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Tue 31 May 2011 06:07 PM

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Saudi Arabia clarifies new rules over expat jobs

Labour Ministry says new regulations limiting work permits would not apply to 'house servants'

Saudi Arabia clarifies new rules over expat jobs
Unemployment among nationals in the kingdom is currently 10.5 percent

Saudi Arabia's labour ministry on Tuesday moved to clarify its position on expat workers amid confusion over new Saudization rules and regulations.

Media reports quoted Labour Minister Adel Fakieh as saying all foreign workers who have spent six years in the kingdom would not have work permits renewed as part of its plan to create jobs for nationals.

But a ministry spokesman told state news agency Saudi Press Agency that the rule only applied to expats working for companies who do not meet new Saudization criteria.

He also said the new measure would not apply on house servants as their permits would be renewed without considering how many years they stayed in the country.

Under the new Nitaqat system, companies are split into red, yellow and green categories depending on their level of employment of nationals.

The ministry said the measure would be applied on those foreigners who work for companies in the yellow and red category.

The spokesman added that permits of foreign workers in red category companies would not be renewed at all, irrespective of the years they have spent in the kingdom.

Companies in Saudi Arabia will have a three-month period to September 7 to achieve a prescribed quota of Saudi employees.

Unemployment among nationals in the kingdom, which sits on more than a fifth of global oil reserves and is the world's biggest oil exporter, is currently 10.5 percent, he said, adding that 28 percent of the unemployed were women and 40 percent high school graduates.

Despite its wealth, unemployment in the Gulf Arab state has risen as an outdated school system focused on religion and the Arabic language produces graduates who have difficulty finding jobs with private firms.

Companies favour workers from Asia, prepared to work long hours for low salaries, or well-paid foreign experts.

Many Saudis work in the public sector but, in contrast to other Gulf oil producers such as Kuwait, citizens do not automatically get a job because of the rapidly rising population, which now stands at almost 19 million.

In 1994 the government began a "Saudisation" plan, setting quotas for the number of nationals private firms must hire. The programme failed to achieve a significant increase in the participation of nationals in the private sector, where Saudis still account for only 10 percent of employees.

Almost 70 percent of Saudis are under the age of 30, and the population is increasing by around 2.4 percent annually.

ziad 8 years ago

I would love to employ Saudis... where are they.. of 100 interview intend to hold, only 10 show up and 1 accepts to work... for few month... The government has to provide an incentive for both companies to hire and saudis to work in all field.

kumo 8 years ago

A population doubling time of 29 years at the current birth rate, some tough decisions need to made.

Mano 8 years ago

Saudis have the right to work in the soil of them, But they should have to ready to work in Pvt sector and any kind of work. Look to Oman, Omanis are ready to do any work like driver, or a fish vendor in the fish market. They are ready to take the job as fish cutters. So Saudis also be ready for anything......

Kelly 8 years ago

Great. So in order to keep foreign employees (i.e. the employees actually churning out the work product) a company now needs to employ a quota of Saudi's who show up for work as and when they wish - and who simply don't have the skill-sets (nor interest in obtaining the skill-sets).

Glad to see that the servants will be okay though...

SAM 8 years ago

Expats would never set foot in Saudi Arabia, unless there is a financial benefit to them. If the new rules reduce expats financial benefits to a level that makes working in Saudi Arabia unattractive, expats will leave the country. It is as simple as that. Also, all expats are aware that they are in the country on a temporary basis (I.e., residency/work visa). If the country decides to refuse to renew existing visas, then expats should not be surprised. However, Saudi rules should be clear and made public to alert potential expats who may be contemplating jobs or the setting up of a business in the GCC region. Personally, I think this will hurt the Saudi economy, but in the long run may force Saudis to improve their work ethics. I guess Saudi can afford experimenting in this field at the moment, but Saudi should also be aware that the cost of failure has suddenly become a lot higher.

robert 8 years ago

Saudi Arabia needs to decide how it wants to develop the country. Traditionally, Saudi has relied on foreign direct investment to bring technology to the country, increase innovation and provide employment opportunities. However, over time, Saudi Arabia is not the most attractive place in the world to do business. While it is relatively stable, the costs of doing business can be extremely high:
- Payments can be very slow.
- Enforcement of contracts is difficult/impossible.
- Compliance with regulations can be extremely costly and time consuming.
- Productivity of the workforce tends to be low.
- Salaries/benefits for well-qualified personnel tend to be costly.

These factors make Saudi a difficult and costly place to do business.

Moves like this one raise the costs of investing in Saudi Arabia even further.

I suggest that, if KSA wants continued foreign investment, that it should get more creative than this plan.

Ronnie Roback 8 years ago

This is really disappointing. If six year is the rule it should be told six year back. It should be applied for all new visa so if a person is coming to Saudi he should evaluate the alternative. However, those people who have left the job and landed here and this year they are completing six year or more they have no time to find the job at such a short notice.

If the company is in yellow or red it not not the fault of the employee who are to be penalized. Existing staff must be given at least two years to find job else where, six year to be fair.

Abdul Hafeez 8 years ago

Assalamalaikum, this rules are gud, but one condition should be their the present worker should be transfer to other companies, or give him freedom to work anywhere, some people are on job vizas, who they can work. In most of the companies they are terminating workers. this will be a problem for all. gud if saudi people work with us. companies has to provide one oppertunity to the worker that they can have option. dont send them back to their homes. everyone has their aim to come here. but new rules should be gud for every country. i like this rules very much. it my openion to all the viewers. govt has to provide them option to work in any firm.

Mohammad Azam Khan 8 years ago

This rule may be applied on technical manpower working in Saudi Arabia, in steps. A long experience is required to become a skilled person. Applying this rule on skilled persons working in companies may create a big skill level gap that can lead to face difficulties in maintaining the operation of costly government equipment.

haris 8 years ago

It is great relief ,if Authoritties give an additional one year time to the companies for practical new law.