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Saudi Arabia is stepping up efforts to lower unemployment among its citizens by fining private sector firms that employ more foreigners than Saudis, the labour ministry said in a statement carried by state news agency SPA on Tuesday.
The policy, which will be implemented at the start of the new Islamic year on November 15, will require private companies with majorities of foreign workers to pay a fee of SR2,400 ($640) a year for each excess foreigner.
The fines will not be applied for foreigners with Saudi mothers, citizens of other Gulf Cooperation Council countries - the UAE, Kuwait, Oman, Qatar and Bahrain - or household help, the statement said.
"The aim of this decision is to increase the competitive advantage of local workers by reducing the gap between the cost of expatriate labour and local labour," it said.
If it is strictly enforced, the policy could have a major impact on some firms. Roughly nine in 10 employees of private companies in Saudi Arabia are expatriates, according to official estimates; firms prefer to hire foreigners, many from south or southeast Asia, because they command lower wages than locals.
This has helped to boost the unemployment rate among Saudi citizens to about 10.5 percent - a social problem and potentially a political one too in the long run. Saudi Arabia has a population of over 27 million, of which about 9 million are believed to be foreigners.
The Ministry of Labour is trying to change the private sector's culture from one of "importing cheap labour from abroad to one of developing national talent that is needed by the sector", Deputy Minister of Labour for planning and development Moufarrej Haqbani was quoted as saying in the statement.
In order to press private firms to hire more locals, the government last year introduced a quota system which imposes minimum numbers of Saudi employees on companies depending on their size and sector. Firms which do not comply face restrictions on obtaining visas for their foreign workers.
The Ministry of Labour said in September that it had created 380,000 new jobs in 10 months through that system, which has been criticised by some employers for raising their costs or dirsupting their operations. Some companies have complained that qualified Saudi workers are not always available.
In January, Labour Minister Adel Fakeih said the Middle East's largest economy needed to create 3 million jobs for Saudi nationals by 2015 and 6 million by 2030, partly through "Saudi-ising" work now done by foreigners.
Youth unemployment was one of the main drivers of last year's unrest in much of the Arab world, but the unrest did not seriously affect Saudi Arabia, where King Abdullah announced a $110bn package of benefits to defuse any potential discontent.
The problem with many South Asians in general and Indians in particular is that greed has no limit for them. No matter how much they get, which is often... more
Wednesday, 19 June 2013 10:59 AM - Fahd
In those so called democratic (they should change it to Hypocratic) there is freedom of speech but no freedom after the speech.
When the guys speaking... more
Great deal from Nakheel again, pay and get lost :-)
more
The problem with many South Asians in general and Indians in particular is that greed has no limit for them. No matter how much they get, which is often... more
Wednesday, 19 June 2013 10:59 AM - Fahd
@anguilla: Kalba town is part of the Sharjah Emirate.
along with khor fakkan and dibba al hisn.
http://en.wikipedia.org/wiki/Sharjah_%28emirate... more
I am wondering why this article is being published here? it is really useless. anyway, I in certain ways agree with the Mufti. god bless Saudi Arabia more
Tuesday, 18 June 2013 9:27 AM - Faisal@ Henry, enough of whining, the host country does not need you, it is your employer that needs your services and you know well enough that you can be made... more
Saturday, 1 June 2013 11:32 AM - ZainOrganizations like HRW, Green peace, ILO, UNHCR are so self serving that it is amazing they still exist! they spend 60/70 percent of their budgets (meant... more
Thursday, 30 May 2013 7:53 PM - NavinThe problem with many South Asians in general and Indians in particular is that greed has no limit for them. No matter how much they get, which is often... more
Wednesday, 19 June 2013 10:59 AM - Fahd
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