Saudi driving decree: no immediate impact for female workers, says report

An Oxford Economics and ICAEW report says that wage expectations will have to be address before any substantive changes
Allowing women to drive in Saudi Arabia will save many families considerable sums but is unlikely to have an immediate impact on female employment
By Bernd Debusmann Jr
Thu 23 Nov 2017 11:09 AM

Allowing women to drive in Saudi Arabia will save many families considerable sums but is unlikely to have an immediate impact on female employment, according to a new regional outlook from Oxford Economics and the Institute of Chartered Accountants in England and Wales (ICAEW).

The Oxford Economics/ICAEW Economic Insight Middle East Q4 2017 report indicates that allowing women to drive may save families as much as $1,000, but is unlikely to have any immediate impact on the 80 percent unemployment rate among Saudi women.

“For a start, it’s not totally clear what the changes are, how they’ll get their license, and who will teach them to drive, for example,” Tom Rogers, ICAEW economic advisor and associate director of Oxford Economics’ macroeconomic consultancy for EMEA told Arabian Business.

“There are still lots of social constraints and we’ll have to see how that will work in practice.”

For the lifting of the ban to have a more significant effect, Rogers notes, steps must be taken to narrow the gap in wage expectations among Saudi workers and expats living in the kingdom. According to the report, Saudi workers, primarily in public sector entities, receive as much as four times as much as their expat counterparts.

“Except at the very top skill sets, lawyers and doctors, Saudi workers tend to command far higher wages,” he noted. “If they aren’t highly skilled, they’ll be able to drive but will be competing for jobs with expat workers [earning] much lower wages.

“This is a more structural problem within the Saudi labour market, but those [wage gaps] can be narrowed from above and below. But fundamentally, the issue is the type of job that young Saudi workers are willing to take, as generations have been expecting government jobs and those won’t be available in such numbers going forward.”

Additionally, Rogers said it is still too early to know what the economic impact of the kingdom’s ongoing anti-corruption drive will have.

“We have to see the full process. From an outside perspective, businesses will need to see those measures taken in a transparent way,” he said.

“Businesses will need to be confident that they can deal with businessmen in the Saudi economy without worrying about the impact of further such measures down the road.”

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