LPS Urges ASEAN Halal Recognition to Boost Regional Competitiveness

ASEAN should at least have halal recognition, so that if a product has obtained halal certification in one member country, it should not need to undergo halal testing again when entering another ASEAN country, said Anggito Abimanyu, Chairman of the Board of Commissioners of the Indonesia Deposit Insurance Corporation (LPS). According to Anggito, there are still barriers to the trade of halal products among ASEAN countries because halal certificates issued in one country are not automatically recognised by another. As a result, businesses still have to undergo re-certification processes when marketing their products to destination countries. He assessed that this re-certification mechanism actually increases costs, lengthens product marketing time, and ultimately reduces the region’s trade competitiveness. He noted that several halal certification bodies in ASEAN countries, such as Singapore, Malaysia, and Thailand, have also voiced similar complaints. Products that have obtained halal certification in their country of origin still have to go through a verification process again when entering the Indonesian market, except for countries that already have a Mutual Recognition Agreement (MRA) scheme. Therefore, he encouraged the government to take the initiative in building a regional halal certification recognition framework. With such a system, the export and import process of halal products is expected to become more efficient without reducing the guarantee of product halalness. In addition to encouraging regional cooperation, Abimanyu assessed that Indonesia still has domestic homework to strengthen the halal ecosystem. He noted that only about 30 percent of products circulating in the market currently have halal certification. He stated that while the potential of the domestic halal market is known to be among the highest in the world, the economic benefits for Indonesia are relatively low, creating a paradox. Strengthening certification governance, simplifying processes, digitalising services, and enhancing international cooperation are important steps for Indonesia to not only be the largest halal market but also to develop into a major exporter of halal products in the global market.