Using blockchain technology boosts halal export competitiveness

Micro, small and medium enterprises (MSMEs) are urged to utilize blockchain technologies to enhance halal export competitiveness in line with the country’s bid to become a respectable player in the global halal market.

In a webinar, Department of Trade and Industry (DTI) Undersecretary Abdulgani Macatoman considered blockchain a “good solution” in providing reliable data and increasing trust in the halal supply chains as it yields transparency and traceability.

“This increases the seamless and efficient halal process from farm to plate. It improves sustainability of the halal supply chains and increases consumers’ confidence in the halal brands, global recognition of the halal products,” he said.

Macatoman said halal blockchain technology thus provides “clear advantage” to manufacturers, retailers, logistic service providers, distributors and halal certification bodies to establish trust and authenticity.

“With the increasing demand on halal food, it opens a floodgate of business opportunities to our MSMEs thereby contributing to the Philippines halal exports,” he added,

IBM defined blockchain as a shared, immutable ledger that records transactions and tracks assets in a business network. Virtually anything of value can be tracked and traded on blockchain networks, reducing risks and cutting costs.

A blockchain network can track orders, payments, accounts, production, among others. As members share a single view of the truth, they can see all details of a transaction end-to-end, giving them greater confidence as well as new efficiencies and opportunities.

Dr. Marco Tieman, a professor at Help University in Malaysia, said halal is moving away from a product approach towards a supply chain and value chain approach, which is complex to manage without a halal ecosystem.

“Blockchain technology can support a transition from a product approach towards a halal supply chain and halal value chain,” he said.

Tieman cited a research project showing that the combination of the distributed ledger technology with smart contracts have the potential to create high performance halal networks.

Leah Alejandro, chief of Halal section at DTI-Export Marketing Bureau, asked the MSMEs to take advantage of the opportunities offered by the new wave of technological advancement in the global halal market, with halal food alone valued at about US$1.93 trillion by 2022.

“There are still modest fashion, halal cosmetics and pharmaceuticals, halal travel and logistics, halal media and recreation and of course Islamic finance which alone is worth US$5.22 trillion. So, there is really no dearth in opportunities in the export trade but we have to be prepared to take on the demands and standards expected by the global market,” she said.

Alejandro said blockchain technology is expected to enable the country to improve its integrity and enhance competitiveness in the area of digital claims to excellence.

“For businesses, how to identify and keep track of everything that gives value and still achieve new efficiencies and increased productivity,” she added. “(In) exporting halal certified products and services, as with certified organic or in Kosher, we need to prove
that our standards are at par with acceptable international standards. We need to build trust, something very challenging to do since we are still very young, almost a baby in the certified world.”

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