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Following the ambitious overhaul of the kingdom’s private sector, businesses across Saudi Arabia are reporting big job gains for Saudi nationals. However, some have claimed that businesses are creating fake workers, whose purpose is to draw a salary purely to satisfy government quotas, reports The Wall Street Journal.
Some Saudi labour market analysts who support the government’s ‘Saudisation’ campaign say the charge has merit, in part. But they call it an early, and temporary, phase in a critical remaking of the oil-dependent Saudi economy.
“The private sector…in general, they’re not happy” right now, said Essam al Zamel, an IT executive in the eastern Saudi city of Dammam. Mr Zamel writes frequently for Saudi newspapers on economic issues. “There’s some nationalism, ‘OK, for the benefit of the country, this is better,’ but overall Saudi employers are seeing labour costs start to eat into profits.”
Some Saudi companies in their fourth-quarter earnings reports cited higher labour costs from the labour campaign for a drop in profits.
Last week saw some of the most public pushback yet against the Saudi government’s labour campaign, which was first announced in 2011. And in a country where public challenges of top government programs are constrained, members of the Saudi Shoura council, the kingdom’s closest thing to a parliament, spoke out on the Shoura Council floor.
“Companies manipulate the system to give the impression that they have helped Saudis get employed,” the Arab News daily quoted an unidentified Shoura Council member, as saying in the council debate last week on the program.
The Shoura Council discussion came after Labour Minister Adel al-Fakeih announced that the kingdom had doubled the number of Saudi workers in the private sector to 1.5 million in 30 months.
The labour program is one of the biggest structural reforms undertaken in the Gulf in recent decades. Through it, the Saudi government hopes to build a private sector that can provide jobs for the kingdom’s booming demographic of young people and wean the economy off its dependence on oil.
Before it started, only about 10% of Saudi employees worked in the private sector. Some eight million to nine million foreign workers filled most of the jobs, labouring long hours for less pay than Saudis would accept.
The government’s ‘Saudisation’ program began bringing visible changes to the labour market by late last year. Saudi trainees standing behind foreign workers at reception desks and cash registers became a familiar sight, while the number of foreign workers in offices and shops fell. Employers spoke of hot competition to hire disabled Saudis – the labour changes allow firms to hire four foreign workers for each handicapped Saudi.
Saudis call hiring of non-productive Saudi workers, just to satisfy government requirements, “Sawda Wahmiah,” or, “Fake Saudisation.”