How does The Hajj Impact Economies Around The Globe?

Islam, being a complete code of life, lays down a comprehensive set of rules and socio-economic principles for the welfare of human beings in this life and the world hereafter. Some of these religious obligations such as Hajj have far-reaching impacts on the lives of millions of people around the world.

The Islamic economic system is different from other systems as it is based on divine guidelines. Its socio-economic system revolves around the principles of justice, brotherhood, care, and cooperation, and feelings like hatred and jealousy do not thrive in an ideal Islamic society.

There is no concept of a truly Islamic society without socio-economic justice and to obtain this end, Islam prohibits interest, bribery, grabbing others’ property illegally, short-weighing, fraud, stealing and robbery, extravagance, miserliness and earning from sources of vulgarity, gambling, and wine.

Some of the rituals of Islam are directly connected with the economic affairs of society, and following religious teachings in true letter and spirit, help individuals and societies grow business and trade, along with fulfilling religious obligations.

For example, the Hajj (pilgrimage) and the sacrifice of animals have a wide economic impact on Islamic society.

How does The Hajj Impact Economies Around The Globe?

Hajj is a pillar of Islam and each year millions of Muslims visit the sacred cities of Makkah and Madinah, and one effect of this is the generation of billions of dollars worth of economic activity.

There are two parts of this ritual ie Hajj and the sacrificing of animals. Both have a huge economic impact. Hajj, a yearly religious activity, benefits travel agents, restaurants, food industry, telecom sector, airlines, and land transport, butchers and laborers within Saudi Arabia and in other Muslim and non-Muslim countries.

Pilgrims stay in Saudi Arabia for several weeks, driving constant economic activity during their stay there. (This year, however, due to Covid-19, Hajj activity has been reduced substantially, thus, would be impacting economic activities accordingly).

Similarly, the Umrah performed at any time of the year attracts millions of pilgrims and it too generates billions of dollars for Saudi Arabian and other Muslim economies. Accordingly, private Hajj and Umrah operators, travel agents, transporters, restaurants, etc in Muslim countries earn billions of dollars throughout the year.

The second part pertains to the sacrificial animals. On the one hand, there is a direct impact on millions of poor people through the provision of meat, and on the other, huge economic activities are generated in so many upstream and downstream industries throughout the year in general and on Eidul Azha in particular.

The animal sacrifices on the occasion of Hajj (Eidul Azha) create many economic opportunities at all levels of the economy.

Some people argue that the sacrifice of millions of animals is not a beneficial act. They are of the view that instead of sacrificing animals, cash should be distributed among the needy.

However, the experience and findings of some studies prove this point of view illogical and inappropriate. The studies found that the impact of cash distribution to the poor is very low as compared to the sacrificing of animals, and there is a much higher economic impact of the latter on societies around the world.

There are enormous socio-economic benefits to individuals and several sectors of the economy. It benefits various industries directly and indirectly. Millions of laborers get jobs and make earnings on this occasion.

In poor countries, the highly poor and undernourished, who are not able to eat meat or beef the whole year, are also able to enjoy this blessing on Eidul Azha.

Livestock sector

The other impact pertains to the livestock sector as on this occasion, the trading of animals reaches its peak. In Pakistan, the livestock sector has a share of around 61% in overall agricultural activity and 11% in the gross domestic product (GDP).

Foreign exchange earnings from it stand at around 3.1% of total export earnings and it is a source of 35-40% of income for over eight million rural families, providing them with food security, particularly in desert areas like Cholistan, Thar and various parts of Balochistan.

Livestock is a major source of income for the inhabitants of rural areas, hence, higher demand for livestock on Eidul Azha generates plenty of economic opportunities in the rural economy of Pakistan. Pakistan’s livestock sector has grown and particularly, cattle, sheep, and goat rearing have recorded phenomenal growth over the past two decades. Rearing all these halal animals is beneficial and a source of poverty alleviation. In Pakistan, there is a healthy trend of goat rearing. In the last 20 years, the number of animals has increased from 49 million to around 78 million in 2019-20.

Thus, Eidul Azha has a huge multiplier effect on the economy as it benefits industries like leather, livestock, transport, farming, tanning, footwear, garments, gloves, shoes, and uppers, directly and indirectly.

The Hajj and animal sacrifice is indeed linked beautifully to the economy, stimulating huge economic activities and helping individuals and industries grow. Millions of animals are sacrificed, huge amounts of wealth worth billions of dollars are circulated, poor are fed, unemployed get employment, poor graziers get cash, industries get raw material, production increases, exports rise, and so on. The estimated amount involved in the sacrifice of animals in Pakistan is more than Rs500 billion and after considering other industries, this amount would be much higher.

The total number of sacrificial animals in the world is around 82.5 million and Pakistan ranks third globally, with around 10.4 million sacrificial animals, after Saudi Arabia (15 million) and Indonesia (10.9 million).

Leather industry

Pakistan is considered to be the hub of production of high-quality leather and leather products, with nearly 800 tanneries engaged in producing finished leather from skins and hides of cows, buffaloes, sheep, and goats.

The leather industry is a major beneficiary of Eidul Azha as it receives most of the raw material on this occasion and earns foreign exchange for the country through the export of leather garments, gloves, tanned leather, and footwear. Over the past few years, the share of the livestock sector in Pakistan’s GDP has overtaken that of the crop sector, indicating a shift towards livestock and reduction in the crop sector. This indicates that great potential exists for growth in the livestock sector.

However, in this regard, proper planning, provision of interest-free credit to the graziers and low-income people, and training can help this sector to expand and grow faster. This will not only help in reducing unemployment and poverty but will also strengthen the national economy.