The top 10 stories this year that will continue to impact the Islamic economy in 2021
The year 2020 was dominated by the COVID-19 pandemic and its impacts on our lives but other issues also grabbed the global Islamic economy’s attention. Here’s our pick of 10 stories and issues of significance for the Islamic economy and Islamic countries, and that we expect will continue to make an impact in 2021.
1. Food security
This year, global supply chains were disrupted due to COVID-19 pandemic lockdowns and other restrictions. As a result, many consumers found themselves staring at empty supermarket shelves as panic buying outstripped deliveries.
Food security has long been an issue for countries of the Organisation of Islamic Cooperation (OIC) but this year really set off alarm bells because OIC countries import most of their foods. The COVID-19 pandemic laid bare the countries’ vulnerability to disruptions in foreign food supplies.
We saw notable moves in countries such as the UAE and Saudi Arabia to safeguard not just mid-term food supplies but also to take better control of their long-term food security.
RELATED STORIES:
- UAE agri-tech growing with new multi-million dollar fundings for smart farms
- Salmon farming, and aquaculture, in the UAE is about to get a lot bigger
- Abu Dhabi turns to poultry, fish farms for food security
- Sector-wide measures in Bangladesh’s agriculture for lasting food security
- Nigerian agriculture ministry pledges to ensure food security
- Saudi Arabia boosts food security by setting up National Grains Company
- UAE buys 4,500 dairy cows from Uruguay as part of food security efforts
- How can Malaysia achieve halal food security and self-sufficiency? One expert submits her plan
2. Muslim mental health
The COVID-19 virus created chaos, panic, and anxieties amid a lot of uncertainties for everyone this year. Lockdowns and social distancing measures kept families and friends apart, and many were isolated. As the months wore on, not all businesses could continue to operate and this took a toll on employment and household incomes.
The issue of mental health came to the fore this year. For Muslims, this year really impacted how we worship as a community and tested our patience and resilience as mosques, Ramadan, two Eids, hajj and umrah were all affected.
RELATED STORIES:
- Muslim mental wellness: Retain core religious values to get through Ramadan in lockdown, say health professionals
- COVID-19 impact ‘will take years to process’: Mental health challenges surge for British Muslims
- When lockdowns merge physical spaces at home, the Islamic worldview of Unity could ease your stress
- In Germany, a Muslim pastoral phone service is handling a spike in calls since COVID-19 lockdown
3. Virtual Islam
Nikah by skype, online Ramadan iftaars, Eid by Zoom, and virtual halal audits. As we were kept physically apart this year, more and more of our activities went online as the pandemic showed no signs of slowing down in many countries.
Will this be a ‘new normal’, as a lot of us become accustomed to an increasingly digital life?
RELATED STORIES
- In 2020 as more of life went online, we ask: What are the limits to Virtual Islam?
- Nikah by Skype: Coronavirus no match for love, or Malaysian religious authorities
- Virtual halal audits during COVID-19 on ‘case-by-case basis’, says IFANCA
4. E-commerce
The pandemic boosted e-commerce big-time this year as physical shops were shuttered during periods of lockdown or other restrictions. This is one development most people see continuing as a ‘new normal’.
RELATED STORIES
- E-commerce, digital payments set for major growth in 2021 across MENAP region
- Government study projects 50% growth in e-commerce in Egypt amid COVID-19
- E-commerce sees hefty growth in 2020 Bangladesh
- Turkey expects new records in e-commerce
- B2B e-commerce start-ups biggest VC funding winners in Pakistan H1 2020 - study
- Key takeaways from Nestle’s first-half: Significant shift to e-commerce, at-home consumption
5. Halal pharma
Thanks to the race for a vaccine against COVID-19, solutions were developed and rushed to market by the fourth quarter of 2020. Through it all, we kept wondering if there would be a halal COVID-19 vaccine. The interest in this issue spilled over into a bigger awareness about halal pharma.
The halal pharma industry is still nascent. Universally accepted halal standards are not yet in place, although the OIC regulatory body, SMIIC, is working towards them. SMIIC only established a technical committee on halal pharmaceuticals (TC 16) in 2019.
RELATED STORIES
- Halal but not halal-certified? Key concerns about approved COVID-19 vaccines
- Malaysia’s MYEG inks deal with Chinese pharma firm for Phase 3 COVID-19 vaccine trials, JAKIM halal certification
- Indonesia’s BPJPH could issue halal certificate for Sinovac COVID-19 vaccine one week following MUI fatwa
- Will there be a halal COVID-19 vaccine?
6. Bank mergers
Mergers among banks in the GCC have been picking up pace in the last couple of years but this year saw the biggest one. Saudi Arabia’s National Commercial Bank and Samba Financial Group agreed to merge in October, creating an institution with 837 billion riyals ($223 billion) in assets.
The other big merger is over in Indonesia, involving Bank Mandiri, Bank Negara Indonesia and Bank Rakyat Indonesia. The three-way merger of the state-owned banks will form a $15 billion Islamic bank.
The impacts of these two significant mergers will no doubt start to be felt in 2021.
RELATED STORIES
- Indonesia’s three-way merged Islamic bank to start operations in February 2021
- Indonesia’s BCA to merge Islamic unit with Rabobank post-acquisition
- Kuwait Finance House postpones AUB acquisition deal process due to COVID-19 disruptions
- Bank of Bahrain and Kuwait acquisition of Ithmaar takes a step forward
- Oman’s Alizz Islamic Bank board greenlights merger with Oman Arab Bank
7. Plant-based alternatives
Plant-based meat alternatives have grown rapidly in the last few years as more consumers choose to reduce their meat consumption. In 2019, the global plant-based meat sector’s retail sales hit $18.6 billion and is forecast to grow at an annual rate of 6.7% through 2024, according to Euromonitor International.
What’s been interesting about this sector is its spread in the Middle East, especially in the UAE, and that manufacturers are choosing to get halal certification. This is one sector that is certain to keep on growing in 2021.
RELATED STORIES
- Brazilian vegan start-up Fazenda Futuro waits for halal certification, eyes global expansion
- UAE plant-based foods strike new ground with local production and voluntary halal certification
- Many untapped opportunities for halal in diversification of plant-based alternatives, say analysts
- OPINION: For plant-based nutrition, the time is now and it must be locally driven
8. UAE and Israel
In August, UAE and Israel announced they had normalised ties, sending ripples throughout the Middle East. The first announcement was followed up with a cascade of agreements signed in all sorts of sectors, including finance, tech, and travel. UAE has opened the door for other Arab countries to consider their ties with Israel and we will probably see more on this topic in 2021.
RELATED STORIES
- Abu Dhabi hotels have been asked to provide kosher F&B. What does this mean?
- Morocco agrees to normalize ties with Israel
- Partnership created to develop tech investment ties between Gulf region and Israel
- Abu Dhabi Islamic Bank signs MoU with Israel’s Bank Leumi
- Top Dubai, Israeli banks in cooperation talks after peace deal
- Bahraini-Israeli agreement to establish tourism-focused bilateral forum
- UAE and Bahrain first to benefit from Israeli tourism
9. Islamic fintech
For years, the Islamic finance industry has been talking up the potential of fintech and the opportunities for the sector. In 2020, the momentum really picked up and we’re actually very close to seeing a standalone Islamic digital bank. Hang on to your seats. 2021’s the year for this!
RELATED STORIES
- Malaysia’s MyMy sets out stall to become world’s first standalone central bank-licensed digital Islamic bank
- Wahed Invest acquires UK fintech Niyah, enters Islamic challenger bank race
10. Russia
There were numerous signs in the last few years and in 2020 we finally see Russia in Islamic finance in a sure and certain way. This development is most certainly one to watch for 2021.
Just yesterday, Dec 30, the Islamic Financial Services Board (IFSB) announced it has translated three of its standards into Russian “to cater to the increasing interest and recognition of Islamic finance among the Russian-speaking jurisdictions around the world.” IFSB says it will continue to translate its standards into Russian.
RELATED STORIES
- Russia’s biggest bank eyes Islamic finance as it opens Abu Dhabi office
- Russia’s Sberbank to set up office in Abu Dhabi, exploring opportunities with Mubadala including in Islamic finance
- IFSB publishes the Russian version of three IFSB standards
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