Saudization Woes – OpEd


The new color-coded rules to boost Saudization have caused a great deal of concern and head scratching among expatriates in the Kingdom. “Is my company in the green light, orange light or red light category?” “Will I lose my job?”

Already foreigners are being sent home. For them, and the others who will follow, these are hard times. But the Labor Ministry had to do something. The need to provide the burgeoning number of Saudis entering the job market with work was getting desperate. In 2009, there were officially 448,000 unemployed Saudis. Today that figure is thought to be nearer 600,000.

Creating new jobs is one way of meeting the demand but 600,000 new ones is going to take time and money. Two years ago in the US, it was estimated that the average cost of creating a job was $31,169. There are no available statistics for costs in the Kingdom, but it should be marginally less. But even on a low guesstimate of $28,000 a job, 600,000 new ones are going to cost $16.8 billion or SR63 billion. And that is only a start. The number of young Saudi men entering the job market each year is growing exponentially. Within five years, it is expected to be over 250,000 a year; 400,000 if women are included. That latter figure would require an investment of at least SR43 billion annually.

That is why Saudization has to work. As Labor Minister Adel Fakeih pointed out to a human resources forum in Jeddah on Sunday, there are eight million expatriates working in Saudi Arabia. Forget the SR98 billion they transfer out of the country annually. It is a minor issue: Saudi Arabia lives by importing and exporting — and in any event Saudis transfer much more. It is the number of jobs that count. Lots of them could go to Saudis.

Complicated though it may seem, the “traffic light” system devised by the Labor Ministry makes sense. Anecdotal evidence indicates that it is having some effect in forcing the private sector to employ less foreigners and more Saudis.

What does not make sense is that at the same time the Labor Ministry is trying its hardest to find jobs for Saudis, the Haj Ministry announces that it is recruiting 30,000 Egyptians for Haj work. It seems there is one rule for private companies and another for the state sector. Many will suspect too that this is purely about bottom line figures — Egyptian labor being cheaper than Saudi.

Claims that the jobs are temporary and that Saudis do not have the particular skills needed certainly will not wash. There are plenty of Saudis desperate for any sort of job, temporary or otherwise, plenty of Saudis who can drive the buses and trucks that are among the tasks sought. As for the butchers and barbers required — yes, there are not a great deal of Saudis who are up to the task and it is a bit late to train them for this year. But Haj comes every year. A training program for Haj jobs could have been set up years ago. Moreover, those trained as butchers or barbers would have a job for the rest of the year too, replacing the countless Syrians, Turks and Egyptians who currently monopolize the two sectors.

Why has no one thought about this?

Arab News

Arab News is Saudi Arabia's first English-language newspaper. It was founded in 1975 by Hisham and Mohammed Ali Hafiz. Today, it is one of 29 publications produced by Saudi Research & Publishing Company (SRPC), a subsidiary of Saudi Research & Marketing Group (SRMG).

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