Indonesia pushes for Halal Value Chain among D-8 economies

Jakarta: World's largest Muslim-majority country, Indonesia, called on its fellow Developing-8 or D-8 members to establish a halal value chain ecosystem to boost the bloc's growth.

President Prabowo Subianto spoke before leaders of the D-8 grouping which originally brought together Bangladesh, Egypt, Indonesia, Iran, Malaysia, Nigeria, Pakistan, and Turkiye in Cairo. Azerbaijan officially joined as a new member at the Egypt summit. All these countries have a sizable Muslim population. Aside from pushing for a better implementation of the intra-group trade pact, Indonesia wants to see the D-8 build its value chain of goods permissible by Islamic law.

"We must create a halal value chain through a strengthened D-8 halal economic network," Prabowo told the D-8 Summit.

According to Prabowo, the D-8 countries are forecast to crack the top 25 of the world's largest economies by 2050 -- based on PricewaterhouseCoopers estimates. The retired army general also claimed that the D-8 was the world's third-largest economic bloc with a combined gross domestic product (GDP) of $4.8 trillion as of 2023.

"D-8 must deepen its economic integration and cooperation. ... We must effectively implement the preferential trade agreement between us. We must establish streamlined and simplified customs procedures within intra-D-8 trade," Prabowo said.

The D-8 already has a preferential trade agreement in place, although its tariff reductions are not that significant. Indonesia ratified the trade pact back in 2011. Jakarta is currently eyeing a bilateral trade pact with Cairo.

Indonesia boasts the world's largest domestic halal market, according to the 2021/2022 Indonesia Halal Markets Report. The country's domestic spending across halal economy products and services amounted to $184 billion in 2020, potentially reaching $281.6 billion by 2025. Indonesia is home to 229.6 million Muslims as of 2020.

All D-8 members are part of the Organization of Islamic Cooperation (OIC). The report put Indonesia among the top global suppliers of halal goods to OIC members in 2020. Indonesia's OIC-bound halal products export reached $8.6 billion that year. The figures already include products that are halal by nature such as vegetables. D-8 members Malaysia, Pakistan, Egypt, and Bangladesh were among the top markets for Indonesian halal products, the report revealed.