The world’s Muslim population, 15 percent of which lives in sub-Saharan Africa, is expected to grow about twice as fast as the non-Muslim population by 2030, the Pew Research Center’s Forum on Religion & Public Life predicted in 2010.
That means 1.6 billion Muslims in 2012 could grow to 2.2 billion by 2030 — a 26.4 percent increase.
Sixty percent of Muslims live in Asia, 20 percent in the Middle East and North Africa, 2.4 percent in Europe and 0.3 percent in the Americas. This clearly indicates that the Muslim population is an important part of the world economy, according to a report by university lecturer Ali Rama in the JakartaPost.
From a marketing perspective, large populations have large potential. The Muslim population tends to be an exclusive segmented market for certain industries such as Islamic banking and finance, which have showed a significant increase worldwide, according to Rama. The Islamic banking industry has expanded globally to countries with smaller Muslim populations, such as the U.K., Germany and the U.S.
In 2013, Dubai’s government announced plans to turn the emirate into a center for an Islamic economy, management, trade, food preparation and certification, fashion, education and tourism, DailyTimes reports. Falling under the umbrella of the Islamic economy were sharia-compliant businesses ranging from banking to asset management to tourism,trade, food preparation and certification, fashion and education.
This looked like good news for Islamic banks in the United Arab Emirates, and over the past 18 months, some have appeared to benefit, the DailyTimes reported. But others have not, underlining the sometimes unpredictable consequences of government efforts to develop Islamic finance in the Gulf.
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What exactly is the Islamic economy? Perhaps it’s better to say what it’s not, Rama said in the JakartaPost. For example it’s not just another name for Islamic finance. It encompasses “all sectors driven by the Muslim population’s adherence to some form of faith-based activity that has a market impact.”
Islamic economy refers to economic activities driven by the Islamic lifestyle, consumer behavior, business practices in accordance with sharia principles and one that has market value,” Rama reports.
A 2013 Thomson Reuters report on the state of the global Islamic economy defined it as economic sectors driven by the Islamic lifestyle in accordance with sharia principles.
The report classified Islamic economy in several sectors, namely finance and banking, food, family friendly travel, fashion and clothing, cosmetics and personal care, pharmaceuticals, media and recreation.
Globally, Muslims spent an estimated $224 billion on shoes and clothing in 2012, representing 10.6 percent of global expenditure, according to JakartaPost.
Tourism spending was estimated at $137 billion in 2012 (excluding the haj and minor pilgrimage) — 12.5 percent of world spending. “However, the opportunity of the Islamic economy is not just about the needs and preferences of Muslims, but could be transcending the religion’s boundaries for all consumers who seek ethical trade and a wholesome experience,” Rama said.
“The potential consumer of the Islamic economy is not limited to Muslims, but also extends to those outside the Islamic faith who share similar values. As such, the Islamic economy transcends geographic, cultural and even religious boundaries, and is emerging as a new economic paradigm that is likely to have a significant global impact over the next decade,” Rama said.