Ramadan inspired dates index
I have been fortunate enough to be involved in many interesting conversations over the years from the potentially practical (Islamic stock exchange, Islamic Libor, convergence between Islamic finance and halal industry), to potentially flawed (Islamic inflation, Islamic unemployment, consumer price index, Islamic car, Islamic washing machine), and the potentially feasible (Islamic currency, dinar).
Big Mac index
Today, I would like to speak about the theory of purchasing power, but present it as something relatively simple and relevant that not only attempts to capture the purchasing power of (Muslim country) consumers, but also with something that is closely linked to historical Arabia and referenced in the Holy Quran.
A purchasing power theory index has been around since 1986, and it’s linked to one of the most recognised global brands around the world. McDonald’s, the golden arches company, has made the ‘Big Mac’ into a trademarked asset class, much like ‘Xerox’ equated to photo-copying. Its signature product, Big Mac, is known worldwide and is often used as a symbol of American capitalism.
Why doesn’t the Muslim world, consisting of 57 countries and nearly 25 per cent of the world’s population, have something comparable? Are brands like Mecca Cola fit for purpose or is it pushing religion and confining to only Muslims?
In 1986, The Economist published the oversimplified burgernomics, as a tongue-in-cheek example of Big Mac PPP. It examines the purchasing power parity between nations, using the cost of a Big Mac as a benchmark. Obviously, this is the language utilised by a layman and not an economist, but it conveys the essence of the index intent.
Put differently, the Big Mac index is about the amount of time that an average worker in a given country needs to earn to purchase a Big Mac. But, the Big Mac may not be applicable to many Muslims, be it costs, halal certification, taste, or availability.
The million dollar question has two parts: 1. Does the Muslim world need to develop a halal Big Mac equivalent index? 2. If so, what type of ‘food’ could command the same brand recall as the Big Mac amongst Muslims?
Yes, there is a desire to have a comparable (food) index that relates ‘more’ to the Muslims due to its availability, acceptability, historical and religious significance. More importantly, it neither requires detailed explanation nor justification of the chosen ‘food’.
In going through the process of selecting the right food for the proposed index, obviously, it is worth looking at the various options considered to rival the Big Mac.
A Rojak or oxtail soup index lacks the universality, as such cuisine may not be available or in demand outside of Malaysia, Singapore and Indonesia. Biryani is probably a better bet than Rojak or oxtail at a global level, but should it be chicken, lamb, beef, or prawns based?
Honourable mention needs to be made for Bukhara rice, shawarmas, baklava, curry, bread and lentils as index barometers, but somehow they do not quite encapsulate the notion of halal Kebabnomics.
Hence, the closest Big Mac match for Muslims could be the date. Obviously, there will be disagreements on comparing dates (natural food) to processed food (Big Mac) and the relevance of dates outside of the holy month of Ramadan.
Dates are mentioned in the Holy Quran as most beneficial for health, encouraged to be consumed at Iftar (breaking of fast) during Ramadan, used as an ingredient in a variety of foods, and are subject of economic scientific discussions, as its health components strike discourses at conferences and festivals.
It is in the holy month of Ramadan that the sale of dates reaches its peak as Muslims worldwide abide by the Sunnah of Prophet Muhammad (peace be upon him) to break fast with dates or water — as he said, this is undoubtedly the best thing for the health of our bodies. The variants of date products include pickled dates, date ice cream, date cola, etc, modelled into different delicacies. The utilisation of dates today has grown by leaps and bounds as it was once a upon a time used as a provision to nourish prophets and messengers in their long missions and nomadic lifestyle.
The proposed dates index may be stated as: how much time is required for a person to work to purchase five kilogrammes of Madinah dates. In knowing fellow Muslims, there may be differences of opinion of the appropriate dates, but we need to have an indicator, which we can call our own.
The dates index is more relevant than a Big Mac as it rhymes with all Muslims regardless of their race/ethnicity, geographical and/or cultural differences.
The writer is co-founder and MD of Azka Capital, private equity advisory firm focused on halal industry initiatives, and he is an advisor to Thomson Reuters on Islamic finance and halal industry. Views expressed are his own and do not reflect the newspaper’s policy
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