Saudia Arabia new law

DAMMAM: Companies not employing enough Saudi nationals may find themselves without foreign workers, and foreign workers may be limited to six years of employment in the Kingdom according to statements made in Jeddah by Labor Minister Adel Fakieh.

According to published reports in two Arabic newspapers, Fakieh did not say when the decision would be implemented or whether it would be applied to all foreign workers or to specific jobs.

A credible business journalist who works for a sister publication of Arab News and who attended the minister’s meeting with a group of businessmen and women in Jeddah said the minister was not very clear about the six-year work visa limitation.

“He mentioned that in the passing and wasn’t clear about it at all nor did he explain it,” he said. “It was just a one-line statement.”

According to the journalist, all that the minister focused on was his ministry’s “Nitaqat” program, which is expected to be applied in two weeks. Under this program, private companies and establishments will be classified in three colors — green, yellow and red — according to the number of Saudis they employ. The green companies will be given a number of advantages, including recruitment of manpower from foreign countries and the transfer of iqamas from employees in the yellow and red companies without the companies’ consent.

Reports in the local newspapers quote the minister as saying “The current situation calls for strong cooperation between the government and private sector in solving the problem of unemployment with hundreds of thousands looking for work.”

The minister expected Nitaqat to end 99 percent of black-market work visas and said that with a little help from the private sector, this market would be totally dissolved. “The program will also put an end to the commercial concealment where foreigners run businesses under Saudi cover,” he said.

Quoting the latest statistical figures, Fakieh said there were about 500,000 unemployed Saudi men and women, against the presence of eight million foreigners of whom about six million are employed by the private sector. “The foreigners transfer about SR100 billion every year to their countries,” he said.

Unemployment among nationals in the Kingdom is running at 10.5 percent, he said, adding that 28 percent of the unemployed were women and 40 percent high school graduates.

None of those who worked informally with the minister on a number of proposals to end unemployment were willing to comment on the story. They said these statements and explanations should come from the minister himself. “This is his prerogative,” said one planner, but he added that there are many issues that need the consent from the top to go ahead. “Some of the proposals can be implemented by the minister by using a ministerial decree; some others require the consent of the Ministry of the Interior, and yet others will have to go to the Custodian of the Holy Mosques King Abdullah for approval,” he noted.

That was perhaps an oblique reference to the six-year work visa limitation issue. Such a decision would have to come from the very top.

Businessmen refused to comment on the issue. “This is a sensitive topic,” said one Dammam-based businessman. “I don’t want to get into any controversy,” he said. “I have seen the reports in local newspapers just as you have, and they did say that the minister wants to bar the foreigners from working more than six years in the Kingdom.”

Another businessman said: “We have had such proposals in the past. Now the question is: Are they feasible? I don’t think so. For example, let us take the case of accountants. Almost all the accountants working in Saudi Arabia have been here for more than six years. If we send them back home tomorrow, do we have enough accountants to replace them? These questions need to be asked,” he said.

He said he would wait for the minister’s presentation at Eastern Province chamber on Tuesday. “I would like to hear from him directly. He is certainly well-intentioned, and we would like to hear what he has to say,” he said.

John Sfakianakis, chief economist at Banque Saudi Fransi, said the total number of foreign workers in Saudi Arabia as of 2011 exceeds 8.5 million. According to 2009 official figures, the total private labor force was 6.895 million of which Saudis comprised 681,000 — slightly less than 10 percent.

On the minister’s reported statement, Sfakianakis said there is a need for more details and granularity at this point. “The proposal does not limit the inflow of expatriates. Once the six years are over fresh expatriates will be able to work in Saudi Arabia; hence the problem is not solved as the inflow of expatriates is not limited, and dependence on foreign labor will continue. The economy also could benefit by having highly trained and experienced expatriates stay in Saudi Arabia as they contribute to the economy given that it is already challenging to attract good expatriates into the Kingdom.”

He, however, felt that it was more of a knee-jerk reaction as the measure does not limit the total inflow of foreigners but only limits the tenure of existing foreigners.

As to whether such an idea is feasible, Sfakianakis said: “If there is commitment it could be realized, but differentiation will be needed. Not all expatriates contribute the same way, and if all exit the implications for the economy could be negative.”

Meanwhile, young Saudis welcomed the minister’s reported statement with unconcealed glee. “This is the best decision, and we want it to be implemented fully,” said Ahmed A., a university graduate who is planning to launch his own business this year. “This is the only way to solve the issue of joblessness. We have no jobs, and as long as foreigners are well-entrenched in the market we will never get a fair chance,” he added.