Malaysia Urges Cambodia to Harness the Potential of Halal Ecosystem

In a recent roundtable discussion, the Malaysia External Trade Development Corporation (Matrade) urged Cambodia to tap into the vast potential of its emerging halal ecosystem. With a growing global demand for halal products and services, Matrade believes that Cambodia stands to gain significantly by developing its halal industry. By doing so, the country could drive growth across various sectors, including tourism, agriculture, and construction, while positioning itself as a key player in the region. This initiative aligns with Cambodia’s broader economic goals, and the collaboration between Malaysia and Cambodia marks a pivotal step forward in advancing the halal sector in Southeast Asia.

Halal Ecosystem for Malaysia and Cambodia

Halal is no longer limited to just food products; it has evolved into a global market encompassing various industries, including pharmaceuticals, cosmetics, finance, and even tourism. The halal ecosystem, which revolves around adhering to Islamic dietary and ethical guidelines, is built on principles of purity, cleanliness, and ethical business practices. For non-Muslim-majority countries like Cambodia, developing a halal ecosystem offers opportunities to tap into a multi-billion-dollar market that extends beyond the Muslim community.

Malaysia, as a global leader in the halal industry, has taken the initiative to guide Cambodia in developing its halal infrastructure. The Halal Development Corporation (HDC) in Malaysia is playing a key role in this process, and its Head of Halal Advisory, Mohd Dhaliff Ghaus Mohd Anuar, emphasized the need for Cambodia to establish its halal roadmap. This tailored approach would allow Cambodia to craft a system that not only meets global standards but also takes into account its local context and strengths.

Malaysia’s halal ecosystem is well-established, having grown over nearly five decades. The country is recognized as a global hub for halal products and services, and its certification system is among the most stringent in the world. With its wealth of experience, Malaysia is well-positioned to assist Cambodia in building its halal industry. According to Anuar, this collaboration could serve as a model for other Southeast Asian nations seeking to grow their halal sectors.

Malaysia and Cambodia: Strengthening Bilateral Ties

The push for Cambodia to develop its halal ecosystem is part of a broader effort by Malaysia to strengthen bilateral ties with its Southeast Asian neighbors. Cambodia is strategically positioned in the region and has been making significant strides in its economic development. By partnering with Malaysia, Cambodia can leverage the latter’s expertise to boost its industries, especially those related to halal products and services.

During the discussion, Anuar noted that Cambodia’s halal journey is still in its early stages, but the country has several advantages that can help it catch up. One of the key strengths is its government-backed halal certification system, overseen by the Ministry of Commerce’s dedicated halal department. This system ensures that halal standards are met across various sectors, giving Cambodia a competitive edge in the global market.

Anuar pointed to the high global demand for halal products, which extends beyond the Muslim community. Many consumers, regardless of their religious background, associate halal with quality, ethical production, and safety. This presents an opportunity for Cambodia to attract a diverse range of consumers by offering halal-certified products and services.

The Potential for Growth in Cambodia’s Key Sectors

Cambodia’s growing halal ecosystem presents an opportunity for the country to enhance several key sectors, including tourism, agriculture, and construction. The tourism industry, in particular, stands to benefit from the rising number of Muslim travelers seeking halal-friendly destinations. As the Muslim middle class expands globally, more travelers are looking for destinations that cater to their dietary and religious needs.

Cambodia, with its rich cultural heritage and natural beauty, is well-positioned to attract Muslim tourists. However, to fully capitalize on this market, the country must invest in halal-certified hotels, restaurants, and tourism services. Anuar noted that Malaysia’s success in developing its halal tourism sector can serve as a model for Cambodia. By adopting similar strategies, Cambodia can increase its appeal to Muslim tourists and, in turn, boost its overall tourism revenue.

The agriculture sector also presents significant potential for growth through halal certification. Cambodia’s agricultural exports, particularly rice, and other staple crops could see increased demand if they are halal-certified. Halal certification not only assures consumers of the product’s compliance with Islamic dietary laws but also signifies adherence to ethical and environmental standards. Anuar emphasized that industries polluting water sources or violating animal welfare standards are ineligible for halal certification, underscoring the broader ethical implications of the halal ecosystem.

In the construction sector, halal principles could be applied to building materials and methods, ensuring that they meet ethical and environmental standards. This approach could enhance Cambodia’s reputation as a sustainable and ethical producer, attracting investors and consumers who prioritize ethical business practices.

Learning from Malaysia’s Halal Success Story

Malaysia’s halal ecosystem is one of the most advanced in the world, with a well-established certification system, financial support for halal businesses, and a thriving e-commerce sector that caters to halal consumers. Anuar highlighted several strategies that Cambodia could adopt to fast-track its halal industry’s growth.

First, Malaysia’s banks offer specialized financial products for businesses seeking halal certification. These products help companies transition to halal standards by providing access to funding and resources. Cambodian businesses could benefit from similar financial support, particularly from Malaysian banks that operate within the country. These banks could play a critical role in fostering Cambodia’s halal ecosystem by offering tailored financial products and services.

Second, Malaysia’s e-commerce platforms have made it easier for consumers to access halal products, both locally and internationally. Cambodia could develop its e-commerce infrastructure to cater to the growing demand for halal products. By creating online platforms that connect consumers with halal-certified businesses, Cambodia could significantly expand its reach in the global halal market.

The Challenges Cambodia Faces in the Halal Ecosystem

Despite the promising outlook, Cambodia faces several challenges in fully embracing the halal ecosystem. High energy and infrastructure costs, combined with a shortage of skilled workers, present significant hurdles. Developing a skilled workforce in the halal industry will be essential for Cambodia to meet the rigorous standards required for halal certification.

To overcome these challenges, Cambodia could invest in training programs and strategic partnerships with countries like Malaysia. Malaysia’s experience in building its halal sector can provide valuable insights into how Cambodia can address its infrastructure and workforce issues. Additionally, regional cooperation with other Southeast Asian nations could help Cambodia learn from its successes and avoid potential pitfalls.

Anuar mentioned that countries like Singapore, Thailand, Indonesia, and Brunei are all advancing their halal sectors. Cambodia has the opportunity to collaborate with these nations and benefit from shared knowledge and resources. Notably, Japan, despite having a minimal Muslim population, has successfully developed a thriving halal ecosystem, proving that non-Muslim-majority countries can benefit from this market.

Cambodia’s Vision for the Future

Cambodia has already taken important steps toward integrating halal standards into its broader economic development goals. The country aims to reach significant economic milestones by 2030 and 2050, and the halal ecosystem is expected to play a key role in achieving these targets. By continuing to focus on developing its halal industries, Cambodia can position itself as a leader in the global halal market, attracting investments, boosting exports, and fostering stronger ties with Malaysia and other countries.

Anuar praised Cambodia’s efforts to align its halal strategies with its national development goals, noting that the country’s business-friendly tax system and affordable labor force provide a strong foundation for growth. However, he also emphasized the importance of addressing challenges related to energy costs and infrastructure to ensure long-term success.

In conclusion, the collaboration between Malaysia and Cambodia on developing a halal ecosystem holds immense potential. By embracing the halal industry, Cambodia can unlock new growth opportunities, attract global attention, and position itself as a regional leader in halal products and services. With the support of Malaysia and other regional partners, Cambodia’s halal journey is just beginning, and its future looks bright.