JEDDAH, 12 December 2007 — Haj and Umrah, which are important Islamic rituals and among the five pillars of Islam, have had, for a millennium and a half, a major economic impact on what is now Saudi Arabia. Pilgrims are considered to be the Kingdom’s second economic backbone.
Dr. Ali Hassan Al-Nagur, the head of the Transport Committee at the Jeddah Chamber of Commerce and Industry, in his recent book “The Economy of Haj and Umrah,” writes that private sector revenues from the pilgrimage industry in 1425AH (2004-05) reached SR30.6 billion ($8.2 billion). The Haj generated SR14 billion, with the Umrah season generating SR16.6 billion.
According to Haj Ministry figures, the Kingdom hosted more than six million Umrah pilgrims and more than 2.3 million Haj pilgrims in 1425AH.
The increase in number of pilgrims every year goes hand in hand with the increase in Muslims across the world. The Kingdom has set quotas for each country. Haj quotas stand at 1,000 pilgrims for every million people in any single country. Umrah quotas are relatively larger.
Nagur also wrote that the number of Umrah pilgrims would reach 10 million by 2010. He added that this would have an enormous effect on the Saudi economy, especially since the Saudi authorities now allow pilgrims to visit other parts of the Kingdom.
The bulk of pilgrim spending goes into the private sector, such as housing. Of the more than SR6 billion spent by pilgrims each year, a third is spent during the Haj season.
The private sector, which is worth more than SR3 billion a year, also plays an important role in supplying food and providing accommodation to pilgrims. The transport sector also receives a huge chunk with pilgrims spending on travel hitting SR5 billion ($1.33 billion), including cross-border transport.
One of the great impacts of Haj and Umrah seasons is the creation of employment opportunities for both Saudis and expatriates. Nagur said Tawafa establishments employ thousands of Saudis and that a great amount of pilgrim spending goes toward Haj agencies including Zamzam and Tawafa services. These services cost each pilgrim around SR600. Pilgrims also spend a large amount in buying gifts and souvenirs, such as prayer beads, carpets, perfumes and jewelry.
Nagur observed that Haj and Umrah cause a high sales turnover in most of the Kingdom’s cities, especially in Makkah, Madinah and Jeddah. Haj and Umrah are also an important source of foreign exchange, he added.
