BMI notes that one company - Canada's Viva Pharmaceutical - has already expressed an interest in establishing a US$12mn halal-certified manufacturing plant in Brunei. Up to 100 local people could be employed at the facility. Because of this potential economic stimulus, it is our view that other countries, such as Malaysia and Indonesia, will emulate Brunei and formalise rules for the manufacture of halal medicines.

Halal is an Arabic term meaning 'permissible', and with respect to pharmaceuticals, it excludes products derived from blood, swine and animals slaughtered in the name of anyone but God. As such, many medicines - for example those compounded in capsules with the animal product gelatin - cannot generally be consumed by observant Muslims. Pharmaceutical companies have been aware of this niche for some time, but it is only recently that drugmakers have explicitly targeted the area for growth.

Brunei is fairly well suited to develop a halal-certified manufacturing base. It has the second highest Human Development Index among the South East Asia nations, after Singapore, and is classified as a developed country. The government provides all medical services free of charge and subsidises rice and housing. Crude oil and natural gas production account for nearly half of its GDP. Most importantly, Islam is Brunei's official religion.

Demand for halal-certified pharmaceutical is increasing rapidly. With approximately 1.57bn adherents, Islam is the world's second largest religion and third-fastest growing. It is the predominant faith in the Middle East, North Africa, and large parts of Asia. As economies in these regions expand, demand for healthcare in general and halal-certified pharmaceuticals in particular will rise.

It is clear that Brunei is committed to halal-certified products. In July 2009, the country launched the Brunei Halal trademark. The designation will allow compliant manufacturers to leverage Brunei's strict compliance with laws relating to Islamic teachings.