Thousands of expats in Saudi Arabia are set to clear their bank accounts ahead of upcoming visa renewals amid fears new curbs on foreign labour will unleash a wave of job cuts.
Foreign workers, whose bank accounts are frozen during visa renewals, fear rules aimed at forcing private sector firms to increase their quota of Saudi employees will leave them unemployed, unable to access their cash, and struggling to find a new job.
“The feeling is of fear and uncertainty,” said a Filipino office administrator, who asked not to be named. “If my iqama [residency visa] expires and is not renewed, my bank account will be frozen. Once your bank account is frozen, no money can be taken from it. Your driver's license is also frozen, credit cards as well.
“If you get a new job without a valid iqama, you only expose yourself to further exploitation - you can get jailed if you are found.”
Companies in the world’s top oil exporter have until November 26 to achieve a set quota of Saudi employees, or face tough penalties including a ban on renewing visas for foreign workers.
Firms will be graded as red, yellow and green. Expat employees of ‘red’ companies will not have their visas renewed at all, while ‘green’ companies will net a host of benefits, including fast-track visas for foreign workers.
Expats within red firms whose visas are not renewed will need to secure a post within a green company in order to stay in the kingdom – but are likely to face fierce competition for the role.
Worse, their bank account will be frozen during the job seeking period.
“Expatriates in Saudi Arabia are worried,” said John Sfakianakis, chief economist at Banque Saudi Fransi and author of a report on the new Nitaqat scheme.
“Their residency will not be renewed unless they find employment in another company in the green or ‘excellent’ category. It means now they have to make sure that either they find new jobs or they take their money out of the bank - because it will be frozen.”
Complicating the matter further are labour rules that insist foreign workers in Saudi must secure a release letter from their employer in order to move jobs. While the law is under review, many lawyers in the kingdom oppose moves to scrap it, said Donovan Rinker-Morris, associate at legal firm Abdulaziz A. Al-Bosaily.
“The possibility that a new employer could legitimately employ an expat without the consent of the old employer terrifies many of the Saudi managers,” he said. “It has never been possible to do that legitimately before. And there are an awful a lot of lawyers looking to challenge this, so it's difficult to say whether it will actually happen.”
Some foreign workers told Arabian Business they would go to any lengths to stay in the country, including forfeiting their summer holidays and obtaining visas illegally.
“I have been employed at my company for a long time and I’m happy here. If I had to, I'd use a Saudi I know to buy a new visa. It isn't cheap but I don't want to leave Saudi,” an Indian expatriate said.
“At the moment my family is on vacation, but I've chosen to remain and work this summer. I want my company to see me working so that my job is not at risk.”
Unemployment among nationals in the kingdom, which sits on more than a fifth of global oil reserves, stands at around 10.5 percent, the minister of labour said in May.
Joblessness 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.For all the latest business news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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