Business | Analysis

Tackling joblessness in Saudi Arabia

The unemployment levels among Saudi nationals are high, carrying with them socio-political repercussions if left unresolved

  • By Jasim Ali, Special to Gulf News
  • Published: 00:00 June 12, 2011
  • Gulf News

Way forward
  • Image Credit: AP
  • Job-seekers at an employment centre in Jeddah. The government has launched a drive to create more jobs for nationals.

The unemployment levels among Saudi nationals are high, carrying with them socio-political repercussions if left unresolved. Suffice to say that the ongoing Arab Spring got under way because of joblessness in Tunisia. Happily enough, Saudi authorities are exerting huge efforts to overcome the challenge.

Latest official statistics confirm that unemployment that stands at around 10.5 per cent remains a challenge in the kingdom. True, the figure is below the record 11.2 per cent reached in 2007. Yet the number of unemployed Saudis is on the rise, currently put around 500,000, versus 416,000 in 2008.

To be sure, the job challenge remains serious thanks to demographic statistics. As such, the steady population growth rate of around 3 per cent per annum partly explains the rise in the number of unemployed. By one account, around half of Saudi nationals are below 20 years of age. Not surprisingly, many nationals enter the job market looking for suitable — by nature of work and pay — employment opportunities.

Enter fresh efforts by King Abdullah Bin Abdul Aziz. In late March he showed personal interest in addressing the unemployment challenge with a combination of monetary incentives and administrative efforts.

Spending boost

On the one hand, he ordered financial support to unemployed youth for one year as part of $130 billion (Dh477 billion) schemes designed to boost spending in the kingdom. This spending plan is separate from the $154-billion budget for fiscal year 2011.

On the other, the king called for the setting up of a high-level ministerial committee to find solutions for the unemployment problem facing graduates. The committee is due to present specific recommendations in July.

Ostensibly, King Abdullah's move comes amid alarming statistics indicating that 44 per cent of jobless Saudis have college degrees. Searching for possible solutions, Saudi labour officials recently mulled the idea of restricting the stay of foreign employees working in the kingdom to a maximum of six years. While the proposal is not fully clear, the restriction could apply to Saudi firms not meeting the minimum Saudisation level.

This suggestion adds to other earlier efforts including restricting certain jobs to Saudi nationals, all of which are designed to help overcome the unemployment challenge. At the moment, some 40 types of jobs are restricted to nationals.

The restricted jobs include taxi drivers, training and purchasing managers, public relations officers, administrative assistants, secretaries, operators, debt collectors, customer service accountants, tellers, postmen, data handlers, librarians, booksellers, ticket kiosk keepers, auto salesmen, janitors, internal mail handlers and tour guides. Understandably, such restrictions are not popular with the business community which considers it an interference in the way employers make decisions.

Notably, there are some promising prospects when it comes to jobs. The retail industry for one is projected as being capable of creating a large number of opportunities for locals. Currently, Saudi nationals hold 270,000 out of the 1.4 million employment opportunities in the industry. The number of jobs in retail is projected to rise to 2 million in 2020, half of which could go to Saudis.

The move partly reflects the fact that the Saudi economy is capable of producing millions of jobs, though most of them end up with expatriates. The Saudi job market boasts 8 million to 8.5 million expatriates versus 4.5 million Saudi nationals.

Many firms like foreign workers on grounds of productivity and pay. Issues of productivity and job ethics are being addressed, partly in the ninth development plan covering the period 2010-2014. The plan calls for developing 25 technical colleges and institutes with the latest technological facilities.

 

The writer is a Member of Parliament in Bahrain.

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