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Labor crisis in Saudi Arabia
21/7/2018 12:00 am [rtl]Ambrose Carey - Translated by Khaled Kassem Saudi Crown Prince Mohammed bin Salman may face serious difficulties in improving his country's financial situation. The economy is suffering from the harsh effects of falling oil prices, making the kingdom of low foreign investment and high levels of capital outflows. The uncertainty surrounding the plans to modernize the economy has increased the apparent suffering of Saudi Arabia in filling the private sector vacancy due to the migration of expatriate workers, leaving the country until last April, more than 800 thousand foreigners since the end of 2016, which alarmed the local companies concerned not to replace these workers easily. The departure of these workers is part of the Crown Prince's attempt to rid his country of dependence on oil by diversifying the economy, an important element of which is to try to persuade Saudis working in the public sector, which makes up two thirds of local jobs to fill vacancies as well as the unemployed. The authorities want 450,000 jobs for Saudis in the private sector by 2020. The crown prince sought to speed up the migration of foreign workers, who make up about a third of the population, by escalating the so-called "Saudization" process, creating more productive local manpower. Taxes on companies operating for non-Saudis increased, fees were imposed on foreigners for dependents, and restrictions were imposed on sectors where they were allowed to work. The majority of foreigners in Saudi Arabia belong to the Middle East and Asia, and most of them work in low-paying jobs in sectors recently reserved for Saudis. But Saudi employers have difficulty finding local workers accustomed to easy jobs in the public sector and generous allowances for unemployment. Reports show that a large number of Saudis are avoiding the private sector because of what they see as low-paying jobs and status. This has raised concerns over the publication of articles on the government-owned Saudi Gazette. In February, a number of heads of chambers of commerce and industry called on the government to exclude the private sector from full Saudization, especially jobs that were difficult to fill, such as construction, amid fears of shutting down many projects, the paper said in February. Several companies circumvent the policy of the ratio of local employees through the appointment of Saudis and pay them a few salaries for fake jobs, prompting some to demand a reconsideration of the nationalization of the job market. However, it seems unlikely that authorities will back down on Saudization. The crown prince hopes to raise more than $ 17 billion in new expatriate taxes two years later to reduce the $ 52 billion budget deficit and fund new economic projects. Critics, however, question whether the proposed tax would offset the loss of consumer spending caused by the departure of foreigners, because the rest would send their relatives to their countries because of the dependents' fees. On the other hand, foreign direct investment in the Kingdom fell from $ 7.5 billion in 2016 to $ 1.4 billion last year, according to United Nations figures. In addition, the International Finance Institute published a study last November that predicted that capital outflows from the Kingdom last year amounted to $ 101 billion, or 15 percent of GDP. The institute said that the flight of capital from Saudi Arabia contributed to a significant decline in official reserves. But fortunately, oil prices rebounded, raising the level of foreign exchange reserves in April to about $ 499 billion, far from a peak of four years ago at $ 737 billion. Business Insider[/rtl] [rtl]http://www.alsabaah.iq/ArticleShow.aspx?ID=160264 [/rtl] |
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