AS INVESTORS and companies steer a course through social and economic turmoil, it is understandable that they are cautious of new markets. But, despite the volatility of the Arab Spring, it would be a missed opportunity to ignore the Muslim world.
There are 1.8bn Muslims globally; the majority are spread across the 57 countries of the Organisation of Islamic Cooperation (OIC), along with substantial populations in India and China. Within the OIC, 40 per cent of the population is under the age of 25, and it is this demographic that is driving change and growth.
In its spirit of entrepreneurship, the Muslim world now resembles Latin America a few years ago. Start-ups are common. In Beirut, Cinemoz provides access to the Arab world’s largest online catalogue of films and TV shows. In Dubai, the news service Diwanee provides Arabic news for women.
Large multinationals have also made successful entries into the market. Microsoft has created an Egyptian outsourcing business, employing 65,000 people and generating more than $1bn (£618m) in annual revenues. McDonald’s has three times more customers in the Arab world than in the whole of Europe. However, many companies are still nervous about how they will be received by Muslim consumers.
But there are already strong links between the West and the Muslim world. Islamic finance is a $2.1 trillion global industry, and the halal industry is estimated to be worth over $500bn – with products produced in such diverse locations as Malaysia, Brazil and New Zealand.
There has never been such a great opportunity for trade between Muslim and non-Muslim countries. Muslim consumers mirror global consumer trends for social responsibility, integrity and transparency, offering businesses the chance to target multiple customer segments. Like in the West, young Muslim men and women also welcome new brands and companies. They appreciate being engaged by companies that earn their loyalty through local investment, empathy and courage.
Nevertheless, there are distinct challenges. As Western investors become increasingly risk-averse, foreign investment has slowed. Hurdles to overcome include the perception of corruption, government red tape, and furtive interests controlling business policy. The way to address these issues is through dialogue and a drive for more transparency.
Investors must also overcome bureaucracy, access to capital and the difficulty of developing talent. As stability returns to the Muslim world, investors that have already built relationships will gain most. This is one of the reasons why bringing Muslim and non-Muslim business people together, at events like the World Islamic Economic Forum, is so vital.
Collaboration in trade and investment will promote peaceful coexistence, as well as allowing both sides to mutually benefit. I hope that we are at the start of a promising, long-term partnership.
Tun Musa Hitam is the former deputy prime minister of Malaysia and chairman of the World Islamic Economic Forum.