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Tue 26 Jan 2010 12:34 AM

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Saudi needs labour market overhaul - Manpower

Employment expert says labour policy reform needed for country to compete.

Saudi Arabia needs to overhaul its labour market if it wishes to reach its goal of increasing competitiveness and diversifying the economy, said David Arkless, a senior Manpower executive.

Like several Gulf Arab neighbours, Saudi Arabia uses a sponsorship system - called Kafala - to regulate the inflow and residency of foreign workers.

Arkless, the executive in charge of government relations at the global employment services company, said: "Without wholesale reforms to its labour market, including sponsoring, Saudi Arabia cannot increase its competitiveness."

Speaking at a business forum in the Saudi capital, Riyadh, Arkless said: "The sponsorship system ... doesn't work, so we need to reform the labour policy."

About 30 percent of Saudi Arabia's 25 million population is foreign and come mainly from Pakistan, the Philippines, India and Egypt.

The majority of expatriate residents perform blue collar jobs in the construction industry and as domestic aides.

Non Saudi workers receive an entry visa and a residence permit only if a Saudi citizen or institution employs them.

The system requires the employer to assume full responsibility for the employee during the contract and requires the worker to work for the sponsor.

The sponsor is legally able to confiscate either the passport or residency permit of employees until their contract has ended.

International rights groups say the system opens the door wide to abuse in a region that does not adhere strictly to the respect of human rights and labour laws, especially women employed in domestic services.

Arkless said: "Saudi (Arabia) is developing a lot of individual bilateral treaties to bring the right kinds of skilled workers."

He added: "But the 19th century labour construct in the country is doing the country no favours from a competitiveness point of view."

Bahrain became the first Gulf Arab country to abandon the Kafala system last year.  (Reuters)

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Hal-Luke Savas 10 years ago

I would say YES a million times because the current IKAMAH system is shackling the Saudi Industry's competitiveness and only good for those who wish to abuse the system (and they do!!). I have suggested a system (result of 28 years of Saudi experience) that is good for the economy and good for the workers in a win-win scenario. I hope it would be adopted. Saudi Arabia deserves a 21st century HR model that would make the big difference and cut out suffering for both the employer and employee. Good luck Saudi Arabia. Hal-Luke Savas MBA FCIM MBIFM ICIOB affCIBSE londonmanagement@aol.com