Impact & Achievements: Tabung Haji

The impact on society is obvious. Th does not just involve itself in muamalat activities, but also in ibadah activities where it is responsible in ensuring the welfare of the pilgrims. The Th Act 1995 clearly states that its function, among others, is “to administer all matters concerning the welfare of pilgrims and to formulate policies in connection therewith.”

Besides supporting the stock and Islamic Money Market, Th creates a lot of business opportunities through its direct investments spanning into three main sectors, i.e. plantations, project management and services, Th subsidiaries open up scores of business prospects which in turn provide more business opportunities to others. This multiplier effect creates more wealth per ringgit saved compared to those days when savings were under the pillow.

Th itself is providing employment to more than 1000 Muslims all over the country. The remuneration in Th is just as competitive as other institutions. The employment opportunities and working experiences in Th create a new breed of Muslims who are conversant in both muamalat transactions and Hajj management.

There are many more impacts that Th have on Muslim society in Malaysia such as fulfilling the national economic development policy especially in helping to improve the status of the natives who are mainly Muslims and also as a symbol of economic strength of Malaysian Muslims.

It would be useful if we give here excerpts from the appraisal of Islamic Development Bank on Th that sheds some light on its impact and how to go about capitalizing its strengths in confronting future challenges.

Tabung Haji which has been in operation since 1963 is viewed as one of the most successful experiments in the management of Hajj affairs in the Islamic Ummah. Despite its success, this model has not yet been replicated in other Muslim countries. So it is worth exploring some of the underlying causes and factors which can serve as guidelines and lessons for other member countries of the Organization of Islamic Conference (Oic) to follow. These factors can be explained in terms of the following ten political, psychological, economic, social and religious factors:

1. Political will with a social vision: Tabung Haji is an extraordinary example of how a “political will” with a social vision can be translated into an action program backed by an appropriate technical knowledge. As indicated earlier that the pioneering study made by royal professor Ungku Abdul Aziz in the 1950s captured the imagination of the then prime minister of Malaysia, the late Tunku Abdul Rahman, a man with political vision. He immediately saw the tremendous possibility of development of Hajj management as an institution and through an act of parliament, after due consultation from the view points of shari’ah, Tabung Haji was established. This is how a “political will” was translated into an action program backed by a sound technical study.
2. Need to achieve at the community level: The success of Tabung Haji may be attributed to a great extent to strong Bumiputra psychological factor demonstrating that indigenous dominant Malay Muslim community can succeed in business enterprise and corporate management involving integration of Islamic values with corporate philosophy and culture. It may be noted here that indigenous Malays form about 55% of about 17.6 million populations in 1991. During the 60’s there was a growing feeling that indigenous Malays were being by-passed by the non-indigenous ethnic groups during the rapid pace of post-independence economic and social development.

Undoubtedly, the imbalance between the indigenous and the non-indigenous ethnic groups was the result of the discontinuities in the social and economic structure of the country arising from almost a century of British colonial rule. However, political demands for corrective equity were growing more insistent and imperative. The establishment of Tabung Haji in 1969 may also be seen against this background. In a racial competitive environment, there is a push factor, responsible for Muslim solidarity. The success of Tabung Haji demonstrates the actualization of the collective “Bumiputra” will.

1. Monopoly business: Tabung Haji has an exclusive right to deal with the management of Hajj affairs in Malaysia, thereby ensuring the steady flow of pilgrims’ deposits each year. This monopoly status is actually derived from the provision within the Tabung Haji Act, which precludes any other individual or entities to provide Hajj services in Malaysia without the consent from the minister-in-charge of Tabung Haji. Therefore, this Act helped in building up the institution and saved the infant organization from unnecessary competition from other institutions in the country.
2. Government guarantee: The government of Malaysia provides guarantee to each depositor, thus adding their confidence in the organization. Besides, Tabung Haji encourages savings not only for the purpose of pilgrimage but also for other needs of depositors. Thus it has been successful in attracting the savings of potential Muslim depositors.
3. Flexibility of deposits: The simplification of procedures of deposits as well as cooperation with other similar institutions (like post offices) has enabled Tabung Haji to mobilize tremendous savings for investment purposes. The flexibility has been made possible due to governmental support for ensuring the services of agencies other than Tabung Haji. This is another example how a determined administrative will can be translated into.
4. Diversification of investment: The diversity of investment in a variety of economic enterprises minimized the risk and ensured the continued dividend to the depositors at a competitive rate.
5. Professional cadre & participatory management: Since its inception, Tabung Haji has made concerted effort to develop a highly motivated cadre of professional people, capable of achieving the objective for which Tabung Haji is established. The participatory and service oriented management concept under which Tabung Haji has been operating has increased the efficiency of the organization considerably. Depositors, pilgrims and the staff can easily see the ceo to voice their grievances. This has helped to establish good rapport among the depositors, pilgrims and the public.
6. Non-partisan approach by the government: Since its inception, there is evidence to support that Tabung Haji has emerged as a genuine people’s organization. The non-political and nonpartisan attitude of the government also allows the management to achieve its goals and objectives for the benefit of its depositors and the pilgrims.
7. Coordination with other agencies & government: Over the years, Tabung Haji has evolved a sound strategy of coordination and cooperation both at home and abroad. For the purpose of Hajj work, Th coordinates with other agencies, whether government or private, like the registration department, ministry of health, ministry of national unity and social development and airline companies. With such coordination these agencies are involved and have become part and parcel of the Hajj operation. In addition, Th has established a close cooperation with the Saudi government and other authorities in Saudi Arabia, to take advantage of the improved facilities provided by the Saudi government for the Hajj operation. Th has maintained close relationship with the mass media for dual purpose of disseminating information to the public about Th and giving feed backs about public concerns, issues and problems.
8. Evolving efficient system of management: Over the years, Th has been able to evolve a system of management which ensures:

1. Separation of power between the governing board, the ceo, the investment panel as well as the government auditor general.
2. Decentralization of authority, thereby cutting down of unnecessary red-tapes and bureaucratic hurdles.
3. Introducing the system of accountability.
4. Encouraging full use of the new and modern technology computers, telefax, Internet and others which have helped to further improve the financial operation and Hajj services management.

Source: Towards Islamic Banking: Experience and Challenges, Institute of Policy Studies. Republished with permission.