’haf (Qur’an copy) consists of six volumes. We also have booklets in braille tailored for blind children to help them learn about monotheism and the basics of Islam,” he told Arab News.

Blind and visually impaired Muslims experience challenges when reading Qur’an copies in braille. They need to have up to six paper volumes to read the sacred 600-page book.

In Egypt there is a printing press specialized in braille. It prints all educational curricula in braille for Egyptian schools for blind students. The braille-printed Quran is distinguished by the fact that it cannot be printed on small size papers like the standard Qur’an, as the braille method requires a larger area as well as thick and heavy paper of a certain type. The weight of one sheet ranges between 150 or 160 grams, so that the dots can be clearly printed on it to make the letters easy to read by fingertips. 

The stages of publishing the Quran in braille begin with translating its writing on a tin board. The Holy Quran is narrated to a blind person who converts what he hears into raised letters in braille. The written copies are then entered into the printing machine, after which the bindings are collected and the volumes are sewn and varnished.

In Mecca in 2018, the King Fahd Complex for the Printing of the Holy Quran completed the braille Quran of the Prophet’s city for the blind and produced 6,000 copies. The Saudi project to create a braille Quran started in 2014.

In May 2019, a Saudi team announced that it was able to create the first electronic Quran for the blind, a tablet device that stores the entire Holy Quran and converts fixed braille letters into vowels, formed according to a letter and a page. The team included a number of blind people. The device converts braille letters from fixed to animated forms electronically.

The second part of this article is a translation of a piece by Amal Smai first published in Masrawy.com.

Halal Industry
Italy’s halal food market sees post-pandemic growth and potential

The country’s halal market is worth $5 billion and around 500 businesses have obtained halal certification, according to industry sources. 

Milan – When France’s fast-food chain O’Tacos announced in 2020 that it would be selling its halal-certified French-style meat and vegetable wraps in Italy, many Italian Muslims may have seen this move as a sign that halal was going mainstream in their country. O’Tacos’ first Italian outpost will open in January 2022 in Rome (delayed by Covid-19) and more openings in 2022 are planned in major Italian cities, including Milan and Bologna, said Yassin Baradai, founder of Milan-based Meem Communication, managing the chain’s Italian marketing campaign. 

O’Tacos is not the only Muslim-friendly food retail initiative targeting Italy’s halal consumers, in a country with an estimated 1.6 million Muslim residents. In January 2020, Baradai launched an Italian platform of e-commerce site Deenary.com, selling halal-certified foods and cosmetics, along with modest clothing. 

“The idea for the site came from the need to directly target Italy’s Muslim consumers, whose demands for certified halal products have been largely overlooked in Italy’s mass retail channels,” he said. 

Even though Italy is Europe’s third biggest economy, the domestic halal food market is still underdeveloped and operates more like a patchwork, he said, especially compared to the more mature markets in the UK, France and Germany, all of which actively cater to resident Muslim consumers. That patchwork is nonetheless already very large in the aggregate. The World Halal Authority CEO Mohamed Elkafrawy estimated that there are about 500 small-to-large sized food producers in Italy with halal certification. 

“The halal market in Italy is worth $5 billion and 80% of businesses have obtained international certification from the WHA in Italy,” he told Salaam Gateway. “These foods and companies have had the opportunity to increase their turnover by at least 20% since receiving halal certification, but many companies have far exceeded these thresholds since certification.”  

And integration of this market has been tightening, even if more progress is needed. In 2018 SmartHalal.it launched to sell halal-certified premium Italian made beef and turkey charcuterie directly to consumers across Italy, Europe and the Middle East. 

“When we began, Italian food excellence was not easily accessible to the Italian and international Islamic communities and the site’s aim was to provide Italian products of excellence that are finally certified halal,” founder and CEO Omar Vincenzo told Salaam Gateway. Business has been good during the pandemic, he said: “While we had a decline in wholesale sales, this was covered by the consistent growth in B2C sales.”

The majority of Italy’s Muslims mainly purchase Halal-certified products at the thousands of small supermarkets scattered across the country, which are largely supplied by imports from Morocco, France, Spain and Germany, Baradai said. It is harder to find Italy-made halal-certified products at major supermarkets, although this is changing, slowly, he added. 

“There are a lot of halal-certified foods that are made in Italy, but they are not given enough shelf space in large retail environments and on restaurant menus, nor are they marketed as such for lots of reasons, including very little awareness of halal principles and practices and weak commercial attention to resident Muslim consumers,” he said. “This is largely a marketing problem.”

While domestic demand for halal food is still not fully met by Italian suppliers, a growing number of Italian food producers, especially those with a strong international presence, have implemented halal certification to enter international Islamic markets, said Baradai.  

Elkafrawy said that the ‘Made in Italy’ label is already extremely well-known and appreciated abroad, therefore products with DOP, IGP, Organic and other Italian certifications not only have strong sales potential, but are already in great demand. Indeed, Italy boasts the most food products with European Union (EU)-accredited designation of origin and geographical indication labels (315 foods and 526 wines), which ensure traceability and food quality and safety standards and are expected to generate a turnover of EUR17 billion in 2021, according to industry association Federalimentare.

A growing number of these products are also certified halal. Among the first to gain halal certification were Mozzarella di Buffalo DOP in 2011 and Pecorino Toscano DOP in 2013.  

Several Italian producers have followed suit. “Certainly, among the most requested Italian made products certified by WHA are dried pasta, all types of food preserves, vinegars, olive oils, as well as dried fruit, processed meats and cheeses,” Elkafrawy said. Examples of well-known global brands that have halal certification (although not necessarily from the WHA) are Barilla, De Cecco and La Molisana (dried pasta), Mutti, La Doria and LeDue Valli (canned tomatoes and sauces), Granarolo, Parmalat and Mukki (milk and dairy products), and San Pellegrino and Ferrarelle (bottled mineral water).   

Demand for halal certification has increased further during the pandemic, said Elkafrawy, and this is “probably due to the search for more ‘flourishing’ markets than the national one,” he noted. Indeed export manager at Ferrarelle, Gaspare Magnifico Fracaro, told Salaam Gateway that all production lines are halal-compliant and Ferrarelle’s glass bottled mineral water has also become strategic for entering and further penetration of new markets, especially the fast moving, premium product seeking markets in the Middle East. 

“To date, we distribute to almost all the Gulf countries and, despite our recent entry there, we believe in the great potential of these markets, with long-term targeted market penetration strategies planned for the coming years.” 

Giovanni Moratto, owner of Italian pastry and sweets producer Dolcefreddo Moralberti, said halal certification added value and increased competitiveness, especially in global markets. 

“We already export to the Saudi Arabia, United Arab Emirates (UAE) and North African markets, and we are now looking to enter major far east markets like Malaysia and Indonesia because of their great potential.”

His company boasts 70 halal-certified pastry products – “more than any other Italian bakery and pastry manufacturer in Italy,” he told Salaam Gateway. About 70% of Moralberti’s halal sweets are sold in Italy and 30% are sold abroad. “We sell to both the food service and mass retail segments, in some of Italy’s biggest supermarket chains, like Conad, Coop and the French-owned Carrefour. It’s no surprise that our top selling halal product in Italy and across the globe is Italy’s most popular dessert - Tiramisù,” Moratto said.  

© SalaamGateway.com 2021 All Rights Reserved

Macroeconomics
Tough year ahead for much of the OIC

For many of the 57 member countries of the Organisation of Islamic Council (OIC), 2022 is going to be a challenge. Issues that have plagued countries will continue, while new challenges will arise as nations battle to rebound from the COVID-19 pandemic, climatic disruptions, and socio-political instability.

 

There will be much to discuss at the General Secretariat of the OIC’s 35th session of the Islamic Committee of the International Crescent (ICIC) on 5 January. While there are pockets of stability and socio-economic development in the OIC, notably the Gulf countries and the more economically developed Southeast Asian nations of Malaysia and Indonesia, the challenges are particularly acute in the Middle East, Africa and Central Asia, with humanitarian crises, rising unemployment, inequality and inflation.

According to medical and security specialist International SOS’s Risk Outlook 2022, OIC countries are among the most ‘extreme’, with Afghanistan, Syria, Libya and Iraq in the top five most dangerous countries to visit this year. Other nations in the ‘extreme’ category include Mali, Yemen, and Somalia as well as certain parts of Nigeria and Pakistan.

Yet while the situation is difficult in much of the OIC, it is the same across much of the world, with the World Bank and World Health Organisation estimating more than half a billion people were pushed into extreme poverty in 2021.

North Africa and the Sahel

In North Africa, the instability in Libya over the past decade continues to impact the region and its neighbours. Libya was a major destination market prior to 2011 for exports and foreign labour, which has largely dried up, while the political situation has remained fragile.

The pandemic hit the country hard, with the economy contracting by 36.4% in 2020, according to Fitch Solutions, although is set for a rebound this year on the back of higher oil prices. The Libyan conflict has had dire spillover consequences for the Sahel region, with the French military and UN presence in the region spluttering since 2013.

Last year was the most violent in the past decade for Mali, Bukina Faso and Niger, with 2,246 terrorist attacks and battles, compared to 244 in 2013, and 5,317 deaths, according to the Armed Conflict Location and Event Data project. Instability in the Sahel and parts of North Africa are also feeding the drive to migrate to Europe, with the area a conduit for human trafficking routes to Libya and beyond.

As the Europe Union’s response continues to focus on the military in the Sahel, and through strengthening its border force, Frontex, which is set to having a standing force of 10,000 by 2027, major challenges for the region are set to continue. In 2022, the UN notes that more than 30 million Sahelians will need assistance and protection, over 1 million more than 2021. Some 3.5 million people have been forced to flee their homes.

Sub Saharan Africa

The pandemic has disrupted economies across Africa, with the IMF estimating an additional 30 million people have been plunged into extreme poverty. On top of the impact of COVID-19, conflict and severe climatic events are causing further instability. Millions of people have been displaced over the past year in Ethiopia, Cameroon, Nigeria, and the Sahel.

In West and Central Africa, the crises are impacting more than 61 million people, with 28 million currently food insecure, notes the UN. Climate change, heavy rains and flooding affected more than 1.2 million people in 13 countries in 2021. In Southern Africa, the picture is also not rosey, with drought across much of the region. In Eastern Africa, the Ethiopian conflict has impacted the whole region, while political instability in Sudan is also causing negative ramifications.

On the flip side, Sub-Saharan African economies are forecast to grow by 3.8% in 2022, largely on the back of improved global trade and commodity prices. However, food inflation is expected to be particularly challenging, having risen from 2% per year in 2019, to 11% in 2021, while globally, food inflation rose 30% in 2021, according to the IMF.

The Middle East

The conflicts in Syria and Yemen continue to loom large over the Middle East. While signs of rapprochement between Gulf states and Syria holds some promise for greater stability, the Syrian economy has been ravaged, and there seems minimal funds available for substantive reconstruction to take place. The Syrian conflict, which is entering its twelfth year, is also hobbling the chances of Lebanon’s economic recovery, which has been hit by a financial crisis since October 2019, and the depreciation of the currency by over 90%.

Syria’s currency has also seriously depreciated, in part due to the Lebanese financial crisis, with the country having been Syria’s business and financial window to the world, and a major destination for deposits. Lebanese parliamentary elections in March are not expected to cause a sea-change amid deteriorating economic conditions, with an estimated 70% of the population on or below the poverty line.

In Iraq, the country is still reeling from the US-led invasion and the wider Syria conflict, while a record low rain-fall in 2021, has impacted the agricultural sector. In neighbouring Turkey, the lira’s deprecation by 44% to the US dollar in 2021, has caused serious problems for the economy, with the cost of energy and inflation rising, although exports reached an all-time high on the back of the weak lira.

In Yemen, over six years of conflict has devastated the country, with over 20 million people in need of aid – equivalent to 66% of the population – and over 4 million internally displaced.

Southern Asia

The withdrawal of US and NATO military forces from Afghanistan in August 2021, attracted significant global media attention, but the aftermath has been less covered as the country has descended into further economic malaise. OIC countries gathered in Islamabad, Pakistan, to discuss the Afghan humanitarian crisis in December, agreeing to help Afghanistan on humanitarian grounds and the Islamic Development Bank to establish a Humanitarian Trust Fund.

The poorest country in Asia, per capita incomes declined from $650 in 2012, to $508 in 2020, and is forecast to drop to $350 this year, according to UN figures. Afghanistan’s GDP is slated to decline by 20%, to $16 billion, and could potentially decline by 30% if the situation continues to deteriorate. Some 22.8 million face acute food insecurity.

Neighbouring Pakistan continues to be impacted by the Afghan crisis, but the economy is looking more optimistic this year, with growth forecast at 3.2%.

On the other side of the Indian subcontinent, Bangladesh has had a tough couple of years, with the pandemic impacting the economy, and the country hosting 884,000 Rohingya refugees. The outlook for 2022, is more positive, with the country’s biggest export segment, garments, set to rebound as buying increases in the major export markets of Europe and North America, while the economy could reach half a trillion dollars this fiscal year if double-digit growth is achieved.

 

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