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Become a Spectator in the Halal Industry

Indonesia is the country with the largest Muslim population in the world. Referring to 2010 BPS data, the Muslim population of Indonesia reached 207 million, or about 87%. With such a large Muslim population, Indonesia has a huge market potential for halal products.

The 2015-2016 report on the state of the global Islamic economy published by Thomson Reuters in collaboration with Standard Dinar indicated that Indonesia is the world's largest consumer of halal food products. Indonesian public spending on halal food reached 157 billion dollars in 2014. Turkey ranks second, with 109 billion dollars and Pakistan, 100 billion dollars.

Although Indonesia is the largest consumer of halal food in the world, Indonesia is still unable to become a major producer.

Indonesia is ranked 10th on the list of the world's largest halal food producers. Malaysia is ranked first.

With the largest Muslim population, the Indonesian government should be able to take advantage of this potential as state revenue. In addition, global economic income in 2014 reached $ 1.8 trillion in the food and lifestyle sectors. The revenue potential in this sector is expected to increase in 2020 to $ 2.6 trillion. At the same time, the revenues of the Islamic banking sector reached 1,350 billion dollars in 2014. This amount will increase in 2020, to reach 2,600 billion dollars.

Why is Indonesia so left out of the development of the halal food market, when it is the biggest consumer? Osmena Gunawan, Vice President of the Institute for Drug Evaluation and Food and the Indonesian Council of Scholars (LPPOM MUI), said that the high demand for Halal products worldwide was not supported by Indonesian government.

"It's not a lack of support, but support (edited by the government) MUI moves alone and our movements are limited," Osmena told a meeting at her office.

Unlike Indonesia, the Malaysian government gives its full support to the development of the halal industry. This allied country fully supports Halal products, both through its development, socialization and production. This has a positive impact on Malaysia's position as a champion of three halal product sectors, namely halal food, Islamic finance and halal travel. In the halal pharmaceutical and cosmetics industry, Malaysia ranks second in the world.

Osmena explained that Indonesian Halal products posed many challenges, including guidance, training and business support. Most of the MSME products in Indonesia are related activities or jobs. So it's not a proportional activity like a business.

"The side activities need to be supported and the commitment of the government, they are sometimes fun, but the results are good and the market potential is there because it needs the support of the government," said Osmena.

Osmena says the main problem for companies is that they do not fully understand the implementation of halal certification and its benefits for the future.

With regard to the halal certification of these MSMEs, Osmena believes that the fundamental problem is not the budget. Some areas, such as the DKI Jakarta UMKM service, have significant budgets for halal certification. However, the available budget absorbed only 20%.

At the same time, Siti Aminah, head of the Halal Products Branch at the Ministry of Religion, said government agencies were not agreeing on the issue of halal certification. "We have not yet joined the government, the Ministry of Religion wants to be legal, but the Ministry of Health does not want it," said Siti.