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Tackling Unemployment Issues in Saudi Arabia

Saudi Arabia : 13 March 2011

In a creditable effort, the authorities in the Kingdom are looking at new ideas that will address the challenging conditions of unemployment. As expected, officials in the Saudi government cannot ignore the fact that nationals who are out of work are taking a major role in the continued protests in Oman and Bahrain.

Saudi’s latest push is aimed at increasing and improving the employment of Saudis in the retail industry, a vital job source in the Kingdom’s economy. In 2010 there were 270,000 Saudi nationals working within retail. Projections put the amount of available positions in that sector at 2 million by the year 2020.

Those ideas that have been put forward to augment Saudi employment in retail have value because they focus on training those looking for employment and making it more expensive for businesses to employ foreign employees. The approach is similar to one that Bahrain currently has in place, where the fees to employ foreign employees are higher. The proceeds of those larger fees are used for the training and rehabilitation of nationals.

In actuality, if by 2020 there were nationals employed in just half of the positions currently in the retail sector that shift would all but take care of the unemployment challenges facing the Kingdom.

Official data states that there were 448,547 Saudis out of work in August of 2009, which was a substantial increase from the 416,350 jobless at the same time in 2008.

This repressive trend sees the jobless rate among nationals who are actively looking for work to 10.5 percent, up from 10 percent. On a positive note, that figure is still lower than the 11 percent seen in 2007.

Of all the members of the GCC, Saudi Arabia is standing out by not just admitting the unemployment problems exist, but also by providing the details of the issue.

It is no surprise that females within the conservative Kingdom are experiencing widespread unemployment. The jobless rate for females in Saudi stands at 28.4 percent, while the rate for males is at 6.9 percent. In addition, it is recognized that the unemployment problem is more pronounced in the rural regions across the Kingdom.

It is alleged that the current unemployment rates make the chance of reaching the goals set out for manpower very difficult, if not making them unattainable. The 8th Five Year Plan laid out the goal of only 139,000 employment seekers by 2009 as compared to the 268,000 nationals seeking work in 2004. According to that plan, the jobless rate in Saudi Arabia was set to decrease from the 2004 figure of 7 percent to an ambitious 2.8 percent by 2009.

Recognizing this challenge, the 9th plan of development, which spreads from 2010 to 2014, has a goal to reduce unemployment from the 2009 figure of 9.6 percent to a rate of 5.5 percent by the close of 2014. To emphasize their commitment, authorities have ear marked half of the spending in the new plan to the development of human resources.

It is a fact that demographics add to the unemployment issues, since around 29 percent of the Saudi population is less than 15 years old. It is certain that a massive number of Saudi youth will come into the job market over the coming years, in search of opportunities that meet their pay and career development expectations, as well as have the working climate they hope for.

In response to this future certainty the Labour and Social Affairs Ministry has already placed restrictions on around 40 job types, held only for nationals. Included in this list are  secretarial and administrative assistants, taxi drivers, debt collection agents, public relations officers, customer service accounting staff, tellers, librarians and book sellers, keepers of ticket kiosks, automotive sales staff, tour guides, purchasing management and training staff, data and internal mail handling staff, postmen and operators.

Many feel that Saudi nationals prefer these careers, but the restrictions are not generally seen in a positive light throughout the business world. Business owners feel that they interfere with management decisions, although employers would certainly welcome a supply of well trained Saudis who had the skills and attitude necessary to appreciate business.

Paul Holdsworth, Staff Writer, Gulf Jobs Market News
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