The number of Saudi Arabian workers taking up post with private firms has doubled as the government battles to turn the nation’s jobs market around.
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Saudis are traditionally reluctant to work outside the public sector, but the government is keen to bring down unemployment and switch the economy away from reliance on oil revenues.
Labour Minister Adel al-Fakeih issued a statement benchmarking the government’s efforts so far over the weekend.
“After 30 months, I can say that 1.5 million Saudis now work in the private sector,” he said. “That’s 101% more than when we started.”
The Saudi government puts official long-term unemployment among the nation’s 30 million citizens at 12%, but analysts and economists reckon this understates a more accurate figure of between 30% and 40% of the working population are in work or are looking for jobs.
The government employs most working Saudis, but the International Monetary Fund has warned the public sector cannot continue to subsidise wages as oil revenues drop away.
Ministers are also concerned that an educated but jobless population could trigger civil unrest seen in other Middle Eastern and North African countries over recent years.
The private sector is estimated at around 10 million jobs.
Saudi Arabia has traditionally relied on expat workers to fill these roles and is home to around 9 million overseas nationals.
Tough expat policies
The government has introduced tough policies to penalise firms from employing expats ahead of Saudis, including:
- A quota for private firms employing expats to make sure jobs are also available for Saudis
- A public sector freeze on employing expats which only allows overseas workers to take up a contract if a suitably qualified and experienced Saudi cannot fill the post
- Action to stop expats and employers from taking on staff without work permits
- Introducing unemployment benefits for Saudis who lose their job at no fault of their own or with a year of taking the post
Changing the employment culture in Saudi Arabia has proved to be a long, hard task.
Firms are complaining the new policies are pushing up their costs as Saudis are paid more for doing the same job as expats.
They also complain a shortage of qualified workers is holding up projects, especially in infrastructure and employment.
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