The Management of Pilgrimage Funds

Indonesia has the highest number of hajj pilgrims globally, which carries the risk of fraud and scandal. This book provides a critical examination of the efficiency and effectiveness of hajj funds management in Indonesia, utilising two methods - a conventional doctrinal approach and a comparative approach.

The book asserts that the institutional reform implemented to address corruption in the utilization of hajj funds has not fully achieved its intended objective. The argument is that the anti-corruption goal has been hindered by the continued influence of MoRA over the BPKH. Despite the implementation of certain procedures and mechanisms in response to corruption scandals, particularly in hajj operational disbursement, there are still significant opportunities for rent-seeking in the areas of accommodation and air transportation expenditures, leading to inefficiencies. Moreover, the Maslahah Program, financed by the investment returns of the Ummah Perpetual Fund, has allocated funds for non-hajj activities, which raises concerns regarding both good governance and religious adherence. The reforms proposed in the book offer a way to transform BPKH into an Indonesian hajj bank in order to be able to maximise the investment return under international standards, such as the Basel III accord, and comprise proposals to amend Law No. 34 of 2014, such reforms consider the principles of effectiveness and efficiency.

This book holds significant relevance for policy makers, academics, researchers, and professionals in the field, providing them with valuable insights into developing new approaches and establishing a hajj funds bank that aligns with international best practices.