KL Summit concluded on a high note with conclusive agreements being reached and objectives being set by key countries between Malaysia, Turkey, Qatar, and Iran. We foresee areas that the business community should capitalize on, based on the outcomes of the KL Summit.
A total of 56 countries’ delegates also attended the KL Summit, although only these four countries participated in dialogues to present solutions plaguing the Muslim world.
Key Objectives Discussed At The KL Summit
– to increase inter-trade among Muslim countries
– to use gold dinar and cryptocurrency for trade among Muslim countries
– to implement food security among Muslim nations
– to improve science and technology research and collaboration between countries
Despite the absence of key Muslim countries, notably, Saudi Arabia, Pakistan and Indonesia, KL Summit achieved the objective of mutual collaborate between the key countries in areas of food security, defense technology, media collaboration as well as multilateral economic trade among the nations.
Necessity The Mother of Inventions
Or in this case, necessity lead to the cooperation between Muslim nations. The chief objective of hosting an international conference between governments is due to the pressing issues facing the Muslims, where Islamophobia is rampant in non-Muslim majority countries.
From the oppression of Palestinians to the genocide of Rohingyas by Myanmar, to sending the Muslim Uighurs to concentration camps in Xinjiang, China, to the recent crackdown in Kashmir. Muslim minorities in non-Muslim nations are labeled as extremists and terrorists, and their lives deemed worthless, and their lands and properties are seized.
Much of the world and the Muslim majority nations can do little to stop these atrocities, except for voicing out their concerns. Beyond that, not much else.
Why Muslim Nations Are Helpless To Help
The world depends on the United Nations for world peace. Any resolution raised at the United Nations will not be passed, even with the majority of countries voting for a particular resolution, if any of the five countries with veto power would vote against that resolution. The five permanent members of the United Nations Security Council are France, China, the United Kingdom, the United States, and Russia.
So it is no surprise if Palestinian oppression continues until today, given Israel’s allies in the Security Council which are the US, UK, and France. It’s also no surprise that China can continue with its treatment of the Uighur Muslims, or if Myanmar can get away with murdering tens of thousands of Rohingya Muslims.
An alternative for a nation to protest against countries that are committing large scale human rights violations against Muslims is either in the form of unilateral boycott, sanction or embargo.
Yet Muslim nations rarely go as far as creating trade sanctions or complete embargo. Except for a small nation of Malaysia, which has an embargo on Israel and has no diplomatic ties with her.
Nevertheless, all Muslim nations trade with the five-member nations of the Security Council, and much of their gross national income depend on trade with these major nations, as well as other members of the European Union. To declare a sanction against any of these major nations is akin to committing economic suicide.
Hence, currently, all legal avenues are closed for Muslim nations to help the plight of the oppressed Muslims.
To overcome the economic dominance of the West and China, which form the heart of the failure to help the oppressed Muslims, the key countries in the KL Summit agreed to cooperate and collaborate in key areas of food security, defense technology as well as multilateral economic trade among the nations. Their chief objectives are to:
1 – Increase Trade Among Muslim Countries
Withstanding an embargo and being self-reliant is a key factor for a country’s success and development. By developing bilateral and multilateral trade among Muslim countries, the economic impact of having economic sanctions imposed on the Muslim nations are lessened.
Iran, which has been subjected to numerous embargoes by the US, and Qatar, which has been subjected to embargoes by its neighboring nations. Despite the embargoes, these countries are economically stable, and Qatar, despite the embargoes imposed by her neighbors, is the eighth richest country in the world (based on GDP per capita).
By increasing trade among Muslim nations, this will lead reduce Muslim nation dependence for markets from the economic powerhouses (the West and China).
2 – Use of Gold Dinar And Crypto Currency As A Unified Trade Currency
Much of the world trade uses the US Dollar as the currency of exchange. This is dangerous, as in exposing one’s sovereignty to the influence of the US political power. The use of a fiat currency as a means of exchange also exposes the nation to currency speculation which has led to the devaluation of a nation’s currency.
To overcome this, the use of gold dinar was proposed to be the currency for trading between these nations. Gold-backed cryptocurrency is also being proposed to be used as the currency of exchange.
3 – Food Security
Muslim nations should have a sustainable food supply, there are numerous instances where people have to live with increasing food prices. This is largely due to relying too much on other nations for their means of survival: food. There are numerous instances where Malaysian have to cope with prices of basic foods such as rice, cooking oil even onions because of their over dependence on food imports.
Malaysia and other Muslim countries are urged to learn from Qatar in ensuring and preserving food sustainability despite economic embargo by its closest neighbors. The idea of food unity was mooted which include stockpiling food as preparation in cases of emergency environmentally or otherwise.
However, the food unity concept is suggested to be implemented under the framework of the Organisation of Islamic Cooperation (OIC).
4 – Science and Technology Research & Development
With the Industrial Revolution 4.0 on its way, Muslim countries must make serious efforts to invest and develop their technology. Muslim countries are urged to innovate their own technologies, instead of just relying on others for technology. Key areas of technology include defense-based technology, and other scientific areas, as well as artificial intelligence.
Opportunities Arising From The KL Summit
Many skeptics have shun the summit even before it commenced. It is like déjà vu, we have been here before. At the closing ceremony, the Sultan of Perak reminded the participants of the Summit that failure to translate the Summit aspirations into policies will result in this Summit being just another rhetoric. The Sultan of Perak also announced that the KL Summit will be rebranded as Perdana Dialogue, going forward.
The outcome of the KL Summit is that five agreements have been signed by five nations in the fields of food security, media collaboration, defense, science & technology research. A total of 18 instruments of exchanges for collaborations between countries were signed at the KL Summit.
While this form the basis for governments and industries collaboration, businesses in these countries should also look at providing solutions to achieve the goals set by the KL Summit 2019.
The Global Islamic Economy
The global Islamic economy or the global halal economy is estimated to worth USD2.2 trillion in 2018, according to Thomson Reuters report in cooperation with Dinar Standard, UAE. Essentially, it meant that Muslims around the world spent USD2.2 trillion on halal food, halal pharmaceutical, and Islamic lifestyle. Islamic financial assets are estimated to worth USD2.8 trillion in 2018.
The global Islamic economy grew 5.2% in 2018 and is expected to reach $3.2 trillion by 2024.
While the numbers are impressive, the real question remains.
How much of the global Islamic economy is actually realized from trades between Muslim nations?
Or is much of it being served by Western or Chinese multinational corporations (MNCs) with just halal certification?
How The Business Community Can Benefit
We foresee areas that the business community should capitalize on, based on the outcomes of the KL Summit.
1 – Media
Media Collaboration is one of the agreements reached at the KL Summit. The purpose is to combat Islamophobia by producing and disseminating narratives that foster a better understanding of Islam for non-Muslims.
Content creators and producers can create content narratives that would attract a real understanding of Islam for Muslims and non-Muslims alike.
For example, the Turkish hit series, Ressurection Ertugrul has global audiences and fans from Muslim and non-Muslim viewers. The series portrayed Ertuğrul, a historical Turkish hero and father of Osman who started the Ottoman empire, by portraying him as a hero based on Islamic principles.
Each country has its own version of Ertugrul heroes who have their roots and values firmly planted in Islam. The media, particularly the TV and film industry, in Muslim countries should seek to provide a Muslim narrative of historical events, as well as create interesting shows that would attract global audiences while portraying modern-day Muslims with Islamic values.
2 – Agriculture
Food security is high on the agenda at the KL Summit. Agriculture in Muslim countries needs a revolution. Centuries gone by farmers work the hardest but make the least money in the profit chain.
What is needed is a business that disrupts the status quo and empower farmers with bigger profit margins. It is now the industry norm that it takes seven players for food from the farm to reach the table, the end consumers.
While there are many marketplaces that have been built by startup and tech companies, none have really disrupted the industry by cutting out the middlemen in the food chain. What is needed is an agricultural tech disruptor that can cut down the number of middlemen in the food supply chain, and empower the farmers.
Water is a resource that is scarce in many countries. Technology that can optimize critical resources, such as saving water, or using fewer land while growing more plants, or plants that can grow in non-native environments, would be beneficial to the farming industry.
3 – Technology
It should not be a surprise that technology is high on the agenda. Muslim nations are totally dependent on Western and Chinese technology, whether in terms of hardware, software and even technology infrastructure.
Muslim businesses should look into creating their own indigenous platforms, and leverage on systems that can optimize resources.
For instance, much of the Muslim world are in the lower-income countries, and technological infrastructure are not as developed as the advanced countries. Internet penetration rates are still less than optimum for most of the Muslim countries.
Furthermore, consumers from lower-income countries have lower purchasing power, which leads to lower smartphone penetration rates in these countries.
Instead, most still use feature phones, and KaiOs is an operating system used by feature phones to access the internet and have smart device capabilities. Hence, Muslim businesses can leverage on these instead, to enable more Muslims from the lower-income countries to access the internet.
The KL Summit also raised an important objective, for Muslim countries to develop artificial intelligence (AI) that would further boost technology. Muslim businesses, especially in the fields of software development, should focus on these, and provide access to other businesses to use these AI technologies.
Opportunities for B2B fintech are aplenty. While most fintech focus on B2C applications, the real opportunities lie in B2B fintech creating ecosystems and solutions that would smoothen out cross-border trade payments. Even in this 21st century, much of cross-border trade still rely on Letters of Credit. Its now time for fintech to come up with solutions that can simplify and expedite cross-border trade payments, and be the enabler for the growth in trade in Muslim countries.
4 – Marketing and Branding
While Muslim countries can say that they should trade more with each other, ultimately the end-users, the consumers make the decision with their buying power.
The global Islamic economy is worth at least USD 2 trillion in 2018, encompassing halal food, halal pharmaceuticals, modest fashion and media for the Muslim consumers. However, if much of the market is served and dominated by Western and Chinese MNCs, then it is a sad waste for the Muslims overall.
Would Halal Oreo biscuits be preferred by Muslim consumers, or can Muslim brands create and compete with MNC brands, with its own version of Oreo’s?
Or would Muslim consumers prefer to purchase Nike burkinis (Muslima fully covered swimwear) and sports hijabs, or can Muslim brands be the preferred choice instead?
It’s not that Muslim companies can’t create better quality products than the MNCs, as sports hijabs, and burkinis are Muslim-created products, but can Muslim companies create their own brands that would be the preferred choice for Muslim consumers?
Muslim governments facilitate in these collaborations between Muslim nations by leveraging on platforms, such as the KL Summit, and the OIC. Ultimately, it is up to us, as Muslim consumers, and Muslim businesses to make the change and empower ourselves, as Muslims, and help each other.
“Indeed, Allah will not change the condition of a people until they change what is in themselves.” (Quran 13:11).