As expats leave, Saudi Arabia feels the sting

Pedro Gonçalves
As expats leave, Saudi Arabia feels the sting

Saudi Arabia's vision to create jobs for locals by pushing expat workers out has left the country's economy in disarray as the foreigners leave but there is no one to replace them.

Nearly 1.5 million expatriate jobs have gone since the end of 2016, squeezed out by Saudisation reforms and economic slowdown. Over the same period, however, the number of Saudis employed outside the security and military sector grew by less than 50,000, according to the General Authority for Statistics, Bloomberg reports.

Some argue that having firms hire Saudi nationals to reach a quota set by authorities and avoid penalties could result in the hiring of unqualified employees.

What is important now is that a Saudi national finds a job, without considering the aftermath"

A Saudi expert in Riyadh, who spoke on condition of anonymity, said that criticism of the kingdom's saudisation programme is out of hand.

"What is important now is that a Saudi national finds a job, without considering the aftermath," said the expert, who stressed that, due to public pressure, some specialised jobs could go to Saudi nationals who are not up to the task.

Others pointed out that average expatriate workers who are essential to the kingdom's economy could feel under attack because of the political climate. One Jordanian resident said he felt he was no longer wanted in Saudi Arabia and that claims of outsized expatriate salaries were exaggerated.

"Let's put experience and efficiency aside, did we come to Saudi Arabia to work for less pay than in our countries?" asked the resident. "Without financial incentives, what would make a man leave his home country and people?"

However, one government official who asked not to be named thinks this move is being deployed in the more visible sectors only.

"Saudisation has been going on for a long time, all that's happening now is that there is more focus on sectors that are easy to find the local talent," says the official.

Many sectors in the Saudi economy increased Saudisation quotas under strict deadlines, resulting in many expatriate workers being phased out. This affected some sectors, such as the mobile phone industry and gold sector, in which many expatriates have traditionally worked.

Many shops in Saudi Arabia have been forced to close down during the ongoing Saudisation campaign since they were found to be running under the illegal "tasattur" arrangements, according to media reports.

The ‘tasattur' practice sees expatriates run the retail businesses in the name of Saudi nationals after paying them a fixed amount.

Around 30% of the shops in sectors where Saudisation is now mandatory have been forced to shut down in the past six months owing to this practice, local daily Al-Madina reported.

"I give them very high salary ... but the problem is they don't like [the work]," Abu Saud, an owner of a mobile accessory shop complained. He gets the impression Saudis would rather be working in a government office. "Each one he like to have a table, he's a boss. Even if just to graduate he just want to be a boss, direct," he says.

The Vision 2030 national transformation plan aims to create 450,000 private sector jobs by 2020 and reduce unemployment to 7% by 2030.