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Tapping Hajj's Economic Windfall

Original Source:

Retrieved on: 11th January 2017

Maqbool Ahmed Siraj

Hajj Management of Malaysia 
Dr. Mohammad Abdul Mannan 
Islamic Development Bank, 
P.O. Box: 9201, 
Jeddah, Saudi Arabia 
Pages 104, Price not mentioned

Hajj offers numerous economic opportunities such as setting up trade exhibition in Saudi Arabia, monetary unification of Islamic world through an Islamic Dinar etc.
This research paper by Dr. Mohammad Abdul Mannan brings to light the phenomenal success Tabung Haji has achieved during quarter century of its operations. But more significant is the focus on how a combination of social vision and political will can turn a spiritual institution like Hajj into a great economic boon.

Tabung Haji was set up in 1969 in Malaysia by a government Act to organise Hajj pilgrimage for the Malays. The Malays had traditionally been devout Muslims and used to collect money in pillows, mattresses, earthen jars and cupboards. After Malaysia became free, its visionary prime minister Tungku Abdur Rahman took notice of a study by Prof. Ungku Abdul Aziz on how people saved money and ensured that it remained interest free to perform Hajj. An Act of Parliament brought Tabung Haji into existence. Operations began in 1963 with 1,281 depositors and 46,000 Malaysian dollars. It had then three branches.

Though basically a saving institutions, Tabung Haji began investing funds in businesses permitted under Islamic Shariah. Investment advisory council comprised financial and business experts. The operations were organized on a highly professional pattern. Deposit and withdrawal procedures were simple and Malaysian pilgrims were provided the facility to withdraw the money even in the holy land during the Hajj.

Today, Tabung Haji has 83 branches in Malaysia and had invested funds to the tune of Malaysian Ringitts (expressed as MR) 2.55 billion in 1994. It had been paying bonus on deposits at a rate of 9.5 per cent which was however lower than bonus offered by other financial institutions in the country. It paid out MR 214 million in 1994 after paying zakat over each individual’s deposits. The amount of zakat disbursed itself came to MR 6.5 million in 1994. Tabung’s funds are invested in plantation, industry, commercial sector, real estate through equity participation. Figures and the monetary windfall apart, Tabung Haji became the main organising body for Malaysian Hajis looking after their registration, medical examination, travel formalities, transport, accommodation, search operations for lost pilgrims, mobile clinics at holy sites etc.

Author urges the need to replicate the Tabung formula in other Muslim countries and societies and feels that the success owes itself to political will and social vision of Malaysian rulers, monopoly enjoyed by the Tabung, convenient deposit facilities, total non-interference by the government, professional management, and keeping the overhead expenditure under strict check.

Author Mannan visualizes further expansion of Hajj for tapping of its economic opportunities. He recommends setting up House of Islamic Ummah under the umbrella of Organisation of Islamic Conference (OIC) at Saudi Arabia, an exhibition of products of Islamic countries. He also suggests development of Islamic Dinar, a monetary unit for monetary unification of the Islamic world, establishment of Hajj Management Bank under the OIC and expansion of pilgrimage to tourism of holy places. Indeed the opportunities are wide and vast, given the political will of the rulers of Islamic world. But going by the increasingly smooth facilities for Hajj, the organisation of the sacrificial meat project by the IDB, the objectives cannot be beyond the realm of realisation.

In an Islamic world starved of financial and economic successes, the Tabung Haji comes as a whiff of fresh air. Mannan’s study which is still in the form of a research paper deserves to be enlarged so as to include other such financial institutions which owe their origin to Islam. Despite numerous editing errors and lackadaisical presentation, the effort must be lauded. 

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