Economic Impact of Hajj and Umrah in Saudi Arabia - Essay Example

Economic Impact of Hajj and Umrah in Saudi Arabia and Saudi Arabia’s economy has showed continuous stability due to its influential oil industry as well as the religious pilgrimage practices that happen yearly. Saudi Arabia’s oil industry, which is the second largest producers of oil products in the world, is the country’s top economy earner. In addition, the Muslim pilgrimages practices have played an influential role in stabilizing the country’s economy. The religious rituals have been the second source of the country’s national come, after the oil industry’s contribution. Saudi Arabia is one of the most religious abiding Arab States in the Western Asia. The country’s stability in both its religious and economic status makes it one of the most prestigious Islamic States. Saudi Arabia’s strict adherence to Sharia Law and religious rituals has made the country a significant religious center in the world. The country is largely occupied by the Sunni Muslims, who account for more than a third of the total population in Saudi Arabia. This essay will cover the impact of the two pilgrimages, Hajj and Umrah in Saudi Arabia’s economy while also citing the respective countries that attend these pilgrimages. The Hajj and Umrah are important rituals in the Islam religion; the practices are conducted for religious dedications as well as acts of solidarity among the Muslims in the entire world. For instance, the Hajj pilgrimage is attributed to the great prophet Muhammad, which dates back to the seventh century. Although Umrah is optional unlike Hajj Muslim turn in great numbers to mark the practice, which is symbolic of their Islamic faith. The Hajj is a requirement for all Muslims at some point of their lives as long as they are financially and physically able. The continuous practice of these two pilgrimages over the years have not only improved Saudi Arabia’s economy but also strengthened the Islamic faith among Muslims worldwide. Millions of Muslim visitors who go to perform the annual Hajj and Umrah spend billions of dollars in Mecca. Al-Monitor states that the revenues generated from Hajj and Umrah in 2012 were about 62 billion riyals, which were a 10% increment compared to the previous year. The reports also indicate that out of the three million pilgrims who attended the Hajj ritual in 2012, 1.7 million were foreign visitors. The pilgrims were organized according their nationalities, out of the 189 different countries that the pilgrims had come from. According to Al-Monitor, the expert sources that provided the estimate statistics also indicated that the Hajj revenues represented about 3% of the country’s Gross Domestic Product (GDP) in 2012. That same year, the number of visitors who had gone to Saudi Arabia to perform the pilgrimage rituals had toppled to over twelve million people. The increase in revenues has been attributed to the high charging of Hajj fee as well as increased cost of living. Additionally, Al-Monitor also reports that a study in 2012 indicated that the average spending per individual ranged between seven thousand and fifteen thousand riyals ($1,870-$4,000) for every pilgrimage visit and more than three-quarter of the pilgrims spent between six thousand and eighteen thousand riyals ($1,600- $4,800) on expenses such as transport, food, drinks, and accommodation. In addition, the report by Al-Monitor indicated that the size of sales ranged between five hundred and eight hundred million riyals ($13.3 million - $21.3 million). Despite the fact that the pilgrimages take place in the Saudi Arabia center, the local products such as gifts and handicrafts experience a low marketing sales due to lack of marketing strategies and lack of coordination in learning the market demands. External products especially from China supersede the marketing of local products due to an organized marketing strategy by the Chinese firms as well as informed marketing knowledge about the pilgrim visitors. Such monopolistic competition can be countered through forming of an executive body in the private sectors from the government, which will implement a good protection system and care. According to Sarfraz, it cost a pilgrim $6000 to make an annual pilgrimage in 2013. Sarfraz also states that the number of pilgrim visitors to Mecca is increasing yearly, and the number is likely to increase from twelve million to approximately seventeen million in 2025. The increasing number of tourists has contributed to the growth of religious tourism sector in the country. Interestingly, most of the generated capital is usually witnesses by Mecca and Medinna where most pilgrims visit, although the support services such as the transportation and hospitality sectors are also gaining a considerable amount of income from the pilgrimage visits. The investments in real estate have been a profitable sector due to these pilgrimage visits, where Sarfraz comments that the price of lands in Mecca have shot up to over $22,000 per meter of land. According to Nuqudy, at the beginning of 2012, Saudi Arabia had announced that they would spend about four hundred million US dollars in the upgrading of the Hajj sites that were outside of Mecca. Among the projects included connecting Mina to Jamarat in Al-Azizia by relocating the cattle and camel locations to Al Sharayea in Mina. The project also involved advancing the water system in Muzdalifah and Arafat. In addition, Nuqudy asserts that Saudi Arabia planned to spend about $16.5 billion in 2012, in improving Mecca’s transportation system over a period of 10 years in order to facilitate Hajj pilgrimages. By 2012, Nuqudy states that Mecca’s network system was insufficient to handle effectively the huge numbers of pilgrim visitors who visited each year for Hajj and Umrah pilgrimages. The projects included introduction of new metro and bus network, which would cover about 182 kilometers. Clearly, plans were underway in Mecca to accommodate about six million pilgrim visitors who visited each year. Hajj and Umrah pilgrimage practices have caused a positive impact the tourism industry, while also creating job opportunities for a majority of the Mecca inhabitants. A large number of youth are often seen selling prayer beads and handicraft materials on the onset of the Hajj season. The tourism sector, which accounts for eight percent of the total jobs in Saudi Arabia, provides a huge opportunity for creation of employment in the local market. Sarfraz states that Takamul, which is an SCTA affiliate, has organized a fair number of employment opportunities around the country while also collaborating with tourism companies to motivate the youth to take up career studies in hospitality. Fakar states that the largest bulk of pilgrims’ spending is directed into the private spending such as housing expenses. According to Fakar, the Hajj season contributes a third of the total six billion riyals that are generated from the pilgrims each year. In addition, the private sector whose net worth estimate is over three billion riyals plays a crucial role by supplying accommodation facilities and food to the pilgrim visitors. Fakar also asserts that the transport industry also receives a big portion of the pilgrims’ expenditure to generate travel profits of over 5 billion riyals ($ 1.33 billion), which include cross-border transport expenses. Tawafa services create job opportunities for a variety of the Saudi Arabia inhabitants, including the Saudis as well as emigrants. Most of the pilgrim expenditure is directed towards Hajj agencies such as Zamzam and Tawafa establishments. The provision of these services costs each pilgrim approximately six hundred riyals. Moreover, a majority of the pilgrim visitors also spend a large amount of money in purchasing gifts and souvenirs, for example jewelry and perfumes. Additionally, the pilgrimages are a major source of high sales turnover in the major cities in Saudi Arabia such as Makkah, Madinah, and Jeddah. According to Long (98), Hajj has also influenced the advancement of the economy through improvement of infrastructure. For instance, the national all-weather road, which was constructed in 1979, was purposely built with the consideration of Hajj. Moreover, the expansion of the Prophet’s Mosque in al-Madinah and Haram Mosque in Makkah, which cost eleven million US dollars and one hundred and fifty five million US dollars respectively, were objectively constructed with Hajj in mind. The expansion of the mosques enabled efficient accommodation of increasing number of pilgrims who visited the mosques yearly otherwise, it would have been impossible in a few years for the entire pilgrims to conduct the rituals in the two mosques. Long (98) also asserts that the development of Jiddah port and the establishment of the Jiddah airport, which exceeded two hundred million US dollars was influenced by the Hajj pilgrimages. While the number of pilgrim visitors continues to increase yearly, the number of countries, which participate in the pilgrim rituals also continues to rise. Different pilgrims from various nationalities are participating in the pilgrimage rituals. For example, Ahmed and Balaban state that two million Muslims from one hundred and eighty three countries visit Hajj each year, with 2009 having 2.5 million pilgrim attendance. Eleven thousand of the pilgrims travelled from the United States. A majority of the international pilgrims prefer air travel to Jeddah, where they take a bus to Maccah. The countries with the highest rates of attendance were the nations with the biggest Muslim populations such as Indonesia, Pakistan, India, Egypt, Iran, and Turkey. In 2012, about one hundred and eighty thousand Pakistanis attended the pilgrimages. The Telegraph asserts that Indonesia among the leading countries, which has the highest number of pilgrim visitors in the world with over 200,000 pilgrims yearly. It goes further to affirm that each Muslim country has a Hajj representation of a thousand pilgrims for every million citizens in their respective countries. Due to security concerns, Saudi Arabia deploys more than sixty thousand security officers to maintain orderliness. Among the 63,000 there are more than three thousand antiriot security officers who are further supported by about five hundred fully armored vehicles. The civil defense forces also deploy about twenty two thousand security officers with fully equipped six thousand vehicles. To enhance surveillance systems, the Telegraph also reports that about one thousand five hundred CCTV cameras were installed all round the Grand Mosque in Makkah, while about twenty police centers were established to serve as the holy places in 2011. According to Ahmed and Balaban, the attendance figures in 2012 were much higher as compared to 2013. The decline in the foreign attendance was attributed to Saudi Arabia reducing the amount of Visa applications in the country. Saudia Arabia government put across the measures due to ongoing expansion and renovations of the holy sites. Moreover, there were serious concerns about the MERs virus, which had previously affected a huge number of pilgrims. The Telegraph also reports that in 2013, out of the 1.3 million pilgrims who attended the pilgrimage rituals, eight hundred thousand were local pilgrims. Additionally, the local officers turned away about thirty thousand pilgrims who tried to gain access to the holy sites. In conclusion, the religious pilgrimages in Hajj and Umrah have influenced the social and economic status of Saudi Arabia. Although the oil industry surpassed the religious rituals as the country’s main income generator, the Islam pilgrimages have made a strong impact on stabilizing Saudi Arabia’s economy. Among the many benefits that have resulted from the yearly practice of the rituals include, the tourism sector has extensively grown and established due to the massive amounts of income it gains from the pilgrimages, employment opportunities have emerged during the Hajj season such as selling handicrafts, prayer beads, and perfumes. In addition, infrastructure especially the road network system has been modernized in order to handle effectively the large number of pilgrimage visitors yearly. Security systems have been extensively implemented to ensure the smooth operations of the Hajj rituals. Clearly, the high amounts of Saudi Riyals that are pumped into the Saudi Arabia economy are a result of the Hajj and Umrah Islamic practices. The country’s economy will continue to grow and prosper as long as the Islamic rituals are maintained in Mecca and Medina. Works Cited Ahmed, Qanta. Balaban, Victor. “Saudi Arabia: Hajj Pilgrimage.” Center for Disease Control and Prevention. Web. 23 July 2014. . Fakar, Galal. “Economic Impact of Pilgrimage Huge:Study.” Arab News. Web. 23 July 2014. . “Hajj pilgrimage 2011: by numbers.” The Telegraph. Telegraph, 23 July. 2014. Web. 23 July 2014. < http://www.telegraph.co.uk/news/worldnews/middleeast/saudiarabia/8867639/Hajj- pilgrimage-2011-by-numbers.html>. Long, David E. The Hajj Today. , 1979. Print. Sarfaz, Ayesha. “The Economics of Hajj.” Arabian Gazette. Web. 23 July 2014. . “The Economics of the Saudi Pilgrimage Season.” Al-Monitor. Web. 23 July 2014. . “The Hajj’s Economic Impact on Saudi Arabia.” Nuqudy. Nuqudy. 28 October. 2012. Web. 23 July 2014. . Read More