Ramadan is the holy month for Muslims, and what follows it is the long marathon of Şevval, a time for Muslims to carry out one of the Five Pillars of Islam, the pilgrimage to Mecca, or Hajj. It is incumbent upon all able-bodied Muslims who can afford to make the journey, wherever they are on the globe, to visit Mecca and Medina in Saudi Arabia once in their lifetime during the Hajj season.
The visit to the holy land for Muslims to become hajji has morphed into a massive annual pilgrimage, complete with an elaborate Saudi visa scheme based on an allotment per country for entry. Saudi officials are expecting 8 million people to visit Islam's holy sites in 2009.
Growing demand from among the 1.8 billion Muslims worldwide has meant a boom in several sectors of the Saudi economy, including the tourism and services sectors, as a result of the Hajj pilgrimage. One example is the notable expansion in the real estate sector, expected not only in the holy cities of Mecca and Medina but also in other Saudi cities like Jeddah, on the coast of the Red Sea.
According to official records 1.73 million foreigners fulfilled their hajj obligation last year, in addition to 750,000 Saudi citizens. Experts point out that returns on investments made in the Saudi housing and real estate sector is guaranteed and has minimal risks. To give an example, the rate for a room with the view of Kaaba at the Mecca Hilton Tower can reach up to $8,000 during peak season.
Officials also express that development and investment potential is not only limited to the real estate sector; with 131,000 pilgrims entering the country last year by land, and an additional 23,000 by sea routes, the incentive to invest in roads, airports, seaports, hospitals, clinics and other side sectors is growing. The real estate sector comprises 5.1% of Saudi Arabia's GDP and it is expected that the sector will grow by 5.8% this year. According to a report published by the Dubai based Proleads research firm, there are 812 active projects, worth $543 billion, in the real estate, entertainment and infrastructure sectors in Saudi Arabia. Despite the financial crisis only 4% of the projects have been either postponed or cancelled. More recent reports indicate that the monarchy has pledged to spend $400 billion until 2013 to upgrade its infrastructure.
Unlike other Gulf states, the interest in the real estate sector in Saudi Arabia is fueled by domestic demand. According to data only 35% of Saudis own a house and in five years time, 1.5 million new houses are needed to meet what is seen as an inevitable demand by a young generation moving out and up. Analysts suggest that between 60-70% of the Saudi population is under the age of 30-a lucrative market for investors, but a potential socio-economic and cultural nightmare for the Saudi monarchy unable to keep up with a disgruntled and unemployed youth.
Statistics suggest that the Catholic, Protestant and Jewish sectors comprise the vast majority of the global faith-based tourism market, but the Hajj cannot be dismissed. From across the far corners of the globe, Muslims flood to Mecca and Medina annually, approximately 5 million for the Umrah, or the ‘small' pilgrimage that can be performed any time during the year, and 3 million for the Hajj. When transportation, accommodation, food and shopping in the holy lands are tallied up, the bottom line amounts to a nearly 20 billion Euro ‘Umrah and Hajj Economy.'
Faith, Ramadan and the Economy
Muslims define Mecca as "the heart of the Islamic World" and Medina as "the brain of the Islamic World". However, businesspersons and merchants see Mecca and Medina as "strongholds of the economy." While the world is still reeling from the impact of the financial crisis, Mecca and Medina have successfully held on to a steady economic record. Mecca, a volcanic city surrounded by mountains of concrete and steel, has experienced an extraordinary economic galvanization, especially during the religious tourist high season and the Hajj, which falls in November this year. Over the past years, hotels were booked, shops full of customers and business boomed.
Beyond the oil-rich Gulf states, the global financial downturn has dampened spirits this year across most parts of the Muslim world. Having been hit hard by job cuts, rising expenses, and lost businesses, families are concerned about lowering their household spending while preparing a decent meal for iftar, the daily meal to break the fast at sunset. In Algeria, some 1.2 million disadvantaged families will receive state help this year to cope with the costs of the holiday. Communities affected by dry weather and insufficient monsoon rains this year have pushed parts of India to the brink of drought, putting upward pressure on food prices. During Ramadan, concerns about food price manipulation typically emerge due to higher demand. As a precautionary measure, it was reported that the United Arab Emirates last month signed agreements with supermarket chains to offer discounts of up to 60 percent on food items during Ramadan. The Ministry of Economy has urged bakery and restaurant owners to comply with its demand to decrease prices and provide the ministry with price lists. Complaints over conflicting reports in Egypt regarding price hikes and cuts on food items has hijacked media attention lately. Prices were fixed back in 2007 when the global prices of basic commodities skyrocketed due to unprecedented inflation.
Worship and trade have always gone hand-in-hand in the Muslim holy lands. For Arab rulers, holy water Zemzem and the Prophet's Areca nut have been a never ending source of income for thousands of years. It is claimed that seven Areca nuts per day is the key to well being and drinking its seeds after roasting them also helps. Needless to say that the price of such a faithful fruit, which also bears the name of the Prophet, should match its fame: approximately 53 USD/kg.
Mescid-i Nebevi is the heart of Medina, which was founded on a flat plateau. 1.5 million Muslims can pray here at the same time. The Saudi government is planning to demolish hotels in the proximity of Mescid-i Nebevi in five years time. Construction of new hotels, which would replace these five star hotels, is already underway. Medina looks like Manhattan in the desert with its wide boulevards, squares, shopping centers and Areca nut fields.
According to belief, the first signs of life in Mecca trace back to Adam. The history of trade also dates back to those times. After the construction of Kaaba by Adam until the time of the Deluge, Kaaba and its proximity became a center for worship. People from every region of the world where human life existed travelled to Mecca, making it one of the vibrant economic centers of the world.
Following the Deluge, Islamic scholars recount the first signs of life in Mecca starting with Prophet Abraham's wife Hacer and his son Ismail. According to Islamic legend, when Prophet Abraham left Hacer and Ismail in the Mecca Valley on God's command, he could leave with them only some water and dates. He prayed "Allah, direct the people's hearts on the earth towards them and provide them with every type of food on the face of the earth". Following this prayer, merchants of the Kahtan tribe of Yemen were among the first settlers in Mecca. These merchants sold goods from India and Yemen to Mesopotamia and goods from Mesopotamia to highly populated India and Yemen. In this period of history, Mecca became the most significant trade hub in the world. It is believed that when the Kaaba was reconstructed by Prophet Abraham and Ismail by God's express command, Mecca once again experienced the flow of people for worship.
Large groups of people who came for the Hajj also exhibiting their regional products at fairs like Ukaz and Zulmecaz. During the period of Prophet Muhammad, Mecca maintained its status. Much of this historical trend has continued with the shifting of production to the cities like Basra, Baghdad and Damascus.
Since Mecca is the centre for Hajj and Umrah rituals, Mecca is still an important city, where huge volumes of trade are made, even today. The thousand years old trade and worship dialectic is feeding Saudi Kingdom.
Certainly, when trade and worship are not enough, oil and military power come into play. Arab leaders are aware that as much as they owe their wealth to oil, they owe their sovereignty to a Western military presence in their region. Authoritarian rulers of oil rich Muslim Arab countries like Saudi Arabia, the UAE and Kuwait, harbor almost more foreign soldiers than those in Europe. Certainly, the reason for this is to make people accept the sovereignty of their rule rather than protect the security of their countries or centers of worship. Whoever has control of the weapons stockpile usually has the last say. The hypocrisy is to claim to differentiate between the oppressive rulers of the region based on their proximity to an elusive democracy.
And differentiating between Muslims as well: as either terrorists or engines of a 20 billion Euro lucrative industry, who circle the Kaaba.