by N Janardhan
(IPS) DUBAI --
Arabia's decision to reduce its foreign workforce by more than half in 10 years is a clear indication of the oil-rich country's growing unemployment problem.
Following a study on the job market situation in the kingdom, the interior ministry's Manpower Council announced this week a 20 percent ceiling on the number of expatriate workers and their dependents in the kingdom.
The directive would also ensure that workers from a single country would account for no more than 10 percent of the workforce by 2013, changing the kingdom's decades-long dependence on foreign nationals working as hotel staff, taxi drivers and clerks, to public relations, managers and teachers.
Some 7.5 million foreigners work mostly in the private sector, which translates to about 40 percent of the total indigenous population of about 17 million.
When fully implemented, the decision would reduce the number of foreigners to around 4 million. This means that if new recruitment is totally suspended, around 3 million foreigners will have to leave over the next 10 years.
Beneath of the glitter of its oil revenues, Saudi Arabia has a serious unemployment problem that threatens to worsen because about half the population is under 18.
There are now 360,000 Saudi nationals, or 20 percent of the population, according to the Manpower Council. Less than 10 percent of women of working age are actually employed.
The limits on foreign workers "is a painful, but important process in the evolution of all the oil-rich countries," independent political analyst Ghassan Al Jashi said, referring to the changed economic climate since the oil-boom days that draw huge numbers of foreign workers and expatriates and propped up local economies. As Saudi Arabia's population has risen, per-capita gross domestic product has fallen from $28,000 in 1981 to under $8,000 in 2000.
"The important thing in limiting the foreign workforce, however, is to achieve a balance between the need to assuage domestic unemployment without compromising on quality of the workforce," Jashi added.
The new regulations may not make a difference immediately. But they could have a dramatic effect on nationals from India, Pakistan, Bangladesh, Sri Lanka, Egypt, Sudan, Syria and the Philippines, whose numbers exceed the newly stipulated 10 percent cap.
But the Saudi daily 'Okaz' quoted Interior Minister Prince Nayef as saying: "The employment of expatriates should not be at the expense of Saudi job seekers. More than 100,000 young Saudis enter the job market annually. We have long depended on others. Expatriate workers remit no less than $13 billion abroad annually."
He added that expatriates were increasing the government's burden in terms of putting "pressure on infrastructure facilities and increasing crimes".
Similar concerns about dependence on foreigners and domestic job worries have been raised in the other Gulf countries as well.
In January, UAE President Sheikh Zayed bin Sultan al-Nahyan warned of the dangers of demographic imbalance in countries where foreigners make up as much as 85 percent of the population.
"This imbalance continues to pose a grave problem which threatens the stability of our society and the prospects for future generations," Sheikh Zayed said, while calling for "the implementation of measures to remedy this imbalance."
In 1995, a law was issued requiring private businesses employing more than 20 people to increase the number of Saudi nationals by 5 percent of the workforce every year. The current required rate is 30 percent.
The government aims to create jobs for an additional 817,300 Saudis over the next five years through a combination of Saudisation and the creation of new jobs.
While the government does not plan to expel foreign workers, it aims to discourage some classes of foreigners from applying for jobs and to create more jobs for Saudis.
Accordingly, the government has reserved 22 job sectors -- in addition to 34 sectors already announced -- for its nationals. New jobs reserved for Saudis include administrative managers and their assistants, procurement mangers, secretaries, car showroom salesmen and public relations jobs.
The government also intends to Saudise taxi driver jobs within two years. About 50,000 drivers mostly from the subcontinent are likely to go jobless.
Said Shenaz Iqbal, a schoolteacher from the subcontinent: "Benefits have been mutual -- Gulf countries have benefited a great deal from the contributions of the expatriates in terms of development; and we have benefited financially by earning much more than what we could have has in our countries."
"But, to keep us around until their developmental objectives are fulfilled and then ask us to leave is unfair," she said. "I doubt if the locals will fill in to do all the jobs that we have been doing and for the same salaries."
Abdul Ghafour, a human resource consultant, said the governments need to refocus the thrust of their nationalization programs. "While too much emphasis is being placed on providing jobs to nationals in the service sector, the more productive industrial sector has been hardly tapped," he said.
"Another important factor for nationalization is to have in place an educational system tailored to the needs of the private sector," he added, explaining that a lack of educational planning had led to expatriate domination of the industrial sector.
Jashi also cites a political reason behind the labor reforms, after the Sept. 11 attacks. "With discontent brewing among the conservative groups at the kingdom's support for the United States, it would be political suicide for the rulers not to address the economic grievances," he said.
"Employment for locals is an economic safety valve that helps let out political steam. It is a fairly full-proof political diversion, apart from being a sound economic plan," Jashi said in an interview.
"The truth is that the expatriates have been very competent. This has made the local population complacent. Nationals are certainly acquiring better skills today, but the market is yet to be tested if they will be able to replace foreigners just as efficiently," he said.
February 7, 2003 (http://www.albionmonitor.net) All Rights Reserved. Contact firstname.lastname@example.org for permission to use in any format.
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