ISEF 2020 Hajj Indonesia Post Covid 2020.pptx

ISEF 2020 Hajj Indonesia Post Covid 2020

1. Indonesian Hajj Fund Situation During Pandemic Covid-19 Dr. Anggito Abimanyu Faculty Member, Economics Dept. Gadjah Mada University, Yogyakarta DG Hajj and Umrah , MORA, GoI (2012-2014) Executive Head, Indonesian Hajj Fund Agency, GoI (2017-now) ISEF 2020 Jakarta, 27 October 2020

2. Outline 1 2 3 4 Introduction to the Indonesian Hajj Fund Agency Indonesian Hajj Fund during Pandemic Covid-19 Financial Performance during Pandemic Covid-19 Challenges and Future of Indonesian Hajj Fund

3. Morocco 31.000 Algeria 36.000 Turkey 79.000 Iran 86.500 India 170.000 Bangladesh 127.198 Pakistan 179.210 Egypt 108.000 Nigeria 79.000 Indonesia 221.000 Saudi Arabia 1 2 3 4 5 Source: Al Jazeera The Highest Number of Hajj Pilgrims outside Saudi in 2019 1. Indonesia 2. Pakistan 3. India 4. Bangladesh 5. Egypt 6. Iran 7. Turkey 8. Nigeria 9. Algeria 10. Morocco Hajj 3

4. The Highest Number of Umrah excl Saudi in 2019 1. Pakistan 2. Indonesia 3. India 4. Egypt 5. Algeria 6. Yemen 7. Turkey 8. Malaysia 9. Iraq 10. Jordan Source: Arabnews Algeria 364.707 Turkey 306.987 Iraq 270.995 Yemen 334.186 Egypt 535.861 Pakistan 1.590.731 India 643.563 Jordan 200.857 Indonesia 946.962 Malaysia 274.066 1 2 3 4 5 Umrah 4

5. 5 Indonesian Hajj Fund Man. Agency or BPKH Government Affiliated Public Institution BPKH is the Indonesian Hajj Fund Management Agency directly under the President Total current Asset (Oct, 2020): Rp . 135 Trillion or equivalent to US$ 9,6 billion Structure of the Agency 1. Chairman and 7 member of Supervisory Board 2. Head and 7 member of Executive Board Established in June 2017 (Law Num 34/2014, Pres. Decree 110/2017, Gov. Reg. 5/2018 ) Hajj Fund Management Agency

6. BPKH Mandate to Provide Optimal Return with Sharia Compliance and Manage Financial Risk 01 02 03 04 T O S W Principles: optimal, sharia, efficient, safe and liquid Placement in the Indonesian Sharia Bank (mostly mudharabah ); 30%; Hajj-related Investment in Indonesia and global: Portfolio: sukuk, equity, portfolio investment Gold (5%) Direct Investment (20%) Other Investment (10%) Total investable funds: Rp . 135 Trilion (9.6 Bio US$ ), increase by around Rp . 10 Trilion or 716 Mio US$ per year.

7. Usage of the BPKH Return BPKH Return Support Hajj Operation Hajj Subsidy (hotels, food, naqabah , ArMuzNa , education, etc ) Deposits to Waiting List Pilgrim in the form of Virtual Account (% of Return) Allocation for Social Funds (% of Return) Operational Support of BPKH (max 5%)

8. Indonesian Hajj and Umrah Situation during Pandemic Covid-19 International Umrah visitors have been stopped since March 2020; The KSA prohibits foreigners from performing the 2020 hajj; Global economy entering a technical recession with negative growth projection, volatile exchange rates, lower interest rates, uncertainties in the global investment climate; Hajj new registration was reduced by half, while hajj withdrawal increased due to Covid .

9. Government Policy Responses to Pandemic Covid Cancel Hajj visitors to Saudi for hajj safety reason , and prioritized the for next year hajj season (2021) The pilgrim-2020 waiting list given “full” financial return . All pilgrims waiting list are given partial return through their virtual accounts. The Government and BPKH provide a stimulus for pilgrim guides and Islamic teachers impacted by pandemic covid-19.

10. Government Policy Responses to Hajj Fund Issues Issued a law to exempt the withholding tax to hajj fund placement and investment. Enacted a foreign hajj investment regulation to guide BPKH to invest hajj funds globally. Improving the process and procedures for determining the realistic cost of performing Hajj (BPIH) , including terms of payment and investment allocation.

11. 11 * Actual, ** Projection, *** Target (with normal Hajj season) BPKH Financial Performance During Pandemic, 2019-2021 No Hajj Fund 2019* 2020** 2021*** 1 Total Fund ( Rp Trillion) 124,32 (US$ 9,2 bio) 140-142 (US$ 10 bio) 148 (US$ 10.5 bio) 2 Financial Return ( Rp . Trillion) 7.4 (US$ 548 mio ) 7.2-7.4 (US$ 528 mio ) 7.8 (US$ 549 mio ) 3 New Registration (000 Pilgrims) 740 390-400 725 4 Number of Cancelation (000 Pilgrims) 41 45-50 40 5 Yearly Down Payment ( Rp Trilllion ) 19,2 (US$ 1.4 bio) 10,1 (US$ 0.7 bio) 18,7 (US$ 1,3 bio)

12. How BPKH Manage Hajj Funds During Pandemic Renew the 5 year plan and financial target of BPKH Manage excess funds due to hajj cancelation, prudently Provide a financial incentives for waiting list hajj 01 02 03 4 Provide a stimulus for hajj guides, Islamic teachers and others impacted by covid-19 Promoting “haji muda ” more aggresively , a program to encourage young moslem to register for hajj as early as possible Redesign organizational structure, create an International Investment Division, and improve human capital quality based on the new normal situation Respond to a tax exemption policy and other financial incentives to BPKH 5 6 7 8 Prepare for a better hajj fund allocation next year with improved direct investment strategy, particularly in KSA

13. Priorities in BPKH Operation during Pandemic B D C A F E Continue to limit WFO and physical meetings, and implement health protocol operation . Design new office and organization to implement new normal situation. Strengthen domestic investment and collaborate with sharia banks and other Islamic Organizations. Investment strategy in KSA Synergize with Indonesian Hajj Mission, and KSA Cooperate with IsDB Cooperate with Other Hajj Missions Finalizing all operational regulations on BPKH investment, risk aspects, financial procedures, etc Digitalize BPKH Operational and Business Processes .

14. Challenges and Future of Indonesian Hajj Fund Agency/BPKH During Pandemic Covid-19 Uncertainty with regards to Umra and Hajj 2021 Anticipating Global Economic Crisis Finding Investment opportunities and partners in KSA (Mecca and Medina), Institutional Cooperation with/ among Hajj Missions Moving toward efficient and effective hajj management through sustainable financing and digitalization business processes