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Halal Products of Indonesia in ASEAN Economic Community: Brand Prospects

& Competitiveness

Conference Paper · October 2016

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INDONESIAN SCHOLARS JOURNAL –Paper Number (Will be replaced with volume and paper number if the
manuscript is accepted)

Halal Products of Indonesia in

ASEAN Economic Community:
Brand Prospects & Competitiveness
1
Al Afif Muzakir*, 2Randi Andiyana & 3Dzakwan Ina Ghandur
1
Undergraduate Students, Faculty of Economics, Universitas Riau
*[email protected]

Abstract. The current study aims to analyze strategy in developing Islamic business in Indonesia. As part of the effort
to develop halal Industry in Indonesia amidst rising competition within ASEAN economic community. Using time
series data during the last ten years, It will be compared with five competitors ASEAN countries that are also
producing and export halal products. The paper examines data of six potential products traded in the international
markets that are highly recommended as halal products. The paper finds that competitiveness pharmaceutical products
are high. Average revealed comparative advantage (RCA) on 4 and in 2014 more than 6. Animal, vegetable fats, and
oils, cleavage products, etc have higher competitiveness level and have good prospects in the future. Average revealed
comparative advantage (RCA) on 3. Therefore required several strategies, Indonesia with a large pool of resources,
the largest number of the Muslim population, has the advantage to make halal products as a leading marketing strategy
and develop a distinctive halal brand to serve the ASEAN market.

Keywords: ASEAN Economic Community; Brand; Competitiveness; Halal Products; Prospect

A. BACKGROUND to The Halal Food Information Center, production of halal

The commercial value and trade volumes of Halal products goods and services are controlled mostly by non-Muslim
globally have reached an encouraging scale. The niche sector is countries. The largest Halal food exporting countries are not
now developing rapidly in many parts of the world. As a dietary from Muslim countries, but Brazil and India, which at present
or lifestyle choice, halal has now been accepted as a universal rank as the No.1 and 2 leading Halal food exporters of the
concept. Halal products stand not solely for just and fair world with market shares of 10.7% and 9.0% respectively.
business but also a concern with safety, animal welfare, social Other foods exporting countries are the United States with
justice, and sustainable environment Nasir and Chiew [1]. The 4.9% share, China 4.6%, Thailand 4.4%, Australia 4.4%,
variation of halal products extends to all consumables, such France 4.2%, and Russia 3.9%. Indonesia and Malaysia, the
as food, toiletries, pharmaceutical, cosmetics and services major advocates in promoting Halal food to the world are
including finance, investments, and business Rahman [2]. ranked No. 21 and 23 as Halal food exporters with about 1%
However, the responsibility of any products to be declared as share of the world’s halal market.
Halal is the prerogative of respective government or any ASEAN Economic Community (AEC) is stepping stone to
organization authorized by the government. It might be different develop and strengthen the unified economy of South East
across different countries, as each country may have different Asia. The economic community is a strategy to enhance the
opinion or approach to certifying certain products are halal or capacity of each country and improve competitiveness level to
not Afifi et al [3]. win the global market. However, almost half of the 629
Interestingly, the effort to develop halal industry is not only million people living in the ASEAN region are Muslims. Within
happening in Muslim-majority countries, but also in countries the ten countries of ASEAN, three countries Brunei
with the diverse or multicultural population. It is taking place in Darussalam, Indonesia, and Malaysia have Muslim majorities,
all continents, starting from Asia, Africa, Europe and even and the remaining seven countries host Muslim minorities,
America. In ASEAN region itself, countries such as Malaysia, ranging from 0.1% in Vietnam to nearly 16% in Singapore.
Thailand, Indonesia, Singapore, and Philippines have their own Indonesia is a country with the largest Muslim population in
institutions that are in charge of Halal product certification ASEAN, namely 14% from 30% the amount of Muslim
ASEAN [4]. population in Southeast Asia. In terms of international trade
volume of the halal food market, Indonesia is one of the biggest
Furthermore, the main challenges in the international market
markets in the world after Africa. Thus, the challenges facing
are a competition that comes from large producers or exporters.
Indonesia in introducing halal brand do not only come from
The largest producers of halal goods and services are not
the domestic market but also in seizing the opportunity to
necessarily Muslim countries or manufacturers. In fact, the halal
increase trading sector in the international market. However,
market is no longer the domain of Muslim countries. According
all obstacles in producing halal products, such as low
INDONESIAN SCHOLARS JOURNAL –Paper Number (Will be replaced with volume and paper number if the
manuscript is accepted)

production, the standard of Halal certification, ability to et.al. [9]. Other researchers on the competitiveness of
compete, positioning and product development, as well as products are by Ragimun [10], Rifin [11], Shahzad [12], and
the level of demand for Indonesian products in destination on brand development and product design by Reguia [13],
countries. Besides, a recent study indicates that the attitude Ireland [14], Borzooei [15] and many others. However, these
towards Halal products is still behind that of Western brands. It researchers do not explain how to measure competitiveness,
also appears that if a Western brand falls into a category that the future prospects and potential of halal products in terms of
local brands can compete with, soon after the permissibility of measurement and kind of products. Furthermore, these
these Western brands will be questioned by its competitors, researchers are not particularly talking about halal products in
forcing them to search for a leverage to defend its position in Indonesia.
the Muslim markets Mukhtar and Butt [5]. With abundant resources that it owns, Indonesia will be able
Indonesia has a variety of halal products, especially due to to improve its ability and competitiveness in exploring the
its ethnic and cultural diversity that gave birth to a variety of potential of halal products. Thus, this paper will be a focus on
local products with unique characteristics. Among such strategy to build and develop an Indonesian brand of halal
products are local snacks, food, restaurant, batik, souvenirs, products by measuring six potential products for the
handicrafts, pharmaceutical products, and many others. Local international trade. Therefore, this research aims to contribute
products are also rich in designs, appearances, models, and to continuous improvement in the competitiveness of
patterns that put them at a high level among other similar Indonesian products to seize halal market opportunities and
products in South East Asia. become a leading brand in ASEAN.
The position of Indonesia as one of the key country in halal
products world trade has a big opportunity. It has experienced, B. METHODOLOGY
great Moslem population and variation of products. There are The data used in this research is secondary data consists of
five halal principles that should be fulfilled, based on Islamic time series data (time series) with the annual ten-year period of
value Tieman and Ghazali [6], as follows: First, physically and the year 2005 to 2014 for potential products that can be made
by content, the product should fulfill the halal requirement. advantage products of Indonesia. The type of data acquired
Secondly, the leaders of the company should consistent to the includes a data volume of export value. Secondary data used in
commitment for applying halal standards internally. Third, the this study comes ASEAN Statistics and International Trade
company should earn halal assurance on its production process Center (ITC), Ministry of Commerce and of the study of
that could be represented by the attainment of halal certification literature sourced from books and other literature in the library,
(in Indonesia, MUI’s halal certification could be used as a which is accessible by 2016.
reference). Fourth, yielded product has to meet specific
Analysis Methods Processed Data
qualification standard and safety, in Islamic term it called as
Revealed Comparative Advantage
toyyib, and fifth is all that related to financial aspect (pricing).
One of showing the indicators of changes in comparative
Pricing should free from riba, gharar (ambiguity), and maysir
advantage is a method of Revealed Comparative Advantage
(the drawing).
(RCA), RCA is an index used to measure the relative
Supporting halal products, the government has some
advantages and disadvantages of a particular commodity in a
regulation to motivate and keep the quality of products.
country which is reflected in the pattern of trade. This index
Government Bodies responsible for food controlling are
shows the ratio between the share of exports commodity or
Ministry of Agriculture for meat and animal based foods and
group of commodities to a country's export share of these
National Agency for Foods and Drugs Control (BPOM - Badan
commodities from around the world or in other words the RCA
Pengawas Obat dan Makanan) for food packaged product. In
index showed a comparative advantage or the export
Indonesia, protecting halal products by MUI (Majelis Ulama
competitiveness of a country in a commodity of the world. This
Indonesia / The Indonesian Council of Ulama) based on an
concept was first introduced by Ballasa in 1965, which
assessment done by LPPOM MUI (Lembaga Pengkajian Pangan,
considers that the comparative advantages of a country or can
Obat dan Kosmetika Majelis Ulama Indonesia – The
be seen reflected in its exports.
Assessment Institute for Foods, Drugs, and Cosmetics The
Systematically, RCA Index is as follows :
Indonesian Council of Ulama). The halal certification indicates that
the manufacturer of halal products complies with all procedures
𝑋𝑖𝑎/𝑡𝑜𝑡𝑎𝑙 𝑋𝑎
and requirements mandated by the authorized body. It is proven (1)
𝑋𝑖𝑤/ 𝑡𝑜𝑡𝑎𝑙 𝑋𝑤
that halal certification not only symbolizes the Islamic religion
but is also a suitable and practical standard system for all The export kind of products from Indonesia (Xia) will be
nations and not limited to Muslim consumers. divided with total products that export by Indonesia (total Xa).
There have been some recent studies on halal products and Then, It will be compared with Export kind of commodity in the
its development. Among such studies is Othman et.al. [7], Afifi world (Xiw) divided with total export of world (Xw).
[3], Kamarulzaman et.al. [8], Nasir and Chiew [1], and Bin
INDONESIAN SCHOLARS JOURNAL –Paper Number (Will be replaced with volume and paper number if the
manuscript is accepted)

Index of Trade Concentration C. RESULT AND DISCUSSION

In this case, to find out dependency of products Indonesia Prospect and Competitiveness of Halal Products Indonesia
with partnership country that's use Index of Trade Along the development, at meeting to 39 ASEAN Economic
Concentration (ITC). It is one of manner to know trade intensity Ministers (AEM) in 2007 year, the agreement about script
a country with another country. ASEAN Economic Community (AEC) Blueprint with Strategic
Thus, more vulnerable to the economic conditions of its Schedule including new initiatives and roadmap which clear to
trading partners. ITC is used to measure the Index of Trade achieve ASEAN Economic Community 2015. Furthermore, the
Concentration or Hirschman Index, the formula is as follows1 : head of state member of ASEAN releases Declaration on the
ASEAN Economic Community Blueprint in November 2007.
𝜒𝑖 2 ASEAN Economic Community Blueprint (AEC Blueprint)
𝐻𝑗 = √(∑ ) (2)
𝜒 framework for ASEAN transformation trough 4 (four pillar),
that is : (i) a single market and production base,(ii) a highly
Where x is value of product i’s exports and X value of total competitive economic region, (iii) a region of equitable
exports of country. This index is normalized so that its values economic development, and (iv) a region fully integrated into
range between 0 and 1. Values closer to one indicate more global economy” ASEAN Blue Print[16].
concentrated trade structures. It is generally assumed that lower Increasing competitiveness needs to be done, not least
export concentration reduces the impact of international trade Indonesia as one of the founding pioneers AEC. With the
risks due to the possible price fluctuations of specific products. improvement of competitiveness, will reduce trade transaction
costs and facilitate trade in AEC. Therefore, it is necessary to
Index of Specialization Trade identify how the competitiveness of Indonesia compared to
Thus, to know about any commodities, Indonesia prefer to neighboring countries as well as the factors that need to be
be exporters or importers. This research will use index of improved so that Indonesia has a high competitiveness
specialization product (ISP) with formula as follows 2: welcomed the implementation of the AEC which had begun at
[(Χi−Μi)] 𝐼𝑛𝑑
the end of 2015. Generally, economic of Indonesia still be able
(3) to growth above ASEAN of economic growth. ASEAN – 5
[(Χi+Μi)]𝐼𝑛𝑑
indicated that Economic of Indonesia condition capable of
Where X and M respectively export and import, and i and growth higher rather than each member countries. The
each is a kind of goods i and a state . Implicitly , this index Indonesia Economic growth ten last years average 5,8 percent,
consider the demand side and the supply side, where exports more than high from Philipines, Malaysia and Thailand still
identical to the domestic supply and imports are domestic
growth 5,4; 5,0; and 3,9 percent. However, If compare with
demand , or in accordance with international trade theory , the
theory net of surplus , as exports of goods occur when there is a Vietnam dan Singapore, the economic of Indonesia growth
surplus on goods in the domestic market . under 6,4 and 6,3 percent Niza[17].
The trend of Indonesia growth from 2001 – 2013 years
Analisis Forecasting Pola Trends significantly to show the stability of economic and positive than
Trends analysis is a method of statistics analysis are ASEAN countries member. The financial crisis of United state
intended to make an estimate or forecast to the future. To make even 2008 – 2009 years give influence for developing country
a good forecasting, it needs some information or enough data include Indonesia. The problem is able to look for solve with
and observation in time periods which relative of a long time.
With the result of analysis be able to know, how many fiscal policy and expansive policy. Thus, the stability of
fluctuations and the factors that influence those changes. In economic growth of Indonesia still stands positive Niza[17].
theoretical, The time series of analysis data. Something that The competition in AEC to show Indonesia has to ready with
most decisive is quality and accurate from the data, and also halal product challenges from every single country of ASEAN.
time or period from collected the data. If the data collected more Revamping in the production process, regulation, and
substantial, it will be better the estimation or forecasting which marketing of halal products to be important agenda for
is obtained and vice versa. In particular, the analysis of time
Indonesia to realize the strongest of competitiveness itself.
series with the least squares method can be divided into two
cases, namely the case of the data even and odd data cases.
Linear equation of time series analysis will follow:

𝑦 = 𝑎 + 𝑏𝑥 (4)

1 2
Introduction Trade of Research II:Trade Data and Statistics, Artnet Trade Policy Analysis and Development Agency of Indonesia, see more in
Capacity Building Workshop and Trade Research on 22-25 March 2005 http://www.kemendag.go.id/addon/isp/
prepared by Mia Mikic, Unescap.
INDONESIAN SCHOLARS JOURNAL –Paper Number (Will be replaced with volume and paper number if the
manuscript is accepted)

Table 2. RCA 6 Potential Halal Products of Indonesia

Non- Pharmace Essential
Tahun Dairy Soups Animal
alcohol utical oil
2005 1.16 0.21 4.15 0.62 0.16 3.09
2006 1.04 0.28 3.19 0.56 0.08 3.24
2007 0.91 0.27 3.54 0.59 0.04 3.35
2008 1.37 0.33 4.87 0.63 0.04 3.18
2009 1.39 0.27 4.16 0.58 0.04 3.29
2010 1.24 0.25 4.73 0.54 0.08 3.12
2011 0.99 0.43 4.77 0.49 0.13 3.79
2012 0.99 0.26 5.17 0.49 0.08 3.24
2013 0.98 0.27 5.64 0.48 0.22 3.55
2014 0.94 0.26 6.48 0.53 0.45 3.94
Figure 1 : Outlook economic growth ASEAN countries 2001-2013
Sources : CEIC, processed According to the analysis above, 2 potential of halal
Production of halal product of Indonesia has a big products which has competitiveness more than 1 are
opportunity in ASEAN market. Particularly at farming sector, it Pharmaceutical products, that is starting from RCA 4 in 2005
abounds natural resources in Indonesia. However, it still needs until 2014 RCA of Indonesia to reach 6. However, Indonesia
serious process to develop halal product and ready for competitors Country which have competitiveness higher than
competitiveness in international arena. In this research, there Indonesia is Singapore, the RCA above 37. Next followed by
are 6 potential products, such as Dairy products, eggs, honey, other countries in South-East Asia such as Malaysia, Thailand,
edible animal productnes, Non-alcoholic beverages (excl. Philippines which has the RCA under Indonesia. The next
water, fruit or vegetable juices and mi), Pharmaceutical products which have ability in competitiveness are Animal,
products, Essential oils, perfumes, cosmetics, toiletries, Soups, vegetable fats, and oils, cleavage products, etc with RCA above
broths & preparations thereof, Animal,vegetable fats and oils, 3. Besides that Malaysia only has capability to compete with
cleavage products, etc. It can provide the good benefit to RCA under 3. Furthermore Singapore, Thailand, and
increase halal products of Indonesia production in ASEAN. Philippines with RCA under 1.
Table 1. Export Halal Products Potential of Indonesia in
]

Tabel 3. 5 Countries with Strong RCA in ASEAN

ASEAN
Pharma Essential
Dairy Non Soups Animal
Dairy Pharmac ceutical Oil
Nonalc Essentia Tahun (Mala alcohol (Thail (Indones
TAHUN produ eu Soups Animal (Singap (Singapo
holic l oils ysia) (Thailand) and) ia)
cts tical ore) re)
2005 34389 12366 40087 101470 50237 592556 2005 0.85 2.45 38.8 1.60 3.73 3.09
2006 33010 7290 46653 106073 70225 838820
2007 54991 10173 64540 131782 94874 1377569 2006 0.93 2.39 39.77 1.61 3.17 3.24
2008 88651 22816 72499 148398 129224 2039361 2007 1,27 2.22 41.26 1.60 2.99 3.35
2009 96319 15208 81953 146703 128293 1736834 2008 1.30 2.36 40.72 1.55 3.17 3.18
2010 134717 30641 83225 218846 229642 2875628 2009 1.24 2.62 39.59 1.57 3.43 3.29
2011 133060 89092 116931 277568 345412 3852038
2012 107613 55684 157271 292410 464092 3318163
2010 1.17 2.90 36.49 1.62 3.42 3.12
2013 96897 58638 161178 342204 447747 1799700 2011 1.31 2.82 37.69 1.79 3.24 3.79
2014 87516 74632 193283 365149 508235 2180484 2012 1.55 2.94 37.87 1.81 3.31 3.24
Total 867163 376540 1017620 2130603 2467981 20611153 2013 1.48 3.09 38.52 1.76 3.37 3.55
Sources: ITC Calculations Based On UN COMTRADE 2014 1.77 3.27 38.34 1.84 2.93 3.94
Statistics, 2016
Unfortunately, potential of halal products others still under
Furthermore, Indonesia has some competitors and it has 1, such as Dairy products, eggs, honey, edible animal product
become halal products that are already traded globally. Based nest that has advantages by Malaysia. Indonesia has
off total products of Indonesia in international trade with several competitiveness before, but a few years was decreased. Soups,
countries in ASEAN. Indonesia stays in number 4 after broths & preparations thereof products be able to advantages by
Philippines. Singapore stays in number 1 following by Malaysia Thailand. Then, Non-alcoholic beverages (ex-cl. water, fruit or
and Thailand. The competitiveness will be measured by RCA vegetable juices and mi) advantages RCA also Thailand and
and compare with competitors countries in ASEAN. Thus, after Essential oils, perfumes, cosmetics, toiletries advantage by
competitiveness is found, the position of Indonesia as a country Singapore.
has capability in export or import of products. It will be measure Halal products of Indonesia still needs the government's
with ISP. attention in considering an increase in productivity and
Determining whether products of Indonesia susceptible to competitiveness because products development is still under 1
economic influence other countries, it will be tested with ITC. indicating they have not been able to compete with the state -
Lastly, to determine the prospects of halal products of Indonesia any other country in the world even to the ASEAN level.
a few years with the method of forecasting
INDONESIAN SCHOLARS JOURNAL –Paper Number (Will be replaced with volume and paper number if the
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Tabel 4. ISP 6 Potential Potential Halal Products of Indonesia products and Animal, vegetable fats and oils, cleavage products,
Tahun Dairy
Non- Pharmace Essential
Soups Animal
etc. while for other lawful potential products still have RCA
alcohol utical oil
below 1. The strategy for improving the production and product
2005 0.33 -0.99 0.18 -0.99 -0.96 0.97
2006 0.22 -0.99 0.24 -0.99 -0.98 0.97 development is needed in facing the global market, especially
2007 0.23 -0.99 0.32 -0.99 -0.98 0.98 in the ASEAN ECONOMIC COMMUNITY.
2008 0.36 -0.99 0.18 -0.99 -0.99 0.98
2009 0.26 -0.99 0.24 -0.99 -0.98 0.98 Strategy to Increase Competitiveness and Developing
2010 0.15 -0.99 0.26 -0.99 -0.98 0.98
2011 0.11 -0.99 0.27 -0.99 -0.97 0.98 Brand of Halal Products of Indonesia in AEC
2012 0.07 -0.99 0.36 -0.99 -0.98 0.98
2013 -0.03 -0.99 0.28 -0.99 -0.97 0.98
Halal is an important concept in the lives of Muslims. Halal
2014 0.10 -0.99 0.48 -0.99 -0.93 0.98 defines what Muslims can do and can not do, or consume. It’s a
shariah or religious requirement to protect Muslims to stay on
In analysis of Index specialization of product (ISP),
the right path. Likewise, shariah guidelines on halal production
Indonesia still as a big market share to any other products from
also promote sustainability, the concept of hygiene, sanitation,
other countries. Evidenced by the value of the average
and safety Mukhtar and Butt[5].
Indonesian still below 0 (zero). It is the duty of the toughest
In consumption, the concept of halal refers to the command
Indonesia in meeting domestic needs. Smaller domestic supply
from Allah SWT that mankind should consume products that
of domestic demand shows that Indonesia is a net importer of
have the features of halal and tayyib (Surah al-Baqarah 2:168;
today.
Surah al-Maidah 5:88; Surah al-Anfal 8:69; Surah an-Nahl
Tabel 5. ITC 6 Potential Potential Halal Products of Indonesia 16:114). It considers all of the physical and spiritual advantages
Tahun Dairy
Non- Pharmace Essenti
Soups Animal of the products to humankind. ‘Halalan tayyiban’ products can
alcohol utical al oil
2005 0.001 8.9 0.001 0.002 1.38 0.05 be interpreted as the products that are permissible (halal) to be
2006 0.002 0.001 0.002 0.002 6.40 0.06 consumed and beneficial (tayyib) to human body Bin et al[9].
2007 0.001 0.003 0.002 0.002 4.81 0.08
2008 0.001 0.002 0.002 0.002 4.75 0.11 It does not mean that the product must be halal and pure only.
2009 0.001 0.003 0.002 0.002 5.81 0.10 It also means that the product must be beneficial to the body and
2010 0.001 0.003 0.002 0.002 8.10 0.10
2011 0.001 0.003 0.002 0.002 1.10 0.10
does not cause any harm. Furthermore, what is beneficial for the
2012 0.001 0.003 0.002 0.003 6.61 0.11 body is also beneficial for the human’s mind and soul.
2013 0.001 0.003 0.002 0.003 1.63 0.10 According to Sazelin and Safiah[18], whatever products
2014 0.001 0.003 0.002 0.003 3.47 0.11
consumed must meet the criteria of halalan tayyiban which
Analysis Index of trade concentration (ITC) of Indonesia be encompass the holistic concept of quality including hygiene and
able to survive from disturbance economic from partner sanitary, safety, wholesome and the permissible by God.
countries of trade Indonesia. The rates of ITC Indonesia is Nonetheless, few things are strictly prohibited for all
under 0, except Soups, broths & preparations thereof product Muslims apart from exceptional circumstances, such as a
are highly susceptible to the economic conditions of the country serious threat to life. These include acts like indulging in
trading partners in ASEAN. Indonesia still has advantages and adultery, gambling, consuming liquor/pork, taking interest on
can survive from economic condition in another country, it will money, using the blood of animals and the meat of a dead
increase production and export the halal products potential of animal scarifies in the name of other than Allah Run et al[19].
Indonesia to the countries in ASEAN. Thus, products that are made of/or contain liquor, pork, blood of
Then, the last step to know the prospect of halal products of dead animal and services such as contemporary commercial
Indonesia for the next coming years will be used forecasting banking become Haram for most of the Muslims Hakim and
analysis. Jubari[20]. Furthermore, the complexity of human need in this
Tabel 6. Forecasting 6 Potential Halal Products of Indonesia century make people's difficult to attention about halal & haram.
Non- Pharmace Essenti It will be a good study to explore and explain the business.
Tahun Dairy Soups Animal
alcohol utical al oil Particularly in production and consumption.
2015 0,27 0,30 6,22 0,52 0,99 3,55
2016 0,30 0,31 6,50 0,51 0,97 3,60 Strategy to increase competitiveness halal products of
2017 0,32 0,31 6,78 0,51 0,95 3,65
2018 0,35 0,31 7,06 0,50 0,93 3,70
Indonesia be able to relate to national development program by
2019 0,37 0,32 7,34 0,49 0,91 3,75 government. The strategy developing halal products divided
2020 0,40 0,32 7,63 0,48 0,89 3,80
2021 0,42 0,32 7,91 0,47 0,87 3,85 become two categories, that is base on supply and demand. Base
2022 0,44 0,33 8,19 0,47 0,85 3,90 on Supply, the production of factors such us developing raw
2023 0,47 0,33 8,47 0,46 0,83 3,95
2024 0,49 0,34 8,70 0,45 0,81 4,00 materials, human resources, investment and facility for capital
will be increase. In other hand, partnership, research, and
Base on forecasting above show that’s halal products
SME’s become continuity factors of halal products as a solution
potential of Indonesia still dominated by Pharmaceutical
to improve variety of halal products of Indonesia. According to
INDONESIAN SCHOLARS JOURNAL –Paper Number (Will be replaced with volume and paper number if the
manuscript is accepted)

Law No. 20 of 2008, Micro, Small and Medium Enterprises is international markets and not affected by the economic shocks
a productive economic enterprise that stand-alone, conducted from another country.
by an individual or business entity that is not a subsidiary or This research needs intensive study to create a strategy to
branch office that is not owned, controlled, or be a part either improve the competitiveness of halal products from Indonesia
directly or indirectly from medium or large businesses that meet in the future. Data availability of halal products of Indonesia as
the criteria for Small Business as defined in the Act No.20 of analytical tool is one of important things for measuring the
2008. 27 SME’s has an important role in supporting the ability of Indonesia to revealed and strength with global trade.
advancement of the Indonesian economy. The roles of SME’s Hopefully, with this limitation, this research will encourage
are 1) Having a position as a major player in various sectors of another researcher to conduct intensive research on halal
the economy of the country 2) reduce unemploymet by products from Indonesia to seize opportunities in the trade of
providing a large job oppurtunities 3) play an important role in International Halal products.
empowering communities and developing local economic
activities, 4) as a source of innovation, so that new market can ACKNOWLEDGEMENT
be formed, 5) help keep the balance of payments to carry out Author would like to thanks to Riau University and all
export activities of society so that the country's main problems, lecturer for their moral and material for this research . All of
especially poverty, can be reduced Tedjasuksmana[21]. partners in economic faculty University of Riau who has
Base on demand, the ability to diversify the products and provided a lot of support and giving spirit, Ms. Lapeti Sari as a
market expansion become important. It can be made through motivate lecturer and Mr. Luqyan Tammani who always
exhibition, promotion, expo, and etc. Furthermore, efficiency support us.
and productivity to increase quality of products can be obtained
by improving the prospect of halal products itself. REFERENCES
There is some strategy to increase halal products of [1] M. Nasir and E. Chiew, “Non-Muslims ’ awareness of Halal
Indonesia and how to create a Brand of halal products Indonesia principles and related food products in Malaysia,” vol. 674, pp. 667–
674, 2010.
in ASEAN ECONOMIC COMMUNITY : [2] A. A. Rahman and S. A. Rahman, “Consumers and Halal cosmetic
1. Improving the business climate and easiness in products : knowledge , religiosity , attitude and intention,” vol. 6, no.
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[17] M. A. Niza, “Laporan Dampak ASEAN ECONOMIC

COMMUNITY Terhadap Sektor Industri Dan Jasa ,” Jakarta, 2014.
[18] S. S. Sazelin Arif, “Application of Halalan Tayyiban in the Standard
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Comments to author
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you can put in your background ()
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Response :

1. abstract has been changed according to the results

of the previous review.
2. literature we have lost, and be explained by
background.
3. methodology has to be improved according to the
results the previous review.
4. Additional data on the discussion and
improvement grammar.
5. paper had to be improved based on the template

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