KUALA LUMPUR, May 7 — Boycotting major brands in Malaysia will have unintended consequences to the local economy including undermining Muslims who own or work for these firms, said the Institute of Islamic Understanding Malaysia (IKIM).
Its director-general, Datuk Dr Mohamed Azam Mohamed Adil, said boycotts may backfire as large companies like McDonalds, KFC and Pizza Hut are among the biggest corporate taxpayers in Malaysia and whose largest shareholders are Muslims.
“It is feared that emotionally-driven boycotts without proper planning could undermine the economy of Muslims themselves. This action also affects the job sector, especially involving local workers employed by the boycotted entities, who may face pay cuts or job loss,” he said in a statement today.
He said the orchestrated movement to boycott companies allegedly supporting Israel in the conflict with Palestine was a key effort among Malaysian Muslims but the move could end up doing more harm.
He said that an alternative could instead be to take over these companies by buying majority stakes in them
“This would provide greater long-term benefits, especially in socio-economic aspects in Malaysia.
“The profits gained can eventually be channelled into more beneficial endeavours for Malaysia and, at the same time, contribute to the primary goal of supporting Palestine,” he said.
Mohamed Azam said that it has been apparent that boycotting has been the chosen method of protest against companies deemed acting out of public interest such as that against supermarket chain, KK Super Mart & Superstore Sdn Bhd (KK Mart), following the issue of stockings with the word Allah written on them in one of its branches.
However, he pointed out that Perak Mufti Datuk Seri Wan Zahidi Wan Teh said that boycotts like that against KK Mart should be stopped, arguing that it goes against Islamic justice and are not in line with the Sunnah of the Prophet Muhammad.
“IKIM believes that the boycott issue should be examined based on principles of justice and considering the benefits and harms deeply. Are the actions taken fair and correct, and do they bring about goodness or, on the contrary, more harm than good?” he said.
“Boycott represents real consumer power, especially in conveying messages to companies that act against the public interest. It also serves as an important signal to Malaysian entrepreneurs to conduct business honestly and maintain the quality of products and services.
“Economic experts have said that boycotts tended to be reactive, short-term, and emotion-driven actions that may yield temporary results, but are not effective in the long run and do not address the real issues,” he said.
Mohamed said that the impact of boycotts has been said to be minimal on the domestic economy as they target specific businesses but more severe impacts will be felt by the targeted businesses, leading to decreased sales and profits, and even facing the risk of losses.
“At the same time, the country's position as a trading nation and investment destination is severely affected,” he said.
“IKIM believes that the boycott issue should be thoroughly examined. Alongside conducting research on this issue, IKIM will soon organize roundtable discussions involving experts from various fields to find the best solutions regarding this matter,” he added.
