The ongoing Covid-19 pandemic has had a major impact on the lives of people all over the world as they learn to adapt to the new normal and abide by the standard operating procedures (SOPs) set to stem the transmission of the virus.
Muslims making the pilgrimage to Makkah, which is the fifth pillar of Islam, are not exempted from the Covid-19 protocol.
The need to comply with several SOPs such as physical distancing and limits in hotel room and bus capacities, as well as the limited movement of pilgrims inside Masjidil Haram (the Grand Mosque), will certainly translate into higher costs.
At a media conference recently, TH Haj executive director Datuk Seri Syed Saleh Syed Abdul Rahman explained that the increase in the cost of performing the haj was unavoidable due to the additional costs incurred in the implementation of the new SOPs, as well as the hike in operating costs and other costs in Malaysia and Saudi Arabia.
In view of the rising costs, can Tabung Haji (TH) – especially in terms of its finances – continue to sustain the assistance rendered to pilgrims to help keep their pilgrimage costs low?
According to its records, TH has given pilgrims financial aid totalling RM2 billion since 2001.
In 2019, for example, the full cost of performing the haj came to RM22,900 per person but first-time pilgrims only had to pay RM9,980 per person, with the balance sum of RM12,920 borne by TH.
Malaysia did not send pilgrims to Saudi Arabia in 2020 and 2021 due to the Covid-19 pandemic.
INCREASE IN COSTS
Commenting on this matter, freelance financial consultant Suzardi Maulan said potential pilgrims have to accept the reality of the rising cost of performing the haj.
He said as the nation’s leading Islamic financial institution, TH has to take prudent measures to enable it to sustain its operations at the best possible level in the wake of the rising haj costs.
“Currently, if you were to look at any fixed-income investment, the returns are low and this is the reality. TH is unique because it is not like ASB (Amanah Saham Bumiputera) which provides returns to depositors. TH shares its profits and helps (to manage) those who want to go on the haj.
“Hence, this Islamic financial institution must review its objectives as to whether it wants to help people to perform the haj or help its depositors to get returns (on their deposits)… this decision will take into account the priorities from a high-level point of view,” he told Bernama.
To ensure its sustainability, Suzardi said TH has to change its approach and should not be bound by the wishes of various parties, including its clients.
This is because the prevailing situation is not the same as it was in the 1990s when
TH could give high returns to its depositors.
“As a financial institution, TH is subject to market changes and is not immune to market risks, (hence) we must accept (the reality that) TH’s situation is not the same as before,” he said.
Dr Mohd Zaidi Md Zabri, a senior lecturer at the Faculty of Business and Economics, Universiti Malaya, said the implementation of SOPs to curb the spread of Covid-19 is among the main factors for the haj price hike.
Quarantine, Covid-19 test and healthcare expenses for pilgrims are also expected to hike up the haj cost.
“The Saudi Arabian government has increased its value-added tax (VAT) to 15 percent from five percent previously which may cause haj and umrah costs to go up.
“The foreign exchange rates also have a significant impact on haj costs. According to Fitch Solutions Country Risk and Industry Research, the ringgit’s performance is expected to weaken in 2022, which may cause a hike in haj costs in the near future,” he said.
Mohd Zaidi, meanwhile, supported calls by various parties urging TH to channel haj aid to senior citizens and people in the B40 group to enable them to enjoy the experience of performing the haj.
He said such targeted assistance is in line with the Islamic economic concept which emphasises the concept of equity rather than equality.
“TH’s original concept, that is, the essence of the idea behind the establishment of TH by the late Royal Prof Ungku Aziz was to help prospective pilgrims to save money for the purpose of performing the haj without negatively impacting their own finances and economy.
“So, I feel that if prospective pilgrims can afford to make the pilgrimage without hurting their finances, then they don’t need (TH’s) assistance. What I mean is, pilgrims from the T20 group, for instance, can perform their haj by paying the full price or, in the near future, almost the full price,” he said.
Meanwhile, Dr Nur Hasnida Abdul Rahman, assistant professor at the Department of Finance, International Islamic University Malaysia, did not dismiss the possibility of the occurrence of a deficit of trust in TH if it ceased to render haj aid without having a sustainable strategy in place.
She said the best way to handle the haj aid issue is by requesting the National Fatwa Council’s religious affairs committee to meet and issue a fatwa on TH’s haj aid.
“We have to mobilise our efforts to provide proper financial education and rectify the misunderstandings that arose over the previous extraordinarily high hibah by understanding the original purpose of (setting up) TH, which is a distinguished haj management organisation.
“Most TH depositors keep their deposits at TH with the main aim of performing the haj… these are the depositors that need to be exposed to sustainable financial education by TH,” she said.
Nur Hasnida also urged TH to intensify efforts to help prospective pilgrims to save money for the purpose of performing the haj without negatively impacting their finances and economy.
“We also have to correct the misunderstanding over the obligation to perform the haj because so far our understanding of the concept of istito’ah or capacity was limited to the aspect of health and effort without giving special attention to financial ability.
“All this while, we have been ‘enabled’ by the assistance rendered by TH and this unhealthy phenomenon can have a negative impact on the sustainability of TH’s operations,” she added.
About Post Author
HC. Prince Anofiu Olarewaju Elegushi addressing the intending pilgrims that could not per…