No quick fix on nationalisation

While the public sector traditionally offers greater job security for its workers, that very fact ensures that such jobs are in finite supply. Not every Gulf national is able to counton a government job, car and pension - and that has been a good thing as a percentage of the population has chosen, or been forced, to move beyond a state-paid salary.As a result we have witnessed an entrepreneurial explosion across the region. Many of today's business leaders built their empires from the ground up, relying on their own ingenuity and perseverance to take advantage of mushrooming Gulf economies.

The difficulty comes now, as markets contract for the first time in a decade, and so the opportunities offered by the private sector begin to look considerably less attractive, dangerous even. In the midst of the global financial meltdown, people are understandably wary of taking risks and starting out on their own - after all, entrepreneurism could be confused with speculation, which is a bad word.

Thankfully, this extreme caution will not last and confidence will return. In the meantime, however, the safety-first option of a government position becomes ever more appealing, particularly when we consider the challenges faced by young graduates spilling out of the Gulf's schools and universities.

The problem is particularly pressing in Saudi Arabia, where a young population is scrapping it out for what few jobs are on offer. More than 60 percent of Saudi nationals are estimated to be under 18 years old, which will lead to a 112 percent increase in the total workforce over the next five years. Someone has got to employ those extra few million young men and women and if the government can't, goes the mantra, then why doesn't the private sector?

At the moment, 83 percent of all jobs in the private sector are held by foreigners, a statistic which suggests that there should be ample opportunity to replace sections of the imported workforce with those that hold a Saudi passport. Yet Saudi dramatically reducing its dependence on foreign workers is a little like the US dramatically reducing its dependence on Gulf oil - a smart idea in theory; a long, painful process in practice.

At a time when thousands of private sector jobs are being shed each week across the region, the most valuable employees are those with a sufficient education. Yet despite the best efforts of Saudi's government to overhaul and modernise the Kingdom's outdated education system, it will be a good few years before the benefits are reflected in the skillsets of its home-schooled graduates.

Furthermore, while generous budgets will enable students to develop their abilities in state-of-the-art classrooms, much of that money risks being squandered if there is no independent oversight of the Kingdom's vocational training schemes.

So it's not that firms do not want to hire nationals, or that Saudis do not want to work. It's just that there is no quick fix for those young Saudis pouring onto the job market. They want to be successful and they are willing to work hard to achieve that success - at least until the private sector door is slammed in their face. Right now, the message pinned to that door is stark: you don't have the skills, and we don't have the jobs.

Andrew White is the editor of Arabian Business.