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Economic and business potential of Muslim populations in Europe

Speakers
Professor Cedomir Nestorovic, ESSEC Business School

Date
23 Apr 2013

Venue
Level 13, ESSEC Asia-Pacific, Amphitheatre, 100 Victoria Street, National Library Building, Singapore 188064

Time
4.00 – 5.30pm

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Cedomir Nestorovic 

Prof Cedomir Nestorovic noted at the outset of his lecture on “Economic and business potential of Muslim populations in Europe” that there is a tendency to tackle political and social issues first and foremost when it comes to speaking of the Muslim population in Europe. Much of this has got to do with the perceptions portrayed by the media in certain European countries.

But speaking from the perspective of a professor from a Business School, the economic aspects are important, not least when the number of Muslims in Europe is around 44 million, or 6% of Europe’s total population. Two European states seeking EU membership, Albania and Kosovo, have Muslim majorities, while a third, Bosnia-Herzegovina, almost 50% of its citizens are Muslims. While the overall population of Europe is expected to decrease over the next few decades, the Muslim population in 2030 would have doubled since 1990.  When considering the business potential, besides demographic trends as noted above, one should also consider their purchasing power.

Prof Cedomir then zoomed in on two aspects of businesses targeted at Muslims – Islamic financing and the Halal food industry.

It might still be hard for the general public to conceive of Europe as a centre for Islamic finance. But Spain was an Islamic centre during the Moorish period, long before cities like Kuala Lumpur and Jakarta were established, and before Islam came to Southeast Asia. In fact Russia today – if one considers Russia part of Europe – that has the largest number of Muslim citizens, centred in the areas of metropolitan Moscow, the Northern Caucasus and the Tartarstan region. This, combined with a Muslim population that is growing in real and relative terms, presents business opportunities for entrepreneurs, Prof Nestorovic said.

Despite the extensive Muslim population in Europe, Islamic finance businesses can only be found in the UK, centred in the City of London, and not in any other European countries. This absence applies to France and Germany which have much larger Muslim populations than the UK.  It has been claimed that it is difficult to find at least 250,000 customers to make such a business viable. It may be hard to do so since the law in some European countries forbids the identification of citizens by ethnicity or religion, although there are creative and perfectly legal ways to conduct ‘market research’ here. But a more fundamental issue, as Prof Nestorovic pointed out, was that most European Muslims do not know or understand what Islamic finance is.

A point to bear in mind is the diversity within Europe’s Muslim population, not all of whom are attached to the same branch of Islam. Whereas most European Muslims are Sunnis, many in Germany are Shiites as they are of Iranian origin. Such differentiations of schools of thought in laws (madhabs) are highly relevant when it comes to the Halal food industry. The predominant player in the global Halal food industry comes from Malaysia which adheres to the Shafi school, but most Muslims in Europe – given their origins from the Indian subcontinent, Turkey and the Balkans – adhere to the Hanafi school. This signifies for potential entrepeuneurs, Muslims or not, business opportunity in the large but fragmented $66.6 million Halal food market in Europe.

During the ensuing question and answer session, a broad range of topics was raised by members of the audience, who were keen to learn more about the practice of zakat or compulsory alms-giving in Europe (and how it differed from Southeast Asia), to the Halal pharmaceutical industry.