Analysis

The Industry Behind This Muslim Holiday Sinks Millions Into Debt

While ordinary Muslims will go into deep debt for Eid al-Adha, the Feast of the Sacrifice, some – like the Saudi government and Chinese manufacturers – enjoy a windfall

Muslim pilgrims circumambulate the Kaaba, the cubic building at the Grand Mosque, during the hajj pilgrimage in the Muslim holy city of Mecca, Saudi Arabia, August 13, 2019.
Amr Nabil / AP

The Muslim holiday of Eid al-Adha– the Feast of the Sacrifice – which was marked this week, generates considerable excitement and joy in the Arab world. More than two million worshipers make their way to Mecca, Saudi Arabia in order to carry out the religious duty of the hajj, millions of lambs are slaughtered to end up on barbeques, workers enjoy a five-day vacation, families head out for picnics and fill up shopping malls.

This is also a time of joy for bank managers, livestock farmers, butchers, tourism agencies specializing in hajj trips, and for Saudi Arabia, which is expected to rake in between $7 billion and $8 billion dollars in less than a month.

This, too, is also the season in which millions of households will take out huge loans which will take an entire year to repay. According to polls conducted by chambers of commerce and government authorities, a poor family will spend 60% of its income on holiday expenses, including the purchase of a sheep or goat, or ready-made meat and presents for family members.

>> Read more: As hundreds of thousands descend on Mecca, Saudis warn against politicizing hajj     

The average family will have to spend 30-40% of its income during the holiday, not including the cost of the pilgrimage.  This figure is taking its toll on meat markets where merchants are complaining about a significant reduction in the number of clients – a drop of 15% to 20% compared to last year – which also reflects the rise in the price of sheep and goats.

A particularly sharp price hike was felt in Syria, which lost about half of its livestock and 60% of its poultry during the years of war in addition to a meteoric rise in the price of fodder, straw and animal medications which went up by 150%-170%, fueling a drastic rise in the price of meat.

In the past, the government of Syria would set a quota limiting the export of goats and sheep during the holiday period, and could in that way exert at least limited control on the number of heads of livestock available for local consumers. This year there was no such government decree, and livestock farmers prefer to export their animals to neighboring countries like Jordan, Lebanon and Iraq, where they will get a much higher price – and in so doing, reduce the amount of livestock available for the local market.

Before Syria's civil war, livestock constituted about 40% of the total agricultural production in the country. It employed about 20% of agricultural workers and brought some $450 million in sheep and goat exports. With the war and the blow to the industry, exports plummeted to less than half their pre-war average, with most of the damage concentrated in the northern districts which produce much of the country’s crops and livestock.

In contrast to Syria, Morocco is actually expecting a significant increase in its sheep and goat industry, which is expected to reach $1.4 billion.

Saudi Arabia is of course the big beneficiary of the holiday — it charges $530 per permit for each pilgrim entering the country and limits their entry to only attending hajj ceremonies. Every Muslim state is allocated a fixed number of entry passes, according to a demographic formula of 1,000 per million citizens.

Each state has its own rules and regulations for issuing the entry passes, with some using a lottery, others passing them on to Saudi-approved travel agencies and others, like Tunisia, are keeping it under their own control, thus determining who can attend the hajj.

Saudi Arabia waives the entry visa for first-time pilgrims, and also gives out free passes to bodies with which it wishes to cultivate good ties. It gave 2,000 free entry passes to the Egyptian parliament as well as to many journalists and professional associations. 

Saudi Arabia also obligates pilgrims to choose travel agencies and accommodations from a list of companies that pay it to obtain a business license. It also operates a fleet of 50,000 buses that transport the pilgrims from the airport to the center of the Mecca and to holy sites, as well as to air-conditioned tents available to those who can’t afford a hotel.

In return for each of these services, the kingdom charges amounts that add up to thousands of dollars. According to figures collected by tourist agencies the cost of a pilgrimage ranges from $1,500 to $4,500 dollars, while those who prefer to fly in and stay in a luxurious hotel can expect to spend between $25,000 and $30,000.  Sellers of souvenirs and gifts also do well during the pilgrimage, since any pilgrim who takes a trip that typically lasts two weeks to a month is expected to bring back gifts to those at home.

Paradoxically, those who profit most from the gift industry are the Chinese manufacturers who provide most of the children’s toys, electric appliances and models of the black rock and other holy sites. Every year the Saudis demand that the vendors to buy some of their wares from manufacturers in Arab countries in order to make sure these countries get some of the money back that their citizens are spending on the pilgrimage. But it doesn’t seem as though they have found a cheap and reliable alternative to what the Chinese producers provide to Muslim worshipers.

In the long-term plan, entitled Vision 2030, developed by Crown Prince Mohammed Bin Salman, Saudi Arabia is expected to host 30 million pilgrims a year, including many who arrive before or after the hajj season. That influx should bring some $50 billion dollars into the kingdom’s coffers. The question is whether by then there will be enough sheep to feed the tens of millions of pilgrims.