KUALA LUMPUR: The development of Malaysia's halal industry requires the integration of Islamic financial products and services as well as sectoral activities, said Deputy Finance Minister I Datuk Mohd Shahar Abdullah.

Mohd Shahar explained that sectoral activities included capital raising and the financial inclusion of micro, small and medium enterprises (MSMEs).

"The development of the halal industry also requires collaborative efforts to support innovation-led growth of Malaysia's halal industry and develop more homegrown halal champions, particularly among MSMEs," he said in his keynote address for the launch of the report - "Islamic Finance and the Development of Malaysia's Halal Economy" - today.

Despite the importance of developing the halal industry, Mohd Shahar pointed out that the industry continues to face several issues and challenges.

"Among challenges faced by the industry include the lack of capacity for innovation and research and development to produce high value-added products and services, as well as a lack of dynamism of domestic halal MSMEs to strengthen Malaysian halal brands and enhance product visibility," he said.

The deputy finance minister also emphasised that many MSMEs have not been fully integrated into the global halal supply chain as many do not have halal certification due to their inadequate capacity to obtain certification, expertise, network, and funding.

"Malaysia's local products have the potential to be marketed at the global level.

"This will require collaboration between the private and public sectors to help develop brand value and utilising new media technology such as social media to increase awareness and generate more interest in our local brands," he added.

Official statistics from the Halal Development Corporation showed that halal exports climbed 19.0 per cent to RM36.3 billion last year from RM30.5 billion in 2020, accounting for 2.9 per cent of Malaysia's overall exports.

"In terms of investments, our halal parks have attracted a cumulative total of RM16.1 billion since 2011 from both foreign and domestic players.

"A total of 295 companies are currently in operation throughout the 21 halal parks across Malaysia, with 42 companies being multinational corporations, while the remaining are locally owned corporations," he said.

-- BERNAMA