The UAE's New Halal Policy May Have a Major Impact on the Global Halal Economy

Since Dubai announced its ambition to become the capital of the global Halal economy last January, it is still unclear how it will achieve this goal. Plans are taking shape, and at this stage their indicators also suggest a possibility. Overall, the UAE's approach may be more beneficial to the global Halal economy and, by maximizing the influence of the UAE as a food-importing country - especially Dubai as a trade hub - could to some extent lead to greater dissemination of the new Halal standard worldwide.

Recently, the UAE's Halal program allows organizations such as the Emirates Authority for Standardization and Metrology (ESMA) to decide whether a product produced or imported into Dubai is Halal. The role of the UAE's new Halal program will be applied to a set of Halal standards developed by the UAE, reflecting imported goods of its country with a diverse population, including those Halal products destined for elsewhere in the world that are transshipped through Dubai's ports. The application of Halal food standards is important for transit goods, and Dubai's conditions are unique because its geographical location is at the center of many trade routes.

If a Halal product meets the national standard, it can be shipped (perhaps these countries have no national standard, or a standard different from the UAE's), and it can still reach its destination. But avoiding Dubai may raise costs and provide an economic incentive for producers to change in order to meet the UAE's standard. In addition, in the Halal logistics process, there is also a cascading effect around the world: whether there must be evidence proving the product's origin and that it was not contaminated during its stay in the UAE.

Dubai's central geographical location will make logistics providers more likely to invest in the required infrastructure, because they want to ship by sea through Dubai. Because customers usually do not understand the whole process before their food reaches the local store, the idea of Halal logistics will not become a big selling point. However, if producers must prove that their entire supply chain is Halal food, this stimulates them to require their logistics providers to demonstrate end-to-end traceability.

But on another level, the UAE's Halal program may affect the work of organizations such as the Standards and Metrology Institute within the Organisation of Islamic Cooperation and others developing a single Halal standard. As trade in Halal goods increases, especially the volume of freight through Dubai, following only one set of Halal food standards will put greater pressure on producers, because of the costs associated with applicability on both sides. If these costs increase to a certain point, they will increase pressure on their governments (or local Halal food standards and certification bodies) either to lower their national standards in support of the UAE's standard, or to push them to negotiate mutual recognition of Halal standards with the UAE's Halal program. Overall - developing local UAE infrastructure, requiring Halal certification for transshipment through Dubai, and encouraging other countries to adopt the UAE's standard - the new Halal policy has great potential influence on the Islamic economy.