Is the amped nationalisation in Saudi Arabia missing the point?

Is the amped nationalisation in Saudi Arabia missing the point?

Creating avenues bridges to get nationals in Saudi Arabia employed is commendable but does penalising companies really address the heart of the Kingdom's unemployment challenge?

November 21, 2011 4:41 by Precious de Leon

Failing to encourage the private sector in Saudi Arabia to raise their local work force figures, the labour ministry is getting more aggressive about employing Saudis, threatening to penalize companies that fail to meet requirements by the end of the year, if a report in Emirates 24/7 is anything to go by.

Companies will be deprived of new work visas and renewal of permits if they don’t comply.

The penalties will affect companies rated as “red” within the new job nationalization programme while those rated as “yellow” would be subject to punishment in February when their deadline expires, according to the article.

Another day in the battle for localization, you say? We would agree except something in this article stood out:

“The ministry of labour also warned the more than 300,000 firms covered in plan that it would not tolerate any attempts to maneuver or circumvent the rules by offering Saudis low-paid jobs in a bid to dissuade them from accepting work.”

Hopefully misinterpreting this statement, to us this reads that it’s not enough for private companies to offer a position it also has to be a high-paying job.

If this is the case, then hopefully the government is also thinking about subsidizing salaries for nationals, for this employment push to be successful—much like what the UAE Minister of Labour, Saqr Ghobash suggested in this article in the National.

Otherwise, Saudi’s job nationalisation programme called Nitaqat should help its citizens to manage their expectations when it comes to salary expectations and generally the work environment in the private sector.

Nothing quite equates to the satisfaction of genuinely working your way up the corporate ladder instead of a high-ranking position being handed to you on a silver plate. Kipp has met quite a handful of Saudi citizens who in the private sector who would agree with this statement.

Official data showed unemployment in Saudi Arabia, among the 20 largest economies, stood at 10.5 per cent at the end of 2010, nearly 450,000.

The figures showed the rate among women is sharply higher, at 26.6 per cent. Unemployment among high school graduates is also as high as 40 per cent.