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Halal Industry
India-Gulf trade fears over Islamophobic comments

Conflict reflects long-term diplomatic concerns for Indian exporters.

 

New Delhi: A campaign to boycott Indian products in Islamic countries because of anti-Muslim comments made by leaders of India’s ruling Bharatiya Janata Party (BJP) may have temporarily died down, but given the country’s continuing Hindu-Muslim tensions, the risk of future supply disruption remains, warn economists.

“Considering the political situation in India, there is a great possibility that another Islamophobic (comment) could come from the ruling party or its supporters, then once again there … could be a public backlash against Indian products,” Sushant Singh, a senior fellow at the Centre of Policy Research, in New Delhi, told Salaam Gateway.

The recent row followed comments made in May by Nupur Sharma, a BJP spokesperson, during a television debate and subsequent tweet in June by Naveen Kumar Jindal, another BJP spokesperson, about Prophet Mohammad that stoked anger across the Islamic world with calls to boycott of Indian products.

While both officials were suspended from the party, concerns about potential losses to Indian food exports to Muslim countries remain, should similar controversies erupt again linked to the BJP.

The ruling party advocates Hindutva (Hindu-ness), effectively defining Indian culture in terms of Hindu values. Party members have criticised the secular traditions of the country’s other main national party Indian National Congress that has been seen as more accommodating to India’s 210 million Muslims.

The recent row has already damaged Indian trade and diplomatic relations. After a sustained social media campaign against India, a Kuwaiti supermarket pulled Indian products from its shelves and Qatar demanded an apology from India for the Islamophobic comments.

At least 17 other Islamic countries and the Organisation of Islamic Cooperation condemned the remarks.

Worries during the recent row have focused especially on rice, buffalo meat, spices, marine products, fruits, vegetables and sugar, India’s largest agricultural exports to the six wealthy Gulf Cooperation Council (GCC) countries – Saudi Arabia, United Arab Emirates (UAE), Bahrain, Qatar, Kuwait and Oman.

These sales had been increasing steadily, according to Indian ministry of commerce and industry data. In a statement released in June last year and accounting for the financial year ending 31 March, the ministry said India’s exports of non-basmati rice to GCC countries grew 26.01%, while spice exports grew 52.39% and sugar 50.88%.

Produced in the northern Indian state, 2,700 tons of basmati rice was shipped to the GCC. Iran and Iraq also rank among the key customers, accounting for more than $2.5 billion in receipts, according to the ministry.

The Indian government is trying to expand export sales to the GCC by promoting other unique Indian products like saffron and dry fruits from Kashmir and targeting Saudi Arabian fast moving consumer goods retailer LuLu Group International, the ministry said.

The media statement added that, while COVID-19 had severely affected India’s export of livestock products and marine products, overall agriculture exports to GCC countries grew 7.15%.

It is these products that are vulnerable to any boycotts.

Although demand for Indian meat products in the Gulf countries is high and, until 2018 export growth was good, the sector has been facing serious challenges, said Payal Kaur Bakshi, export sales manager of the Al-Hassan Group in New Delhi.

The company sells halal and fresh food internationally.

Bakshi said a key reason for the recent difficulties has been reluctance by the importing countries’ halal regulators to visit India and certify producers and exporters as halal-compliant.

“For many years the delegations of several countries have not come to India and therefore we are not able to export to those countries. It is not clear where the problem lies,” she told Salam Gateway.

Hence, while the Al-Hassan Group has been exporting buffalo and sheep meat to the UAE and Oman, it has been unable to access other GCC markets because of a lack of approvals. This has given key competitors Brazil, Argentina and Australia a freer run.

However, she said the latest row has not worsened the situation with the company not receiving any requests to reduce or halt imports from GCC buyers or regulators.

Indian companies are also keen to secure certification to facilitate exports to Muslim-majority countries, said Waseem Akhtar, halal coordinator at Jamiat Ulama Halal Foundation, a New Delhi-based halal certifying agency.

Renewal certification numbers were constantly increasing.

India’s versatile apparel sector is also keeping an eye on trade relations with the Gulf with annual clothing and accessories exports to the region worth $2.44 billion in the financial year under discussion.

“It is basically a mid to low-segment of apparel market, largely ladies’ dresses and children’s garments,” Chandrima Chatterjee, secretary-general of the Confederation of Indian Textile Industry in New Delhi told Salaam Gateway, labelling the recent political tensions as a cause of worry.

Among the Gulf markets, Dubai holds a special significance for Indian garment exporters as it is a conduit to markets in Iraq, Iran and other countries in the region where financial systems are not reliable, said Chatterjee.

India exported $43.93 billion’s worth of products in the year to March 2022 to the GCC; a 58% year-on-year increase and accounting for 10.4% of India's total exports. Given this value, Singh said it would be tough for India to find a replacement if lost, particularly because of the stringent technical and medical standards western countries applied on these products.

India’s exports were already small relative to its economy with Singh adding that anything Indian companies were unable to export compounded the country’s trade and fiscal deficit.

Trading Economics data reflects the country’s trade deficit in May 2022 was an eye-watering $24.29 billion. The Controller General of Accounts (CGA) said India’s fiscal deficit hit Indian Rupees INR13.16 trillion ($168 billion) in February 2022.

Furthermore, Singh said many Indian companies struggle to maintain a diplomatic distance from the central government as the country’s corporate world was closely aligned with public authorities.

“It’s not possible for a business to function without the approval or support of the government, especially one accused of intolerance towards its critics, such as the present administration,” said Singh.

Although there are possibilities to increase south Asian exports to Bangladesh, Maldives or Sri Lanka, they cannot be a long-term solution to any loss of GCC trade.

© SalaamGateway.com 2022. All Rights Reserved

Islamic Lifestyle
Helping Indian Muslim women fulfil their dreams

Harvard graduate guides young women to enter the workforce and achieve professional development.

 

Dr. Ruha Shadab is a Harvard graduate in public policy and winner of Harvard’s Women Leadership Award. In 2019 she founded the Led By Foundation with the vision to raise the representation of Indian Muslim women in the workforce.

The foundation was developed at Harvard with seed funding from the Social Innovation and Change Initiative at the Harvard Kennedy School but functions in India; a country home to one of the world’s largest Muslim populations with 200 million. Half of them are women, but they lack opportunities.

According to Shadab, Indian Muslim women are massively underrepresented in business. Consequently, she is creating opportunities by providing them with real-life skills, a supportive ecosystem and a professional network to showcase their talent globally.

She runs two programmes for Muslim women; the five-month intensive leadership programme Led By Corporate Leaders Fellowship and the year-long Led By Accelerator programme that focuses on professional development.

Salaam Gateway spoke to Shadab about how the foundation is providing guidance and mentorship to young Muslim women.

Salaam Gateway (SG): What is the Led By Foundation and why did you start it?

Ruha Shadab: The Led By Foundation is a leadership incubator for Indian Muslim women to raise their representation in the workforce. These women are practically invisible in the country’s workforce, yet there are 70 million educated Muslim women in India. They face the double disadvantage of being female and Muslim.

To flourish you need mentorship and the foundation is particularly providing that opportunity to Muslim women. Data shows they are grossly underrepresented and require targeted intervention. Ultimately it will not only help the community, but also the country. We are creating a community of Indian Muslim women with professional skill sets so they can fulfil their goals.

SG: What challenges have you faced initiating this project?

Shadab: Setting up the right team is key for a start-up, but it is challenging to find the right set of intelligent, motivated and talented people. Alhamdullilah (praise be to God), we now have an incredible team with coaches, mentors and facilitators from across the world.

 

Dr. Ruha Shadab is pushing boundaries (Courtesy: Led By Foundation).

 

SG: Where do you find Indian Muslim women and how can you improve their situation?

Shadab: Our fellows and participants come from every state and union territory in India. Muslim women have the ambition, aptitude and aspiration and the country needs to provide them with access, agency and avenues to realise their professional dreams and become economically empowered.

Level playing fields for women professionals are fundamental. It is important that we follow a policy providing equal opportunity for everyone. Even the Indian Constitution mandates the prohibition of discrimination on grounds of religion, race, caste, sex or place of birth and demands equal opportunity in matters of public employment. Creating an environment free from discrimination and harassment is essential and there are a few companies helping women in their workforce to flourish.

SG: How has it helped Muslim women fulfil their dreams?

Shadab: We receive multiple messages each week from fellows and participants thanking us for helping them find jobs, receive interviews or get guidance from mentors in their field. This helps catalyse employment and higher education for Muslim women. Our impact report numbers are as follows:

• Average net promoter score – 92

• 44.4% call back rate from recruiters

• Increase in access to powerful networks and mentors by 52%

• Increase in access to financial support by 24%

SG: Do you think more such initiatives are needed for India’s conservative community?

Shadab: We need all hands on deck. India’s female labour force participation rate has been declining despite a rising percentage of educated women. Despite improved educational access, Muslim women are unable to meaningfully benefit. There is a significant amount of work to be done from within and outside our Muslim community to ensure the 100 million Muslim women in India achieve their career goals.

SG: Do you think the lack of initiatives like yours has hindered Muslim Indian women develop entrepreneurial skills?

Shadab: Organisations like mine are here because there is a need for targeted interventions. The need arises from systemic issues and I hope positive change will encourage others to come forward.

SG: What needs to change so more Muslim women may gain their space?

Shadab: Policymakers, Muslim community leaders, companies and universities must unite with a clear and explicit acceptance of the problem and magnitude of the underrepresentation. Each stakeholder has unique core competencies they can leverage to create an inclusive environment actively supporting Muslim women’s education and employment paths. Only a joint effort can bring about change in real terms.

SG: What message do you have for Muslim women?

Shadab: Dream big and think differently to what you have been taught. You may not have the opportunities and money to move forward, but you should look for mentors and supporters to fulfil your dreams.

© SalaamGateway.com 2022. All Rights Reserved

Macroeconomics
OIC countries have a middling to low ‘state of peace’

Eight OIC countries are in the ‘high’ state of peace category, 21 in the medium category, 11 in the low category and eight are the least peaceful worldwide.

 

Peacefulness has declined to its to lowest level in 15 years fuelled by post-COVID-19 economic uncertainty and the Ukraine conflict, according to the the 16th edition of the Global Peace Index from the Institute for Economics & Peace (IEP).

Out of the 163 countries ranked, 48 out of the 57 member countries of the Organisation of Islamic Council (OIC) were included. No OIC countries featured in the top 15 slots, the ‘very high’ state of peace. Eight OIC countries were in the ‘high’ state of peace category, 21 in the ‘medium’ category, 11 in the low category, and eight in the ‘very low’ category.

Iceland remains the most peaceful country worldwide, a position it has held since 2008. New Zealand, Ireland, Denmark and Austria also top the Index. For the fifth consecutive year, Afghanistan is the least peaceful country, followed by Yemen, Syria, Russia and South Sudan. Out of the 14 countries in the very low peace category, eight are in the OIC.

Seven of the 10 countries at the top of the Index are in Europe, with Turkey the only country in the region to be ranked outside the top half of the Index.

Malaysia topped the list for OIC countries in the ‘high’ state of peace category, in 18th place, followed by Qatar in 23rd place (up six places on the previous Index), Kuwait at 39 (down one place), Albania at 41, Indonesia at 47 (down two places), Jordan at 57 (up 15 places), the UAE at 60 (up one place).

Most OIC countries were in the the medium category. Senegal dropped 12 places to 70, Kosovo rose 8 places to 71, Morocco rose 9 places to 74, Gabon was ranked 75, and Tunisia dropped three places to 85. Tanzania was ranked 85, Uzbekistan 86 (up 7 places), Kyrgyzstan 91 (down 21), and Tajikistan to 92 (up six places). Bangladesh was 96 (up 6 places), Kazakhstan was ranked 97 (down 29), and Bahrain came 99th. Turkmenistan was at 104, Guyana at 107, Cote d’Ivoire at 108, Algeria 109, Mauritania at 112, and Djibouti at 113. Saudi Arabia was ranked 119, up 8 places, Uganda 121, and Egypt at 126 (up five places).

In the ‘low’ category, Azerbaijan was ranked 128, Palestine 133, Chad 136, Lebanon 138, Niger 140, Iran 141, Cameroon 142, Nigeria 143, Turkey 145 (up five places), Burkina Faso 146 (down 12 places), and Pakistan at 147 (up one place).

In the ‘very low’ category – the least peaceful - Mali was ranked 150, Libya 151, Sudan 154, Somalia 156, Iraq 157, Syria 161, Yemen 162, and Afghanistan at 163.

 

Dark green ‘very high’ state of peace, green ‘high’, yellow ‘medium’, orange ‘low’, red ‘very low’ (Global Peace Index 2022).

 

The Index’s measure of global peacefulness showed a deterioration of 0.3% in 2021, the eleventh deterioration in peacefulness in the last 14 years. Ninety countries improved, and 71 deteriorated, which the reported said highlighted “that countries deteriorate much faster than they improve”.

The global economic impact of violence was $16.5 trillion in 2021, equivalent to 10.9% of global GDP, or $2,117 per person. For the 10 countries most affected by violence, the average economic impact was equivalent to 34% of GDP, compared to 3.6% in the countries least affected.

On the positive side, terrorism attacks declined, with 70 countries recording no attacks in 2021, the best result since 2008. Twenty-eight countries have high levels of instability, and 10 countries recorded the worst possible political terror score.

Nonetheless, the political terror scale, political insecurity, neighbouring country relations, refugees and internally-displaced-persons (IDPs) reached their worst score since the inception of the Index.

However, inflation, which has increased food insecurity, and political instability is having a negative impact, with Africa, South Asia and the Middle East under the greatest threat, the report notes.

The global inequality in peacefulness has continued to increase. Since 2008, the 25 least peaceful countries deteriorated on average by 16%, while the 25 most peaceful countries improved by 5.1%. Since 2008, 116 countries reduced their homicide rate.

“Last year we warned about the economic fallout from COVID-19. We are now experiencing supply chain shortages, rising inflation, and food insecurity that have been compounded by the tragic events in Ukraine. The political and economic consequences of this will reverberate for years to come. When combined with the record poor scores for neighbouring relations, political insecurity and intensity of internal conflict, governments, organisations, and leaders must harness the power of peace,” said Steve Killelea, Founder & Executive Chairman of IEP, to the press.

“The economic value of lost peace reached record levels in 2021. There is a need to reverse this trend, and the Index has shown that those countries that implement the attitudes, institutions and structures that create and sustain peaceful societies, witness an improved economic outcome,” he added.

The intensity of violent demonstrations has increased by 49% since 2008, with 126 of the 163 countries in the Index deteriorating. The report stated that this is a global trend, affecting all regions of the world except the Middle East and North Africa.

South Asia has the highest frequency and intensity of violent demonstrations by region, with India, Sri Lanka, Bangladesh, and Pakistan recording their highest levels since the first index. In Europe, there were widespread anti-lockdown protests, especially in Belgium, France, the Netherlands, Austria, Croatia and the UK, with similar developments in North America, according to the report.

Halal Industry
Newswrap: Halal industry

Saudi Arabia's Almarai to invest $108 million in seafood and poultry business; UK Halal baby food producer For Aisha aims for $12.2 million turnover by 2026; South Korea’s SPC establishes $31 million joint venture with Malaysia’s Berjaya Food to target halal market; UAE bans Indian wheat exports for four months; Egypt and Vietnam to strengthen bilateral trade.

 

Saudi Arabia's Almarai to invest $108 million in seafood and poultry business

Almarai, the largest dairy company in the Middle East is set to invest $108 million in its expansion plans in the seafood sector and to shore up poultry supplies, reported The National.

In a filing to the Tadawul stock exchange, Almarai is to invest $67.2 million from operating cash flows in the seafood processing business. The company is to invest $40.8 million to “secure parent poultry birds supply to mitigate the “imminent risk” of parent stock shortages in the kingdom”. “Once further investments are deployed to secure additional parent stock supply, the parent bird facility will be utilised for hatching egg production as initially planned for poultry capacity expansion,” the company said. Such moves fit into the kingdom’s food security agenda, part of its Vision 2030. In May 2021, Almarai announced plans to invest $1.76 billion over five years to expand its poultry business in Saudi Arabia.

UK Halal baby food producer For Aisha aims for $12.2 million turnover by 2026

UK-based For Aisha has appointed three new directors and aims to have a turnover of £10 million ($12.2 million) by 2026 to cement its place as the world’s leading Halal baby food brand, reported The Business Desk. Executive chair Joy Parkinson, financial director Leighton Paul and commercial director Emelyne Bradley have joined For Aisha, with all three having worked for major brands, including Faith in Nature, Baylis & Harding, Mars, Coca-Cola and McVities. For Aisha recently secured supplier contracts in the UAE and Sinagpore and plans to enter more markets in Europe, the Middle East and Africa, the website reported.

South Korea’s SPC establishes $31 million joint venture with Malaysia’s Berjaya Food to target halal market

Paris Croissant, a subsidiary of Paris Baguette Singapore, part of South Korea’s SPC Group, has invested $31 million to establish a joint venture with Malaysia’s Berjaya Food to target Malaysia’s halal food sector. The new venture, Berjaya Paris Baguette, will have a new food manufacturing facility in Nusajaya Tech Park, in the city of Johor Bahru, near Tanjung port, reported The Korea Herald. The 16,500-square-metre lot is slated to be completed by June 2023, and will manufacture some 100 types of pastries, cakes and sauces. Kuala Lumpur-based Berjaya Food has the franchises for Starbucks and Jollibean, among others, in Malaysia.

UAE bans Indian wheat exports for four months

The UAE has implemented a four month ban on exports and re-exports of wheat and wheat flour originating from India, reported Reuters. The UAE authorities cited disruptions to global trade flows as the reason for the ban, although clarified that Indian wheat exports to the UAE would continue for local consumption. India, the world’s second largest wheat producer, banned wheat exports on 14 May, excluding exports already secured through letters of credit. The UAE and India signed the Comprehensive Economic Partnership Trade Agreement (CEPA) in February, which took effect on 1 May, which aims to remove tariffs on goods and bolster trade to $100 million by 2027.

Egypt and Vietnam to strengthen bilateral trade

During a visit between the Egyptian Ambassador to Vietnam and the Vietnamese Prime Minister, the two countries called for strengthening bilateral trade to $1 billion a year, reported Voice of Vietnam. The Vietnamese emphasised increased economies ties in oil and gas, chemical, garment and agricultural cooperation. In 2020, bilateral trade was $515 million, according to General Department of Vietnam Customs data. Egypt is Vietnam’s second largest trade partner in Africa, after South Africa. The Vietnamese also called on Egypt to continue Arabic language training scholarships and to provide training on Halal food certifications standards.

Islamic Lifestyle
The tales of two cities: How Cape Town and New York unleash sustained tourism recovery

Speaking at a halal tourism industry event, the leaders of the cities’ destination marketing organisations revealed their motivation to understand Muslim travellers better and the strategies to promote the towns as Muslim-friendly destinations.

 

Cape Town and New York City are accelerating their tourism recovery efforts by tapping into the Muslim traveller revenue potential that the Dinar Standard’s State of the Global Islamic Economy Report estimates will reach $189 billion in 2025.

Enver Duminy, Cape Town Tourism CEO, said questions reflecting who Cape Town is and what the city wants to represent, were crucial in founding a new tourism blueprint.

“Our heritage, the fabric of our city, our culture, that intertwined who we are today, is because it’s a strong Muslim presence in everything we do,” Duminy said.

The Dutch East India Company established Cape Town as a refuelling station en route to the Spice Route countries in 1652. These ships brought labourers from the Moluccas (Maluka Islands) and political prisoners from Indonesia, introducing Islam to the region.

However, the religion only took root in the early 1800s when enslaved Indian Muslims arrived.

Hailing from the Indonesian spice island Tidore, the religious teacher Tuan Guru established the Masjid ul-Awwal, South Africa’s first mosque, in 1794 and wrote out the Qur’an from memory while imprisoned on Robben Island.

Although Muslims account for a quarter of Cape Town’s 4.6 million-strong population, the city typically has been sold and portrayed as a European destination in Africa.

“If we haven’t been speaking to (the Muslim) audience, that’s on us,” Duminy said, alluding to missed opportunities.

He states 30% of the world’s Muslim population resides in North Africa and, as an initial step to tapping into the halal tourism potential, his team and stakeholders have created a glossary to facilitate industry education about halal requirements and raise awareness of what being Muslim-friendly entails.

“As a destination, we cannot be strictly halal. There are certain parts of the city that can provide it, but we need to be careful of the sensitivities,” Duminy said.

One such sensitivity prevails around food where the industry operates on European and Western standards and Duminy named bacon and champagne breakfasts as examples. However, through a chef’s exchange programme, Singaporean experts have taught local chefs how to prepare halal food that Duminy says is “world-class and tasty beyond belief”.

As the next step, Cape Town Tourism will launch a Muslim travellers’ guide that Duminy believes is both innovative and required as part of the journey.

New York City's moves

Meanwhile, across the Atlantic Ocean, New York City has already taken that step with the NYC & Company launching the inaugural Halal Travel Guide by a US tourism organisation in March.

NYC & Company is the city’s official destination marketing organisation and convention and visitors bureau.

“We’re looking at how to market the destination differently,” Fred Dixon, President and CEO at NYC & Company, said about the commitment to promoting an inclusive New York City experience and expanding the audiences as part of the city’s tourism recovery strategy.

Available at nycgo.com/HalalTravelGuide, the resource includes prayer places, Muslim-friendly hotels and dining recommendations for every cuisine type and shares tips and advice from Muslim travel experts.

New York’s Muslim community lives around the 275 mosques spread across the city’s five boroughs – more than any other American metro area. The Brooklyn borough is home to one of the world’s most diverse Muslim communities, representing descendants from every continent and one of the nation’s oldest surviving mosques.

Dixon said making an equitable recovery was another goal; essentially prioritising small businesses, local communities and neighbourhoods over the metropolis’ prominent attractions as a tactic.

The Impact Report of Muslim Contributions to New York City, published by the Institute for Social Policy and Understanding in 2016, shows how Muslims fuel the city’s economy and create thousands of jobs. According to the report, Muslims owned 95,816 small businesses and employed 251,864 workers.

“We realised we can go much deeper into diversity and drill down into our communities,” Dixon said, acknowledging the size of the Muslim population.

According to him, Muslims account for 10% of the city’s estimated 8.5 million inhabitants.

“The Muslim community has been an integral part of the city’s fabric for nearly 400 years and we are committed to showcasing the authentic halal offerings,” Dixon said.

Like Cape Town, the history of Islam in New York City dates to the 17th century when Muslims arrived in the area as part of the Dutch settlement New Amsterdam. While Dixon sees substantial optimism in the market and expects as much as 80% of visitation coming back this year, he acknowledges airline capacity and entry procedures may impact on recovery, and the rising inflation.

However, NYC & Company will continue investing in its new strategy by expanding the Halal Travel Guide’s content, making it digital and engaging with community influencers to talk about their experiences.

Moreover, Dixon and his team are looking at translations to make the content available to as many people as possible with Arabic probably the first language.

© SalaamGateway.com 2022. All Rights Reserved

Islamic Lifestyle
Major boost for Umrah travel as market joins hands with tourism

The upcoming Umrah travel season is expected to see an influx of pilgrims as package prices drop and travellers combine their trips with local tourism activities.

 

Dubai: As Saudi Arabia has instituted issuing Umrah visas online within hours, international Umrah pilgrims are making the most of their trips to the kingdom and extending their stay to explore the country.

The visas allow pilgrims to stay in the kingdom for 30 days and made visiting the country substantially easier. The Umrah pilgrimage to Mecca can be undertaken at any time of the year, while the Hajj can only be performed during specific dates according to Islamic lunar calendar.

“Travellers using this visa can easily combine local tourism packages and sightseeing tours to their umrah package,” Saad Salman, co-founder of Canada-based Funadiq, a Maqam-approved umrah online travel agency (OTA) and co-founder of Umrah Companions, told Salaam Gateway.

He added the company offered desert safaris, beach resort stays and city tours as extensions to visitors’ Umrah. As Umrah become increasingly unaffordable, travellers want to maximise their experience by adding vacation-like options to their packages.

UmrahTrip, an India-based Maqam-approved OTA, has also seen a surge in demand for packages that combine umrah with sightseeing activities in Saudi Arabia. Ali Sajil, head of product and technology at UmrahTrip, said pilgrims were looking to follow Prophet Muhammad’s trail; experience authentic stories and visit Riyadh, Al Ula and Taif.

Fuelled by tourism

Responding to this demand, UmrahTrip plans to offer umrah extension packages from next season that include local Saudi Arabia tours as well as stopovers in Middle Eastern cities like Dubai. UmrahTrip has served more than 34,000 pilgrims since launching in 2020 and, as part of Akbar Travel, one of India's largest travel companies, the platform recently launched the first WhatsApp service enabling pilgrims to book their entire trip and get an Umrah visa through the app.

Meanwhile, Funadiq, which has served around 80,000 pilgrims since launching in 2017, is using virtual reality for umrah to ensure pilgrims feel the Mecca environment prior to travelling. These digital services are in stark contrast to the traditional booking process where pilgrims could only book through local umrah agents and had to wait one to two weeks for approval.

Today, pilgrims can choose from 35 OTAs certified by Maqam, the Ministry of Hajj and Umrah’s global distribution system. They can personalise their packages and obtain an umrah e-visa in less than four hours without submitting their passport.

“Umrah visits will enhance international tourism because pilgrims are more likely to extend their journeys and spend more time seeing Saudi Arabia’s attractions,” said Mohammed BinMahfouz, CEO and cofounder of Umrahme, a UAE-based Maqam-approved OTA.

Since launching in 2019, Umrahme has served around 4.5 million pilgrims globally. The company plans to launch tailored packages to suit travellers’ individual needs, preferences and budgets and is currently building a new platform dedicated to Hajj.

Another factor fuelling the Umrah market is the introduction of the Saudi tourist e-visa Muslim travellers are using for both umrah travel and sightseeing around the kingdom. According to UmrahTrip’s Sajil, there has been a 20% increase in tourist visa markets for Umrah travel since January 2022.

The multiple-entry tourist e-visa is valid for one year and allows visitors to stay in the country for up to 90 days. However, only 49 nationalities can apply for this visa online.

“Tourist visas are more difficult to acquire than pilgrim visas and their issuance is limited to a number of nationalities, barring major Umrah markets such as Pakistan, Indonesia and India,” said BinMahfouz.

 

Read - Indonesian Hajj travel agents scramble to adapt to new system
 
Read - Saudi Arabia’s Neom to promote religious heritage for global tourists
 
Read - Tourists flock to Saudi Arabia as the country opens to foreign visitors
 
Read - Secondary cities, domestic tourism pave the way for a tourism boom in Saudi Arabia

 

Longer stays, new source markets

Saudi Arabia recently eliminated most precautionary measures for the Two Holy Mosques, permitting international pilgrims to perform umrah after two years of Covid-19 restrictions. Since then, Umrah OTAs have experienced a surge in demand for transportation, lodging and visa booking services with indications pointing to a robust resurgence in Umrah travel in 2022.

Umrahme’s business is already at 80% of pre-pandemic levels with 100% pre-pandemic levels predicted by the start of the following season, according to BinMahfouz. He said pent-up demand and the government’s booking process facilitation would stimulate a hike in pilgrims.

More than 1.5 million people visited Saudi Arabia for Umrah during Ramadan 2022 with pilgrims from Iraq, Pakistan, Indonesia, and Egypt topping the list. Sajil said post-pandemic numbers reflected the resurgence of religious tourism.

“This speaks volumes on the role of technology in facilitating one of the world's largest religious gatherings. Combined with the pent-up savings due to COVID-19 travel bans and these factors are translating into lavish spending patterns where we expect more people to travel with the entire family,” he said.

UmrahTrip recently noticed demand from new source markets in Central Asia including Uzbekistan, Tajikistan, Kyrgyzstan, Kazakhstan and Iraq. Stay lengths were also reverting to pre-pandemic values with durations ranging from four to nine nights in Mecca and three to six nights in Medina.

He said incoming business was currently dominated by group bookings, leading to increased demand for buses as the main form of transportation.

Next month UmrahTrip will take new group bookings for the Haramain high speed railway between Mecca and Medina, becoming one of the first OTAs to offer this option after securing government approvals.

Price drop expected

Historically, the new Umrah season opens immediately after Hajj. However, in the past year, Umrah package prices have soared due to an influx of pilgrims; a limited supply of hotel rooms and global airfare hikes.

“Due to the opening of key markets in the last few months, we’ve witnessed a spike in demand of about 65% compared to the previous year, along with a drop in hotel rooms supply due to the closure of a considerable number of properties in Mecca,” said BinMahfouz, adding this was one of the contributors to a significant increase in the overall package price.

Another was global inflation. However, according to Salman, as an example the Pakistani rupee has significantly devalued against the US dollar, pitching Umrah packages outside the affordability levels for pilgrims from major markets such as Pakistan, Indonesia, Bangladesh, Turkey, Algeria and Uzbekistan.

The market has been subsequently adjusting and, as hotels reopen next season, prices were expected to drop. Sajil said last season prices were higher because only 15% of the Mecca hotels were open, pushing up the demand.

“In the next season, I expect prices to drop 10-15% because hotels will re-open (as more) rooms become available and room rates fall,” he said.

Salman was also optimistic about the next umrah season as Mecca had repeatedly shown its resilience.

“As travel restrictions are lifted, airports and hotels filled with people (wanting) to pray at the beloved house of Allah. I’m extremely confident next season will see a huge influx of travellers,” he said.

© SalaamGateway.com 2022. All Rights Reserved

Islamic Lifestyle
Indonesian Hajj travel agents scramble to adapt to new system

New Saudi online policy changing the way travellers acquire permissions.

 

Jakarta: Indonesian Hajj travel agents must adapt to Saudi Arabia’s new policy that enforces online booking for visiting Mecca, Syam Resfiadi, chairperson of the Indonesia Hajj and Umrah Travel Association (SAPUHI), said.

Resfiadi, who also owns Patuna Travel, told Salaam Gateway Saudi Arabia’s electronic system was forging ahead and all processes relating to Hajj applications will be done by non-face-to-face contact or phone.

This means the Indonesian government and travel agents must swiftly change their approach.

“Saudi has gone completely digital from contract payment for the hotel to catering, the bus and paying for tents in Mina and Arafah. Everything is done via an e-Hajj system and thereafter we print or save our e-visa through MoFA or Ministry of Foreign Affairs’ website,” he said.

This year Patuna sent 270 pilgrims on Hajj, including 20 officers and crew, who were initially scheduled for 2020 as part of a 550-pilgrim contingent. However, the global COVID-19 pandemic has halted Hajj for the last two years.

The figure was lower than 2019 pre-pandemic level of 417 pilgrims including 19 officers and crew.

According to Resfiadi, the Saudi government intentionally reduced the quota to test the reliability of the new online system and gradually implement it into a full online service system. He anticipates the kingdom will boost Hajj visitors to around 15 million in the future.

The fee rate has significantly increased due to higher rents in Mina and Arafah. In 2019 the fee was around $400, but is currently between $2,133 and $4,800 depending on the package services. Tent space has increased from 0.9m2 to 1.2m2.

“There is not too much difference from pre-pandemic (days), except there are now more new transit hotels around Mecca and improved the services in Mina and Arafah. We accommodate up to VIP tents in Mina and Arafah, costing up to $4,800 and the facility is on a par with a five-star hotel,” Resfiadi added.

 

Read - Major boost for umrah travel as market joins hands with tourism

 

Patuna has already received 4,000 Hajj bookings with Resfiadi indicating the company must remain updated on the current Hajj policies and systems as well as the kingdom’s projections for Hajj visitors to reach 15 million.

“We must be ready for their future plans and are waiting for them to reveal their updated vision and mission regarding Hajj activities. When the quota increases from the current 1 million pilgrims to 15 million, how will the tent be constructed? Will it be just a storeyed tent or storeyed building?” Resfiadi concluded.

© SalaamGateway.com 2022. All Rights Reserved

Islamic Finance
Wahed Inc. on course to secure $50 million Series B financing, preps digital banking platform

Islamic fintech firm is on course to secure financing through a consortium of investors to support its growth, which is expected to take its valuation to around $300 million.

 

London: New-York based Islamic fintech firm Wahed Inc. is on course to close $50 million in Series B financing with a consortium of investors to support its growth as well as the preparation of its digital banking platform in the UK.

 

Wa’ed Ventures, the venture capital arm at Saudi Aramco Entrepreneurship Center (Wa’ed) is leading the round with HSBC acting as the lead financial advisor. Other investors include French footballer Paul Pogba, who recently joined the Islamic economy start-up as a brand ambassador. Strategic family offices and institutions are also participating in this round.

Junaid Wahedna, CEO of Wahed, told Salaam Gateway that the fintech firm will have a valuation of approximately $300 million post financing. He said that this investment round will support the start-up’s current growth phase as well as preparation of its neobank, Niyah, on its platform in the UK later this year.

Launched in 2017, Wahed is considered one of the most successful Islamic economy start-ups. Its product portfolio includes its two ETFs in the US as well as halal workplace and pension portfolios for UK employees. The US-based platform has a presence in nine jurisdictions including operating licences in the US, UK and Malaysia.

In June 2020, it secured $25 million in a funding round led by the VC arm of Saudi Aramco. Wahed’s other shareholders include Cue Ball Capital, Dubai Cultiv8 and Rasameel. The Islamic fintech said that it has over 300,000 customers globally, as of June 2022.

Industry stakeholders said that Wahed’s financing is a positive sign of investor confidence, particularly in the current economic environment.

Ibrahim Khan, founding partner at IFG, a UK-based Islamic finance platform, said that Wahed’s Series B financing is a great validation for the Islamic fintech ecosystem as a whole.

“With the new cash I am excited to see what they [Wahed] build,” he said. “At this mature stage I would expect them to branch out into other interesting products to supplement their main offering and increase margins."

Wahed’s successful fundraising comes after a difficult start to the year.

In February, the US’ Securities and Exchange Commission (SEC) charged the Islamic investment platform for making misleading statements and breaching its fiduciary duty, and for compliance failures related to its Sharia advisory business from September 2018 through July 2019. Wahed agreed to a cease-and-desist order, paid a $300,000 penalty, and agreed to retain an independent compliance consultant among other undertakings.

Vladimir Malenko, Islamic finance advisor at Bedford Row Capital, said that Wahed’s ability to overcome the bad publicity and raise financing from investors is impressive.

“Some thought that they [Wahed] wouldn’t recover after that story with Sharia compliance,” he said. “It shows that the market has a very short memory, and a financially attractive project will find its investors, despite past transgressions.”

To improve corporate governance, Wahedna said Wahed established a risk and audit department headed by industry veteran Umer Suleman, and recently added Lori Richards, a former SEC director to its board.

© SalaamGateway.com 2022. All Rights Reserved

Islamic Finance
National Zakat Foundation of New Zealand launches to serve growing Muslim population

The move comes nearly a decade after the international organisation established a presence in Australia.

 

The National Zakat Foundation (NZF) has officially launched in New Zealand with the organisation anchored on providing an end-to-end service for the country’s growing Muslim community, specifically in respect of Islamic almsgiving, zakat.

Born out of the UK-based organisation, NZF New Zealand had a soft launch at the end of April and officially rolled out at the end of May. The organisation joins other NZF members in Australia, Canada, Switzerland and the Netherlands.

Ishrar Mohammed, CEO NZF New Zealand said the establishment of an NZF in the country was long overdue given NZF Australia was established almost a decade ago.

“Our mandate is the core mandate of all NZF member countries – to strengthen the third pillar of Islam in the local community,” he said.

This would be achieved through five key activities:

  • Raise awareness of zakat;

  • Provide education services focused on zakat;

  • Provide a comprehensive, localised zakat calculation service;

  • Provide a modern, efficient zakat collection service using the latest fintech solutions and

  • Distribute zakat locally with efficiency, transparency and dignity.

Mohammed said NZF New Zealand was live and accepting zakat payments and adaqah (voluntary act of charity) donations, as well as receiving zakat assistance applications.

“For zakat awareness and education, we are launching a social media campaign targeting both zakat payers and zakat receivers. We will also launch the ‘Are you in need or know someone in need?’ poster campaign; a highly successful campaign during the launches of NZF UK and NZF Australia,” he said.

The organisation is currently recruiting staff, both paid and volunteers, who will be trained in zakat calculation and assessment. In terms of providing a comprehensive localised zakat service, NZF New Zealand will collaborate with other NZF entities.

“We are working with colleagues at NZF Australia and NZF Worldwide to initially implement systems and processes developed over 10 years and tested in Europe, North America and Australia and then localising these to suit the New Zealand context,” said Mohammed, adding that localisation was a key goal for the first year.

Addressing Muslim needs

Muslims account for around 1% of New Zealand’s 5 million-strong population, with that figure expected to reach 3% by 2050, according to Pew Research. The growth will be driven by immigration, a young median age and higher fertility rate.

“Our demographics and community challenges are similar to our bigger neighbour, but on about one-tenth scale. We have an even mix of potential zakat payers and zakat receivers,” he said.

However, with an increase in asylum seeker and refugee intake, as well as a rising number of indigenous Muslims, pressure from zakat receivers will increase. Mohammed said zakat receivers were often overlooked in Organisation for Economic Co-operation and Development (OECD) countries.

As well as a spiritual obligation, it is important for zakat payers to have the right methodology of calculating and paying the correct amount.

“For the modern zakat payer, especially with those in OECD countries with the complex financial instruments and assets they may hold, they are often overlooked or incorrectly accounted for during zakat calculations,” he said.

Equally, it was vital to acknowledge the emerging needs of the zakat receiver.

“(The receiver) is completely overlooked in countries like Australia and New Zealand to the point that many in the community don’t think this person exists here,” he said, indicating the number of people relying on food banks and charity shops was increasing daily.

The Muslim community was not immune with Muslims disproportionately over-represented in those categorised as living in poverty.

In addition to mosques, NZF New Zealand will join local and national organisations like New Zealand Zakat Foundation, Kiwi Muslim Directory, Al-Ameen Islamic Development New Zealand and Al Manar Charitable Trust that collect and distribute zakat within the Muslim community.

Challenges

NZF New Zealand’s biggest challenge will be convincing the country’s Muslim community that a local zakat receiver exists, according to Mohammed.

“We are encouraged by Australia, UK, Canada, Netherlands and Switzerland where they faced (and overcome) similar challenges … There the debate is no longer about local zakat receiver, but rather what percentage of zakat should be spent locally versus abroad,” he said.

NZF New Zealand would work with Muslim and non-Muslim organisations to fulfil its activities.

“Capacity building in our community cannot be achieved by any one single organisation. We absolutely believe in cooperating with both Muslim and non-Muslim organisations across New Zealand,” Mohammed concluded.

© SalaamGateway.com 2022. All Rights Reserved


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