The year 2020 was dominated by the COVID-19 pandemic and its impacts on our lives but other issues also grabbed the global Islamic economy’s attention. Here’s our pick of 10 stories and issues of significance for the Islamic economy and Islamic countries, and that we expect will continue to make an impact in 2021.
1. Food security
This year, global supply chains were disrupted due to COVID-19 pandemic lockdowns and other restrictions. As a result, many consumers found themselves staring at empty supermarket shelves as panic buying outstripped deliveries.
Food security has long been an issue for countries of the Organisation of Islamic Cooperation (OIC) but this year really set off alarm bells because OIC countries import most of their foods. The COVID-19 pandemic laid bare the countries’ vulnerability to disruptions in foreign food supplies.
We saw notable moves in countries such as the UAE and Saudi Arabia to safeguard not just mid-term food supplies but also to take better control of their long-term food security.
2. Muslim mental health
The COVID-19 virus created chaos, panic, and anxieties amid a lot of uncertainties for everyone this year. Lockdowns and social distancing measures kept families and friends apart, and many were isolated. As the months wore on, not all businesses could continue to operate and this took a toll on employment and household incomes.
The issue of mental health came to the fore this year. For Muslims, this year really impacted how we worship as a community and tested our patience and resilience as mosques, Ramadan, two Eids, hajj and umrah were all affected.
3. Virtual Islam
Nikah by skype, online Ramadan iftaars, Eid by Zoom, and virtual halal audits. As we were kept physically apart this year, more and more of our activities went online as the pandemic showed no signs of slowing down in many countries.
Will this be a ‘new normal’, as a lot of us become accustomed to an increasingly digital life?
The pandemic boosted e-commerce big-time this year as physical shops were shuttered during periods of lockdown or other restrictions. This is one development most people see continuing as a ‘new normal’.
5. Halal pharma
Thanks to the race for a vaccine against COVID-19, solutions were developed and rushed to market by the fourth quarter of 2020. Through it all, we kept wondering if there would be a halal COVID-19 vaccine. The interest in this issue spilled over into a bigger awareness about halal pharma.
The halal pharma industry is still nascent. Universally accepted halal standards are not yet in place, although the OIC regulatory body, SMIIC, is working towards them. SMIIC only established a technical committee on halal pharmaceuticals (TC 16) in 2019.
6. Bank mergers
Mergers among banks in the GCC have been picking up pace in the last couple of years but this year saw the biggest one. Saudi Arabia’s National Commercial Bank and Samba Financial Group agreed to merge in October, creating an institution with 837 billion riyals ($223 billion) in assets.
The other big merger is over in Indonesia, involving Bank Mandiri, Bank Negara Indonesia and Bank Rakyat Indonesia. The three-way merger of the state-owned banks will form a $15 billion Islamic bank.
The impacts of these two significant mergers will no doubt start to be felt in 2021.
7. Plant-based alternatives
Plant-based meat alternatives have grown rapidly in the last few years as more consumers choose to reduce their meat consumption. In 2019, the global plant-based meat sector’s retail sales hit $18.6 billion and is forecast to grow at an annual rate of 6.7% through 2024, according to Euromonitor International.
What’s been interesting about this sector is its spread in the Middle East, especially in the UAE, and that manufacturers are choosing to get halal certification. This is one sector that is certain to keep on growing in 2021.
8. UAE and Israel
In August, UAE and Israel announced they had normalised ties, sending ripples throughout the Middle East. The first announcement was followed up with a cascade of agreements signed in all sorts of sectors, including finance, tech, and travel. UAE has opened the door for other Arab countries to consider their ties with Israel and we will probably see more on this topic in 2021.
9. Islamic fintech
For years, the Islamic finance industry has been talking up the potential of fintech and the opportunities for the sector. In 2020, the momentum really picked up and we’re actually very close to seeing a standalone Islamic digital bank. Hang on to your seats. 2021’s the year for this!
There were numerous signs in the last few years and in 2020 we finally see Russia in Islamic finance in a sure and certain way. This development is most certainly one to watch for 2021.
Just yesterday, Dec 30, the Islamic Financial Services Board (IFSB) announced it has translated three of its standards into Russian “to cater to the increasing interest and recognition of Islamic finance among the Russian-speaking jurisdictions around the world.” IFSB says it will continue to translate its standards into Russian.
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