{"id":98369,"date":"2020-01-28T16:41:37","date_gmt":"2020-01-28T23:41:37","guid":{"rendered":"http:\/\/www.lankaweb.com\/news\/items\/?p=98369"},"modified":"2020-01-28T16:41:37","modified_gmt":"2020-01-28T23:41:37","slug":"state-subsidized-hajj-will-sink-lankan-economy-irrecoverably-2","status":"publish","type":"post","link":"https:\/\/www.lankaweb.com\/news\/items\/2020\/01\/28\/state-subsidized-hajj-will-sink-lankan-economy-irrecoverably-2\/","title":{"rendered":"State Subsidized Hajj Will Sink Lankan Economy Irrecoverably"},"content":{"rendered":"

Dilrook Kannangara<\/em><\/span><\/h2>\n\n\n

A basic Hajj pilgrimage including food and\nnecessities costs upwards of $4,500 from Sri Lanka. Almost the entirety of this\ngoes out of Sri Lanka as foreign exchange. 2,850 pilgrims is the existing quota\nper year as at Hajj 2019.<\/p>\n\n\n\n

Registered Hajj Operators \u2013 Department of Muslim Religious and\nCultural Affairs<\/a><\/p>\n\n\n\n

If 2,850 persons make the pilgrimage annually,\nthe total cost to Sri Lanka is $789 million over 40 years. (A Muslim is\nrequired to perform Hajj during his adult lifetime). The impact of these\ndecisions is not for a year or two, but for the long term.<\/p>\n\n\n\n

It includes a basic inflation of 2% and a\nborrowing cost of 6.75% which is the bond rate at which Sri Lanka borrows in USD.\nThis is an enormous loss to the nation suffering a debt crisis, a forex crisis\nand a widening import-export gap which must be borrowed. <\/p>\n\n\n\n

To put into perspective, this is many times\nmore than the total cost of state sponsored foreign trips of politicians and\ntheir relatives at all levels combined.<\/p>\n\n\n\n

After repeated requests recently, the number\nwas raised to 3,500 which boosts the cost to $1.036 billion over 40 years. That\nis an additional $247 million over 40 years the nation will suffer as a result\nof the 2020 increase.<\/p>\n\n\n\n

There is yet another special request by the\ngovernment of Sri Lanka that is pending to allow an additional 2,000 as a\nspecial quota. If it goes through, a whopping $1.628 billion will leave the\ncountry in the next 40 years. This is a massive increase of $839 million over\n40 years over what would be if 2019 numbers continued. It will sink the Lankan\neconomy irrecoverably as the nation is struggling to repay foreign loans and\ninterest.<\/p>\n\n\n\n

Additionally, there is an election promise to\nsubsidize the Hajj pilgrimage so that Muslims who can\u2019t afford it now will be\nable to make it. In addition to the impact on foreign reserves as calculated\nabove, state subsidies will have a domestic fiscal, monetary and budget impact\ntoo. <\/p>\n\n\n\n

The above calculations exclude purchases made\nby Lankan pilgrims in foreign lands. Their purchases also amount to a few\nhundred million dollars in total over the comparison period.<\/p>\n\n\n\n

It will get even worse as future governments\nwill demand further increases to the quota as the Muslim population grows and\nthe demand to increase the percentage of Hajj performers. Assuming an average\nmale life expectancy of 72 years for a Sri Lankan male, the existing quota of\n2,850 means only 20% are able to perform Hajj in their lifetime. In order to keep\nthe 20%, this quota must be increased annually by Muslim population growth\nwhich is the highest in the island. Further, as politicians have taken up the\ntask of increasing the 20%, it can go up to 14,600 (plus future population\ngrowth) one day in the future to help all Muslim men perform Hajj. What\npoliticians have started is a race between them that can ruin the national\neconomy and forex reserves even more.<\/p>\n\n\n\n

This is also discriminatory. Government cannot\nsubsidize the pilgrimage of just one creed. How about the Buddhists, Hindus and\nChristians? They too have foreign pilgrimages that are affordable only for a\nfew. Buddhists must be subsidized in their pilgrimages to India, China, Bhutan,\netc. Hindus should also get subsidized pilgrimages to a host of Hindu\npilgrimages in India and Nepal. Christians must also get subsidized tour\npackages to the Holy Land, the Holy Sea and Fatima. Otherwise the move amounts\nto the violation of the Constitution.<\/p>\n\n\n\n

To all political parties, please consider these\nfacts and the long term impact before making election promises. It is not your\nmoney. It is the money of taxpayers who are already suffering economic\nproblems.<\/p>\n\n\n\n

Calculations<\/p>\n\n\n\n

40 year cost factor for $1 = [{(1+Inflation) to\nthe power 40 years -1} \/ Inflation]*(1+Inflation)*(1+Interest rate)<\/p>\n\n\n\n

40 year cost factor for $1 =\n(((1.02)^40-1)\/0.02)*(1.02)*(1.0675)<\/p>\n\n\n\n

40 year cost factor for $1 = 65.77<\/p>\n\n\n\n

Total 2019 cost = Persons * Cost per pack<\/p>\n\n\n\n

Total 2019 cost =2,850 * $4,500 = $12,825,000<\/p>\n\n\n\n

Total 40 years cost = $12.825 million*65.77 =\n$843 million<\/p>\n\n\n\n

Total 2020 cost=3,500*$4,500=$15,750,000<\/p>\n\n\n\n

Total 40 years cost = $15.75 million*65.77 =\n$1,036 million<\/p>\n\n\n\n

Total 2020 cost with special\n2,000=5,500*$4,500=$24,750,000<\/p>\n\n\n\n

Total 40 years cost = $24.75 million*65.77 =\n$1,628 million<\/p>\n","protected":false},"excerpt":{"rendered":"

Dilrook Kannangara A basic Hajj pilgrimage including food and necessities costs upwards of $4,500 from Sri Lanka. Almost the entirety of this goes out of Sri Lanka as foreign exchange. 2,850 pilgrims is the existing quota per year as at Hajj 2019. Registered Hajj Operators \u2013 Department of Muslim Religious and Cultural Affairs If 2,850 […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":true,"template":"","format":"standard","meta":{"footnotes":""},"categories":[44],"tags":[],"class_list":["post-98369","post","type-post","status-publish","format-standard","hentry","category-dilrook-kannangara"],"_links":{"self":[{"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/posts\/98369","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/comments?post=98369"}],"version-history":[{"count":0,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/posts\/98369\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/media?parent=98369"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/categories?post=98369"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/tags?post=98369"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}