AT long last, the Federal Government has moved beyond rhetoric to facilitate individual savings for the sacred journey of Hajj, which is going beyond the reach of the majority of people of Pakistan because of the monumental increase in Hajj expenditure over the last few years. Prime Minister Shehbaz Sharif has approved a proposal to introduce a Shariah-compliant, interest-free Hajj savings plan for Pakistani pilgrims to facilitate advance financial planning for the annual pilgrimage.
This is a step in the right direction as Hajj expenses are increasing almost every year and going by the domestic and global developments as well as Saudi policies, there are no hopes the expenses would come down meaningfully in any case. In fact, such a strategy should have been formulated decades back but we are criminally slow at adopting global role models on important issues. Malaysia’s Tabung Haji and Indonesia’s Badan Pengelola Keuangan Haji (BPKH) are widely recognized as the primary global role models for institutional Hajj financing and savings management and their success can be gauged by the fact that Malaysia’s TH is managing over $ 18 billion in deposits with millions of active depositors through a nation-wide branch and touch-point network. The TH was launched in 1969 and it invests pooled funds into Shariah-compliant assets—such as equities, Islamic fixed-income/Sukuk, real estate and money market instruments—and uses the investment returns to subsidize travel costs and provide annual dividends to depositors. The BPKH of Indonesia also optimizes such funds through Shariah-compliant investments (heavy in Sukuk and infrastructure/corporate portfolios) to generate sustainable returns, easing the direct financial burden on individual pilgrims. As for Pakistan, operational details are not available yet but the very fact that the proposal has jointly been prepared by the Ministries of Religious Affairs and Finance as well as the Central Directorate of Savings makes it clear that the scheme would be handled by the National Savings. This is a wiser approach to involve a public sector organization to guard against misuse of savings or fraudulent practices by companies. It is understood that the Directorate will invest these funds in Shariah-compliant schemes and if so why it is not doing so in the case of its own saving schemes as more and more savers are opting for investment of their savings in interest-free instruments.
