New strategy needed to fight unemployment



A news bulletin published by the General Statistics Authority on the job market situation in the first quarter of 2017 showed that the number of jobseekers among Saudi men reached 219,000 against 688,000 among women (with the total reaching 907,000). This statistics show that there are nearly one million jobseekers in the Kingdom, with 50 percent of them being university graduates.

A manpower survey conducted by the authority also revealed that there are 723,000 unemployed Saudis with women accounting for 55 percent of the total. According to this figure, unemployment rate among the Saudis has reached 12.7 percent, which is considered the highest rate. Advanced countries consider 10 percent unemployment rate as a dangerous indicator. Unemployment rate among Saudi women has reached 33 percent, which is the worst in the world.

Official reports have showed a remarkable increase in employment of Saudis in the private sector where the number of employees reached nearly two million with half of them receiving a monthly salary of SR3,500 or less. This means the economy creates only low-paid jobs (at restaurants, malls, security guards, etc.) The employment rate in the private sector has declined by 37% in 2016 compared to the previous year in light of a report issued by the Ministry of Labor and Social Development.

The authority’s news bulletin pointed out that only 616,000 employees in the public and private sectors would be retiring during the next 15 years. During the same period about six million Saudis including graduates and postgraduates will enter the job market.

The unemployment problem among Saudis cannot be solved by just replacing foreigners with Saudis because 10 million of 11 million foreign workers earn a salary of less than SR3,000 and 8.4 million of them receive a monthly salary of less than SR1,500. I don’t think Saudization would solve the unemployment problem, and event a portion of it.

The Kingdom has been depending on the private sector to create new job opportunities but the present situation of the sector does not augur well as it does not invest in development and research. This is the main reason for not creating jobs. At present the private sector depends on the government and it’s not wise to pin big hopes on the private sector for job creation.

We have to review the private sector’s eligibility to become the government’s strategic partner in strengthening the economy. Sometimes I don’t find any solution for this crisis except attracting foreign investment to create new job opportunities. Of course some foreign investments will not serve this purpose. Government investments are also important to create jobs. At the same time, measures should be taken to prevent tasattur business and traders charging unreasonable prices.

In order to save the situation in the short run, the Ministry of Labor and Social Development has announced its plan to change the Saudization percentage and this is a good move. This will lead to employment of Saudis replacing expat workers. Some employers are likely to get rid of Saudi workers exploiting Article 77 of the Labor Law.

It’s a simple fact that if work dwindles from 30 to 50 percent, job opportunities will also decline at the same rate. So we have to increase the rate of Saudization and certain sectors should be fully Saudized. We should also nationalize certain professions completely like jobs of HR department, accounting and engineering. However, we can allow recruitment in special cases, especially after ending unemployment in these sectors and this is what the ministry is doing right now.

I am optimistic that the present job market situation would be changed when effective endeavors are made to strengthen the economy and create more jobs, matching with the objectives of the national transformation program and the Vision 2030.

We should bring about a phase shift in the private sector and set standards for the development of private companies, giving priority to development and research.