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Mon 30 May 2011 01:55 PM

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Saudi Arabia to limit work permits to help locals

New strategy needed to tackle national unemployment of 10.5 percent, says labour minister

Saudi Arabia to limit work permits to help locals
SAUDI EMPLOYMENT: unemployment among nationals in the kingdom, is currently 10.5 percent

Saudi Arabia will not renew the work permits of foreign workers who have spent six years in the country as part of its plan to create jobs for nationals, its labour minister said Monday.

"The current situation calls for strong cooperation between the government and private sector in solving the problem of unemployment with hundreds of thousands looking for work," Adil Fakieh was quoted as saying by the pan-Arab newspaper Al Hayat.

Fakieh did not say when the decision would be implemented or whether it would be applied to all foreign workers or to specific jobs.

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.

Fakieh said there were currently eight million foreign workers in the kingdom of whom six million work in the private sector. Remittances from foreign workers total SR100bn ($27bn) a year, he said.

Saudi Arabia does not regularly publish data on unemployment, a sensitive issue since it highlights fissures in wealth distribution in the absolute monarchy with no elected parliament, where newspapers tend to carry the official line.

King Abdullah offered Saudis $93bn in handouts in March to stave off unrest of the kind rocking other parts of the Arab world. This followed a $37bn package announced in February in an initial move to ease social tensions.

Despite its wealth, unemployment in the Gulf Arab state has risen as an outdated school system focused on religion and the Arabic language produces graduates who have difficulty finding jobs with private firms.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

In an attempt to create thousands of new jobs and diversify its oil-dominated economy, Saudi Arabia launched a $400bn five-year spending plan in 2008, the largest stimulus relative to gross domestic product among the world's 20 leading nations.

 

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Julian James 9 years ago

Unfortunately the article is very ambiguous but how is this going to help anything? No Saudi's wish to work in the lower paid brackets and in the higher paid areas the expertise and experience of the KSA nationals will not, for the large majority, fulfill the job requirements. Of the unemployed, exactly what is the education level and skill set involved? In Oman, certain job categories such as bus drivers, certain truck drivers, personal drivers etc have to be nationals, how many families in KSA want a male Saudi to drive the family around ...NONE. Why not allow females to work in all female garment and fashion shops and make these stores limited to female patrons. there is so much that could be done but society as a whole needs to accept that some changes are necessary to overcome the issues and blanket statements such as non-renewal of visas is only going to reduce investment and stagnate the economy, it is already an extreme struggle to get expat employees who want to come to KSA

Muhammad Faisal 8 years ago

It is a political decision to overcome the saudi's unemployment problem but it will definitely effect the saudi economy and working environment because lack to skilled and experienced professionals. Also it will effect those persons who have their families living with them here and also spouse is working. I hope that saudi government will reconsider the decision by expanding the business opportunities and making business laws easy just as other gulf countries.

N.S. 8 years ago

In 2003 Abdullah (was not yet King) directed to have within one year 100% saudization for taxi drivers. Today, 9 years later, there are for sure more Saudi taxi drivers but these are stilll approx 50%. I believe it's an idea but implementing it will not be an easy task.

Chris 8 years ago

There is a mandate that truck drivers are to be Saudi's but most drivers are Indian Pakistani etc who have companies who pay the fines for breaching the bans. Saudis are not happy doing store deliveries in summer

jon 8 years ago

Good for them.

It's about time we saw more locals in Saudi driving taxis and working in Starbucks.

Thamir Ghaslan 8 years ago

Saudi Arabia is running an economy, not a charity for so called "professionals" from the subcontinent.

What drove you to come here in the first place? Your world class skills or money? The unemployment figure in South Asia is high, every type of development indicator shows these countries at the bottom brackets. But there is a great deal of propaganda proclaiming them to be better suited for marginal jobs.

Nothing upsets me more than seeing my own countrymen and foreigners putting down my countrymen.

I've been serviced by Saudis, they are politer.

The resistance to change is twofold: greedy businessmen and insecure expats putting down their host country instead of thanking them for the opportunity to work there.

Akbar 8 years ago

But surely if Saudis were qualified, skilled and/or willing enough to do all the jobs in the country there would be no need to bring people in?

I understand it can be difficult to find the highly-skilled specialists for very specific jobs and so outsiders need to be flown to the country.

But surely Saudis could be filling the gaps in the less-skilled jobs like working in shops and fast food outlets?