* Halal goods and services become global consumer segment
* Certification fragmented around the world
* Dubai mounts drive to profit from setting standards
* Leverages international trade, finance links
By Bernardo Vizcaino and Mirna Sleiman
DUBAI, Nov 20 From cosmetics to accommodation,
travel to toothpaste, complying with religious principles is
becoming big business in the Muslim world, and Dubai, better
known for flamboyance and unrestrained consumerism than Islamic
scholarship, sees an opportunity.
The emirate is mounting the world's first systematic drive
to profit from "halal" goods and services by setting global
standards for them and providing certification where the
standards are met.
In January Dubai's ruler, Sheikh Mohammed bin Rashid
al-Maktoum, announced plans to make the emirate a centre of the
"Islamic economy". Next week, Dubai will host a conference on
the subject that it is expected to attract over 2,000 officials,
businessmen and consumers from around the world.
It might sound like a hard sell for a city where alcohol and
bikinis loom large in the lives of some of its foreign residents
and millions of tourists who visit each year, but the emirate,
already the Gulf's top financial centre and a merchandise trade
hub, may have the business acumen and international connections
to pull it off.
In fact, it may succeed precisely because of its
cosmopolitan culture. Standards set in stricter countries such
as Saudi Arabia might struggle for acceptance in more liberal
societies such as Malaysia; Dubai may be best placed to take a
middle path acceptable to most of the world's 1.6 billion
"Dubai's economy hinges on its maintenance of coexistence
among faiths," said Jim Krane, a fellow at Rice University's
Baker Institute for Public Policy in the United States, and
author of "City of Gold: Dubai and the Dream of Capitalism".
"That makes Dubai an ideal testing ground for halal
standards. If halal standards are too restrictive and impinge on
social freedoms, they might hurt business."
A decade ago the term "halal", an Arabic word meaning
"permissible", was applied mostly to the food eaten by Muslims.
Increasingly it is also being used to describe a range of
products and services, including high fashion, toiletries,
medicine, hotels and tourism, entertainment and education.
Halal toothpaste and medical products do not include alcohol
or animal derivatives from banned sources, such as pigs, or
cattle slaughtered in an improper way. Halal fashion means
clothes that are both modest and trendy.
For women crowded round a counter in a glitzy Dubai mall,
one nail varnish had the appeal of being "breathable", letting
moisture and oxygen pass through, so the wearer could properly
wash as required before prayers.
"I've been waiting for such a product for so long," said Mai
Elsakhawy, an Egyptian resident of Dubai in her early 30s. "I
can now wear my nail polish without violating my religious
beliefs and affecting my prayers."
Some of the growing emphasis on halal products may be due to
increased piety in parts of the Muslim world. For some people it
has become a consumer trend, encouraged by companies advertising
new products to stimulate demand.
Nobody knows how much of the Muslim world's spending will
become halal, but a report to be released next week by Thomson
Reuters and DinarStandard, a New York advisory firm that focuses
on emerging Muslim markets, estimates Muslim consumer spending
on food and lifestyles totalled $1.62 trillion in 2012.
"The real development that is happening now, and which is
the big opportunity, is that halal is now a lifestyle segment,"
said Rafi-uddin Shikoh, chief executive of DinarStandard.
"The underlying business proposition is a large customer
segment that is increasingly making purchasing decisions that
include, among other attributes, Islamic principles."
With a population of 2.2 million and a limited manufacturing
base, Dubai cannot hope to make the bulk of halal products
itself. So it is developing design and accreditation standards
for them, hoping that the standards will become used globally.
If that happens, Dubai's economy may benefit as
multinational firms serving Muslim markets base research and
marketing operations in the emirate. This could in turn prompt
them to raise money in Dubai's Islamic capital markets.
"Dubai, and for that matter any centre that is focusing on
the developing halal market, will see various economic and
financial by-products," said Shikoh.
Currently, halal certification for food and other products
is fragmented around the world, with companies seeking separate
approvals in the individual markets they deal with.
Dubai aims to operate a globally accepted certification
process that would be easier and cheaper. The emirate's
government plans to open an international laboratory and
accreditation centre in the first quarter of next year.
"Manufacturers, producers and certification bodies should
have a proper financial solution," said Amina Ahmed Mohammed,
director of the accreditation department in Dubai's city
"Our prime objective is with UAE (United Arab Emirates)
companies, but our accreditation is international - it can be
used anywhere else."
Mohammed said Dubai was talking to other accreditation
bodies around the world in an effort to create a commonly
recognised halal label that could be attached to products. The
emirate will offer to train personnel conducting Islamic
certification and quality testing in other countries.
Among service industries, Dubai may have an advantage in its
tourism industry, which is already the Gulf's most vibrant. In
the last few years, some hotels have begun marketing themselves
as halal. This can mean little more than alcohol-free premises,
but some hotels offer facilities such as women-only floors.
Dubai-based Hospitality Management Holdings, which runs 20
alcohol-free hotels across the Middle East, said they were
appealing to many non-Muslims who were looking for
family-friendly accommodation. About 50-60 percent of its
customers in Dubai are non-Muslims, the company said.
Other areas in which Dubai aims to court Islamic business
include halal industrial parks - communities of halal-oriented
businesses that have already been developed in Malaysia.
It also hopes to develop a set of standards for halal
corporate governance, covering issues such as information
disclosure. It is believed to be one of the first times that a
government is trying to formalise Islamic guidelines for the
behaviour of corporations other than banks and insurers.
Krane said Muslims around the world would take some
convincing that a "certified halal in Dubai" label was
legitimate, but noted the emirate's strong business record.
"This is not a niche like diamonds or beach volleyball. It
is a sensitive task that affects more than a billion Muslims
around the world," he said.
"However, Dubai is good at selling things. It sold houses
while their building sites were in the open sea. If anyone can
mount a convincing sales campaign, it is Dubai."