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Ramadan 2021 Sets Stage for Recovery of Hajj, Umrah Economies

Experts are predicting significant recovery for Hajj and Umrah businesses during Ramadan 2021, Asharq Al-Awsat
Experts are predicting significant recovery for Hajj and Umrah businesses during Ramadan 2021, Asharq Al-Awsat
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Ramadan 2021 Sets Stage for Recovery of Hajj, Umrah Economies

Experts are predicting significant recovery for Hajj and Umrah businesses during Ramadan 2021, Asharq Al-Awsat
Experts are predicting significant recovery for Hajj and Umrah businesses during Ramadan 2021, Asharq Al-Awsat

A little over a year after the coronavirus pandemic having hit markets around the world, signs of recovery are on the horizon for pilgrimage-centered economies in the Saudi cities of Makkah and Medina.

Experts are predicting a 40% recovery for Hajj and Umrah businesses during this year’s Ramadan season, which will last from mid-April to mid-May.

The number of foreign pilgrims expected to arrive in the Kingdom, which is home to Islam’s holiest sites, has increased substantially in 2021, compared to 2020.

Umrah is an Islamic pilgrimage to Makkah and Medina undertaken any time of the year. The rite attracted 19 million people in 2019.

Saudi Arabia halted the pilgrimage at the start of the pandemic in March 2020 but restarted it in limited numbers later in October.

“Although there are many precautionary measures that will limit the number of pilgrims gathering at holy sites, this Ramadan represents a vital transitional stage and tests how relevant sectors can gradually, but safely, return to working in full capacity,” said Muhammad Burhan, an active council member at the Mecca Chamber of Commerce & Industry (MCCI).

Burhan also noted that recovery in Hajj and Umrah markets is directly proportional to the rate of vaccinations introduced to potential pilgrims worldwide.

While Ramadan will slowly restore market activity in Makkah and Medina to its pre-pandemic rates, Burhan noted that the road towards full recovery will be revealed during the 2021 Hajj season, which starts in July.

Burhan also revealed that placing the pandemic under control and countries vaccinating their citizens will lead to a breakthrough that will inspire Muslims worldwide to make pilgrimage to holy sites in Saudi Arabia.

It is worth noting that the Kingdom launched its vaccine campaign in December and has administered more than four million doses so far.

More than 400 vaccination centers have opened since the nationwide campaign began with citizens and residents able to register for inoculations through the ministry’s Sehhaty app.

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Auto Industry Rocked by Trump's 25% Tariffs on US Imports

New Toyota vehicles are stored at the Toyota Logistics Service Inc., an imports processing facility at the Port of Long Beach in Long Beach, Calif., Wednesday, March 26, 2025. (AP Photo/Damian Dovarganes)
New Toyota vehicles are stored at the Toyota Logistics Service Inc., an imports processing facility at the Port of Long Beach in Long Beach, Calif., Wednesday, March 26, 2025. (AP Photo/Damian Dovarganes)
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Auto Industry Rocked by Trump's 25% Tariffs on US Imports

New Toyota vehicles are stored at the Toyota Logistics Service Inc., an imports processing facility at the Port of Long Beach in Long Beach, Calif., Wednesday, March 26, 2025. (AP Photo/Damian Dovarganes)
New Toyota vehicles are stored at the Toyota Logistics Service Inc., an imports processing facility at the Port of Long Beach in Long Beach, Calif., Wednesday, March 26, 2025. (AP Photo/Damian Dovarganes)

US automakers and their global rivals were rocked on Wednesday by President Donald Trump's announcement that he would impose 25% tariffs on all vehicles and foreign-made auto parts imported into the United States.
The new levies, if kept for an extended period, could add thousands of dollars to the cost of an average US vehicle purchase and impede car production across North America.
That will be because of the intertwined manufacturing operations developed by car makers across Canada, Mexico and the United States over the last three decades.
Nearly half of all cars sold in the US last year were imported, research firm GlobalData says, according to Reuters.
In response to the news, shares of General Motors slumped 8% in after-market trading. Shares in Ford and US-traded shares of Chrysler-parent Stellantis fell about 4.5% each.
In Asia, shares in Toyota Motor, Honda Motor and Hyundai Motor all fell between 3% and 4%.
Shares in Tesla, which makes all the cars sold in the United States locally but with some imported parts, were down 1.3%.
Trump said the duties announced on Wednesday could be a net neutral or even good for Tesla, adding that its CEO, and his close ally, Elon Musk, did not advise him regarding auto tariffs.
In a post on X following the news, Musk said the tariffs would also affect Tesla.
"This will affect the price of parts in Tesla cars that come from other countries," he wrote in another post on X. "The cost impact is not trivial."
The companies did not immediately return emails seeking comment.
Trump's tariffs and threats to impose them have sowed uncertainty in businesses and roiled global markets since he returned to the White House in January.
On Wednesday, Trump reiterated that he expected the auto tariffs to prompt automakers to boost investment in the United States, instead of Canada or Mexico.
Autos Drive America, a group representing major foreign automakers such as Honda, Hyundai, Toyota and Volkswagen , said the "tariffs imposed today will make it more expensive to produce and sell cars in the United States, ultimately leading to higher prices, fewer options for consumers, and fewer manufacturing jobs in the US."
Automakers in North America have largely enjoyed free trade status since 1994. Trump's 2020 US-Mexico-Canada Agreement (USMCA) imposed new rules designed to spur regional content production.
After clamping tariffs of 25% on Mexico and Canada in early March, Trump allowed a one-month reprieve for vehicles produced in compliance with the terms of his USMCA, which benefited American companies.
The new rules do not extend that reprieve.
"Companies that have invested hundreds of millions and billions of dollars on plants in Canada and Mexico will likely see their profits cut dramatically over the next few quarters, if not into a couple years," said Sam Fiorani, analyst at AutoForecast Solutions.
"We're going to look at adjusting our sales and production forecasts because this will throw everything into chaos."
The White House said that 25% tariffs on automotive parts imported to the US would take effect no later than May 3, taxing key items such as engines, transmissions, powertrain parts, and electrical components.
Importers of automobiles under the USMCA will get the chance to certify their US content so that only non-US content is taxed, the White House said.
Before the unveiling of the new tariffs, Cox Automotive, an automotive services provider, predicted they would add $3,000 to the cost of a US-made vehicle and $6,000 on vehicles made in Canada or Mexico, without exemptions.
If tariffs go through, by mid-April Cox expects disruption to "virtually all" North American vehicle output, leading to 20,000 fewer vehicles a day, or a hit of about 30% to production.
The United Auto Workers union, which represents factory workers at Big Three Detroit automakers, praised Trump's action.
"With these tariffs, thousands of good-paying blue collar auto jobs could be brought back to working-class communities across the United States within a matter of months, simply by adding additional shifts or lines in a number of underutilized auto plants," UAW President Shawn Fain said in a statement.