Unaffordable Hajj cost – 07 Mar 2023

The government has slashed the quota for Pakistan-based pilgrims in half

The economic crisis is now hitting the Hajj pilgrimage, as the government has slashed the quota for Pakistan-based pilgrims in half. The reduction has essentially been handed off to overseas Pakistanis, who saw their share of Pakistan’s overall quota of about 179,000 pilgrims increase to 50%. The logic behind this is relatively straightforward — overseas Pakistanis will not be dipping into Pakistan’s meagre foreign currency reserves to pay for flights, lodging and other expenses associated with the pilgrimage. In fact, it is actually a net gain of foreign currency for the government, since overseas Pakistanis would pay the costs in dollars. It is also worth noting that locally-based relatives of overseas Pakistanis are also eligible under the overseas quota as long as the payments are made from overseas and in dollars.

Meanwhile, the cost of Hajj is rising significantly for everyone, regardless of nationality, due to inflation and recent reports that the Saudi government is increasing taxes related to the pilgrimage. However, the greatest concern from a purely economic perspective is Finance Minister Ishaq Dar’s assurance to the religious affairs ministry that the government will make all necessary funds available for the government Hajj programme. Total expenditure on the Hajj scheme in 2023 is expected to be about $2 billion. Foreign exchange reserves are hovering between $3 billion and $4 billion, which is barely a month of export payments. Should the government spend billions subsidising the pilgrimage when our envoys are running around the world, begging bowl in hand? Even though the total sum will not come from the national exchequer — the government estimates it will need ‘only’ $284 million to support the local quota of pilgrims — allowing private individuals to spend such large numbers on Hajj when we cannot afford to pay for food imports is a dangerous decision, to put it lightly.

Read more