Source: Independent Observer

JAKARTA – Imagine a marketplace worth $2.29 trillion dollars and growing exponentially. That’s the power of the global halal economy in 2022, driven by 2 billion Muslim consumers worldwide. With projections showing the Muslim population reaching 2.2 billion people—or 26.4% of the world’s total population by 2030—the halal industry is no longer merely a religious phenomenon. It has become an economic powerhouse reshaping the global trade landscape.

At the heart of Southeast Asia, four nations—Indonesia, Malaysia, Thailand, and Singapore—are racing to become the world’s halal hub. What’s fascinating is how their strategies differ fundamentally based on their membership in the Organisation of Islamic Cooperation (OIC) and their demographic composition.

The OIC Powerhouses: Majority Muslim Advantage

Indonesia – The Sleeping Giant Awakens

Indonesia, home to the world’s largest Muslim population, possesses an undeniable demographic advantage. Since 1976, Indonesia’s halal journey began with labeling requirements for pork-containing products, evolving into a comprehensive certification system when the Indonesian Council of Ulama (MUI) issued the first halal certificate in 1994.

The turning point came in 2014 with the birth of Law No. 33, making halal certification mandatory. Authority then shifted to the Halal Product Assurance Organizing Agency (BPJPH) under the Ministry of Religious Affairs. This decision reflects the government’s commitment to leverage demographic potential as economic strength.

“Indonesia capitalizes on its demographic advantage by creating a massive internal market for halal products,” the policy analysis explains. The SIHALAL digital platform facilitates access, particularly for micro, small, and medium enterprises (MSMEs) that form the backbone of Indonesia’s halal industry.

However, the transition from voluntary to mandatory systems still faces challenges. Uneven implementation across the archipelago and limited MSME awareness remain key obstacles.

Malaysia – The Global Gold Standard

Malaysia launched its halal initiatives earlier, starting in 1965 through the Selangor Islamic Religious Department (JAIS). What distinguishes Malaysia is its systematic and consistent approach over decades. The Department of Islamic Development Malaysia (JAKIM) now serves as the internationally recognized central authority.

Malaysia’s strength lies in the MS1500 standard, which aligns with international food safety standards such as GHP, GMP, and HACCP. Malaysia’s halal certification has become a benchmark for countries like Japan, South Korea, and Brazil.

“Malaysia created a single, streamlined halal certification procedure, unlike Indonesia which still faces multi-agency bureaucratic complexity,” notes the comparative analysis.

Malaysia’s only weakness lies in the voluntary nature of certification, potentially reducing business incentives for adoption.

The Non-OIC Innovators: Excellence Through Limitation

Thailand – The Gastronomic Miracle

Thailand presents a fascinating paradox: a Buddhist-majority country that has successfully built a halal industry through gastronomic excellence. Islam is Thailand’s second-largest religion and receives constitutional protection.

Thailand’s halal certification began in 1948 with the establishment of Sheikhul Islam, and Thailand became a pioneer in halal logos, launching its first in 1971. Uniquely, halal certification is managed by a non-governmental organization—the Central Islamic Council of Thailand (CICOT)—supported by the legal framework of Law 340/1997.

“Thailand proves that non-Muslim countries can become key players in the global halal market through culinary innovation and strong institutional support,” the analysis states.

The Thai government supports halal industry growth through national budget allocations and specialized programs encouraging local business participation.

Singapore – Small but Mighty

Singapore, with a Muslim population of approximately 915,118, proves that size isn’t everything. The Islamic Religious Council of Singapore (MUIS), established in 1968, holds full authority over halal certification.

Singapore’s halal logo is internationally recognized by Brunei, Malaysia, Indonesia, and Gulf Cooperation Council (GCC) countries. MUIS collaborates with the Singapore Standards, Productivity and Innovation Board (SPRING) to develop halal standards.

Singapore’s strength lies in its strict legal penalties under the Administration of Muslim Law Act (AMLA), with fines up to SGD 10,000 and 12 months imprisonment for halal certification violations.

The Root of Differences: Why They Diverge

Demographics and Legitimacy: The Foundation Factor

OIC countries like Indonesia and Malaysia possess strong demographic legitimacy. Muslim majorities provide political and social support for ambitious halal policies. Governments position halal certification as a national priority because it directly relates to the needs of the majority population.

Conversely, Thailand and Singapore must balance Muslim minority needs with multicultural society realities. Their approaches are more cautious and inclusive, avoiding the appearance of favoring one religion.

Government vs. Civil Society: The Authority Question

OIC countries tend to integrate halal certification into formal government structures. Indonesia with BPJPH under the Ministry of Religious Affairs, Malaysia with JAKIM holding national authority.

Non-OIC countries rely more on semi-autonomous or non-governmental organizations. Thailand entrusts CICOT, while Singapore grants authority to MUIS as an autonomous body.

Market Orientation: Domestic vs. Export Focus

Indonesia, with its massive domestic market, can develop its halal industry from inside out. Mandatory certification makes sense because there’s massive internal demand.

Malaysia, Thailand, and Singapore are more export-oriented from the start, focusing on international standards and global recognition. The voluntary approach provides flexibility for businesses to choose their market segments.

The Lurking Weaknesses: Challenges Ahead

OIC Country Challenges

Indonesia still grapples with institutional transition. BPJPH lacks local presence in all regions, while society needs time to adapt to the new post-2014 system. Multi-agency bureaucratic complexity risks slowing certification processes.

Malaysia, despite having a mature system, faces growth limitations due to voluntary certification nature. Not all businesses are motivated to adopt halal certification.

Non-OIC Country Challenges

Thailand faces potential instability due to CICOT’s non-governmental status. Political changes or funding challenges could affect certification program continuity.

Singapore faces fierce competition with Indonesia, Malaysia, and Thailand. The voluntary nature of halal certification may reduce market awareness and industry penetration, especially among non-Muslim enterprises.

Lessons for the Future: Innovation Through Adversity

This comparison reveals that there’s no single formula for halal industry success. Each country develops strategies based on their demographic, political, and economic contexts.

OIC countries have legitimacy and domestic market advantages but must overcome bureaucratic and institutional transition challenges. Non-OIC countries excel in innovation and flexibility but are limited by domestic market size and political stability.

What’s most intriguing is how non-OIC countries like Thailand and Singapore prove that Muslim minorities can become catalysts for halal industry innovation. They rely on quality, international standards, and technological support to compete with Muslim-majority countries.

Conclusion: Collaboration Amidst Competition

This comparative analysis reveals that halal certification policies in Southeast Asia vary significantly depending on each country’s OIC membership, Muslim population, and institutional frameworks.

OIC member countries like Indonesia and Malaysia demonstrate stronger governmental involvement and solid institutional legitimacy in halal certification. Indonesia implements an ambitious mandatory system, while Malaysia maintains a globally recognized voluntary system.

On the other hand, Thailand and Singapore as non-OIC members with Muslim minority populations rely on voluntary certification led by non-governmental or semi-autonomous bodies, tailored to their multicultural and pluralistic societies.

Indonesia leverages its demographic advantage and regulatory reforms but faces operational challenges during the transition to BPJPH. Malaysia sets the global standard with a mature and centralized system, though its voluntary nature may limit further growth.

Thailand and Singapore, despite being constrained by smaller Muslim populations and limited state involvement, have innovated through institutional partnerships and digital solutions to maintain international halal credibility.

The future of Southeast Asia’s halal industry lies in regional cooperation—such as mutual recognition agreements and standard harmonization—that can support halal trade integration and enhance the global competitiveness of Southeast Asia’s halal ecosystem. Amid fierce competition, collaboration becomes the key to strengthening the region’s position as the world’s halal hub.

The halal industry is no longer just about religion, but about how countries with different backgrounds can innovate and collaborate in seizing trillion-dollar economic opportunities in the future.

REFERENCES:

Dabamona, S. A., Chompupor, P., & Ghuangpeng, S. (2025). We are ready for halal tourism, aren’t we? Exploring readiness of non-Muslim perspective in Thailand. Journal of Islamic Marketing, 16(5), 1410-1428.

Najla, N., & Fatwa, N. (2025). Halal Certification Policies in OIC and Non-OIC Countries: A Comparative Analysis of Indonesia, Malaysia, Thailand, And Singapore. International Journal of Islamic Business and Management Review, 5(1), 53-67.

Sudi, D. M. (2025). Bridging Regulatory Diversity: Halal Certification Frameworks in Indonesia, Malaysia, and Singapore and the Road to ASEAN Harmonisation. Milkiyah: Jurnal Hukum Ekonomi Syariah, 4(1), 15-27.

Susanto, A., Irfany, M. I., Camara, B., & Haq, D. A. (2025). The Impact of Socioeconomic and Behavioral Factors on Health Indicators in OIC Countries. AL-MUZARA’AH, 13(1), 27-46.