An unsustainable model

TH may have to make more money out of its investments if it wants to continue subsidising pilgrims

COME Aug 10, some three million Muslims from around the world would begin performing the haj, a once in a lifetime obligation for the ablebodied and financially capable (Istitoah in Arabic) . The haj is 1,379 years old since Prophet Muhammad performed the pilgrimage. Malaysia’s first flight to the holy land is scheduled to leave Kuala Lumpur on July 4. All in all, there will be some 80 flights this year, about 20 more than last year.

Not only the flights are increasing, but also the cost to perform the pilgrimage is soaring. Year-on-year. Consider this. Tabung Haji (TH) spent RM93 million in subsidies in 2013 on some 30,000 pilgrims. The cost of performing the haj then was RM15,555, of which the pilgrims paid RM9,980. The balance of RM5,575 was subsidised by TH. Last year, TH had to cough up RM400 million for 30,200 pilgrims at RM 12,470 per pilgrim. This does not include indirect costs borne by TH between RM50 million and RM60 million. The pilgrim’s contribution towards the cost of the pilgrimage has stubbornly remained at RM9,980. As the years progress, TH may find itself in a bind. The earlier it untangles itself out of this unsustainable subsidy knot the better.

One way TH can to do this is to “educate” potential pilgrims about the concept of Istitoah, which makes pilgrimage obligatory only for those who are capable — both bodily and financially. Not that TH has not done this, but perhaps a more aggressive campaign on Istitoah will go a long way in clarifying what is obligatory and what is not. The learned among the Muslims have explained this, too. But some are not taking the bite.

Potential pilgrims, too, must seek to understand the unsustainable position the subsidies are putting TH in. Pilgrims must know that those who can afford to pay the full cost of the pilgrimage — estimated to be RM22,900 in 2019 — should do so. Or better still, such pilgrims of means should take the more expensive packages — starting from RM30,000 — organised by private companies sanctioned by TH. There is a plus in the private packages as well. Such packages offer hotels within 1km of the Al-Masjid AlHarām. Pilgrims on TH’s Muassasah package, however, have to travel further to reach the Kaaba. As a normal course of action, TH sends out a letter to potential pilgrims on an annual basis before the beginning of the haj season asking them to opt out of the subsidies, but very few do. Because according to one source, they are there. This simply means the financially capable are crowding out the really deserving. It is difficult to tell how many of those who opt for subsidies are of means as TH does not provide such statistics. Nor does TH have access to the net worth of its depositors. It is therefore incumbent on the depositors with means to opt out of the subsidies so that the more deserving can have them. This is the right thing to do. At least until such time TH finds a way to make more money from its investments.

Potential pilgrims, too, must seek to understand the unsustainable position the subsidies are putting TH in.