The Global Islamic Economy Indicator (GIEI)

| 12 February, 2018 | General
The Global Islamic Economy Indicator (GIEI)

This article is an extract from the State of the Global Islamic Economy Report 2017/18.

The report can be downloaded from HERE.

The Global Islamic Economy Indicator (GIEI) is a composite weighted index intended to show the current state of Islamic Economy indicators across each of the Islamic Economy pillars that have been defined in this report series. The Indicator is not a ranking of current size and growth of each market, but evaluates the quality of the overall Islamic Economy ecosystem including social considerations each has relative to its size. The ranking of the index is weighted towards Islamic Finance and Halal Food given their relative sizes to other sectors.

Top countries

Malaysia leads the rankings again, supported by its Islamic Finance and Halal Food ecosystems, which to date remain unparalleled, followed by the UAE and Saudi Arabia. The constitution of the top 15 has not changed significantly from prior years, but notable movements include Saudi Arabia’s rise to third place, and Iran edging close to the top ten, currently ranked 12th, up from 14th last year.

METHODOLOGY SUMMARY

The following are key methodology highlights. The full methodology is presented in the Appendix.

- A total of 73 countries were evaluated that included 57 OIC and 16 non-OIC countries.

- To evaluate the health of the GIE ecosystem per country, each sector was evaluated based on the following key metric categories, which were equally weighted: 1) supply/demand drivers relative to country size, 2) governance, 3) awareness, and 4) social considerations. (The governance criteria did not apply to the Fashion, Media and Recreation sectors.) A total of 49 metrics was utilized.

- Each country’s development health was adjusted to its relative size of the total economy.

- The aggregate indicator and overall rank is weighted to each sector’s proportional economic size (Islamic Finance and Halal Food are weighted heavily in the ranking given their relative sizes: 46 percent and 35 percent respectively).

Following are the top 15 countries in the GIE indicator overall as well as for individual Islamic Economy sectors:

SGIE 2017-2018_Global Islamic Economy Indicator score

Malaysia

Malaysia once again leads the GIEI for the fifth year in a row, this year 60 points ahead of the UAE. This impressive lead reflects a robust Islamic Economy ecosystem, with Malaysia enjoying a substantial lead in Islamic Finance and Halal Food.

- Malaysia’s Islamic Finance ecosystem leads, despite Malaysia having fewer assets than Iran and Saudi Arabia, due to very strong awareness and governance credentials

- In Halal Food, Malaysia has resumed its leadership of the ranking, rising from fifth place in 2016, due primarily to a substantial increase in awareness of Halal Food.

United Arab Emirates (UAE)

The UAE maintains second place in the GIEI rankings, showing strong performance in the Islamic Finance indicator. It has also maintained first spot across all indicators, with the exception of Halal Food and Halal Travel, and Islamic Finance where Malaysia has performed exceptionally. The UAE’s efforts to lead the Islamic Economy globally is bearing fruit, with notable progress in  its launch of the International Halal Accreditation Forum.

Saudi Arabia

Saudi Arabia plays a significant role in the Islamic Economy, as a leading center for Islamic  Finance, with $473 billion in Islamic Finance assets, with total assets exceeded only by Iran. Saudi Arabia is also a hub for Halal Food, where it ranked as the 11th largest exporter of Food and Beverage to the OIC in 2016. While this ranking excludes Hajj and Umrah visitors, Saudi Arabia will undoubtedly become a key tourist destination, especially as it pursues economic diversification as part of its Vision 2030 strategy.

Bahrain

Bahrain has dropped to fourth place in GIEI rankings due to losing its top ten position in Modest Fashion. However, it has risen to second place in the Islamic Finance ratings, where total Islamic Finance assets increased by 50 percent to $82 billion, supported by a notable improvement in Islamic Finance governance.

Gulf Cooperation Council (GCC)

All GCC economies are in the top ten for overall rankings, illustrating their continued strong performance as Islamic Economy hubs, driven in particular by their strong performance in the Islamic Finance and Halal Food indicators.

Other countries in the top 15

Pakistan, Jordan and Indonesia occupy the sixth, ninth and tenth places, respectively. This is due to their relatively consistent performance in most indicators. Pakistan is positioned strongly to benefit from the China-backed “One Belt One Road” initiative that could see a substantial improvement in its Halal Food rankings, but the benefits have not been fully realized to date in this ranking. Overall, the top 15 have remained the same as last year, with Iran moving two places higher to 12th, and Singapore moving two places lower to 13th. Sudan and Indonesia have also moved one place lower to 14th and 11th respectively.

SGIE 2017-2018_Global Islamic Economy Indicator score

Read the full State of the Global Islamic Economy 2017/18 or visit GIEI Online Model 

State of the Global Islamic Economy 2017 Report_cover image

© Thomson Reuters 2017 All rights reserved

Read the full State of the Global Islamic Economy 2017/18 or visit GIEI Online Model.

Like 

MORE INTERESTING TOPICS