Islamic Organization for Food Security (IOFS) notes that Russia has competitive advantage in terms of total halal production, including both meat and vegetable products.
MANAM /Bahrein/, 5 Nov. /TASS/. Russia may become a world leader in production and supply of halal products to Muslim countries, where food insecurity issues are growing. Such was the opinion expressed by Director General of IOFS Mr. Yerlan Baidaulet during his interview with TASS.
«I believe Russia may become a future leader of not only meat supplies (lamb, beef, poultry) but also vegetable products because Russia is advancing fast in mass technologies of GMO detection <….> Technological progress cannot be stopped, and it's extremely important to examine not only meat but also accumulation of harmful products in human body and their effects for future generations.”
Mr. Baidaulet added that halal market has certain specific requirements; a lot depends on standardization, certification and accreditation issues. According to the expert's opinion, Brazil and Australia are currently leading halal meat export to Muslim countries. Malaysia and Indonesia lead in terms of systemic halal market at the country scale. Russia's advantage, Baidaulet clarified, lays in all-inclusive approach to halal production, which should cover not only meat but also vegetable products.
According to the expert's opinion, 19 out of 57 member states of OIC are considered poorly developed with more than 64 million people in OIC countries starving. Moreover, issues of food insecurity in Muslim countries will only intensify in future.
«Muslim countries (member states of OIC) purchased $117 billion worth of food in 2018. Almost $67 billion out $117 is deficient. Such deficiency will only increase due to rapid demographic growth <…> That means systemic enhancement of food security is absolutely vital».
While commenting on food security, Mr. Baidaulet positively evaluated Russia’s project presented at the AAOIFI Conference. The project deals with grain supply to Muslim countries through Islamic trade bonds.
RUSSIAN PROJECT ON ISLAMIC TRADE BONDS
This is the first time Russian delegation took part at the AAOIFI Conference as a forum partner to present “Agro-financial Bridge” project developed by Institute of Law and Development of Higher School of Economics. The project aims to attract investments through sukuk Islamic trade bonds on grain supply, which could help to solve food insecurity issues in Muslim countries, and attract necessary funding to develop Russian agribusiness.
Sukuk salam means Islamic trade bond. Sukuk salam investors have a right to receive goods paid ahead of time in agreed manner in future, that is, without a subsequent change in the price of the goods.
In essence, this is an advance financing of deliveries. Moreover, under Russian law, commodity bonds are legal but currently poorly distributed in comparison with financial bonds.
Russian project has already been supported by Usmani sheikhs, who are reputable experts on Islamic finance and law. Earlier, they signed a memorandum with the HSE Institute for Law and Development - the Skolkovo Memorandum, therefore strengthening the intention to attract Islamic investment to Russia through the issuance of sukuk bonds and ensure supply of Russian grain to the Islamic world.
AAOIFI is an international non-commercial organization founded in 1991 in Bahrain. It develops sharia-compliant standards for accounting, audit, corporate management and ethics for global Islamic finance industry. This is 14th annual conference on Islamic banking and finance organized by AAOIFI and World Bank.
The conference was held under the auspices of the Central Bank of Bahrain in 3-4 November in Manama. Representatives of central banks, regulation organs, and financial institutions, experts on Islamic finance from Middle East, Africa, Asia, Europe and North America have taken part at the Conference.