If there is a narrative that the Government subsidizes the Hajj pilgrimage, then it is a grave mistake. The managed Hajj funds are indeed subsidizing the State Budget’s expenditures through the use of IDR 167 trillion of Hajj funds, 70% of which went to buy SBSN.
The Government does not provide subsidies to Hajj pilgrims like fuel and electricity subsidies. As a matter of fact, the Government is paying the yield on the Hajj funds at a rate of 5.5%, extremely small compared to investments other than SBSN of 10% -15%.
A number of steps can be taken to avoid the Hajj cost increase in the future:
First, the BPKH must have a makeover. The root of the problem of why the Hajj cost continues to rise is because of the BPKH’s failure to obtain the optimal rate of return on investment for the Hajj funds. The BPKH can only provide a benefit value of 5.5% of managed Hajj funds. Meanwhile, the optimal benefit value of the Hajj funds is 10%. It is unnatural if the BPKH’s failure to provide an optimal rate of return must be suffered by the 5.3 million hajj pilgrims.
The BPKH’s low performance results in the benefit value of the 2023 Hajj, and eventually, it must be reduced from 60% of the Hajj cost in 2022 to 30% in 2023.
Second, there should be changes to Government Regulation (PP) No. 34/2014. In PP 34/2014 article 30 and article 31 concerning Hajj financial management, it is stated that investment of Hajj managed funds is limited to a maximum of 20% for direct investment and 10% for other investments. However, direct investment and other investments can bring the highest value of benefits for the pilgrims.
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Investment of the Hajj funds in SBSN or Government Sukuk (sharia-compliant bonds) is too large and does not offer optimal benefit value for the Hajj necessities. The Hajj funds seem like a ‘cash cow’ to finance the State Budget, but its sustainability for the Hajj pilgrims is not taken into consideration. How vicious!
With the increasing public enthusiasm to go for Hajj, the Hajj funds should be managed by the private sector rather than the BPKH or other state institutions.
Private management will be able to professionally offer a higher value of benefit than the BPKH, which has been managing the 2014-2023 Hajj funds for eight years but resulting in Hajj pilgrims’ misery as they have to finance a Hajj cost increase every year.