Twenty years after the peak of the oil boom, Saudi Arabia is struggling to find enough jobs for its citizens. Rasheed Abou-Alsamh reports Despite the fact that seven million foreigners work in Saudi Arabia, the country is ironically finding it hard to place the estimated 300,000 unemployed Saudis in the workforce. A combination of a weak educational system, and an attitude of entitlement brought on by once having had an annual per capita gross domestic product (GDP) of $27,000, has contributed to the current dilemma of Saudi unemployment. Some Saudis also believe that the easy availability of cheaper foreign workers has prevented Saudis wanting employment from finding work. But the heady days of a welfare state are over. For sure, education all the way up to the university level is still free, and all Saudis have access to free healthcare, but the Saudi government has been steadily privatising everything from the telephone company to desalination plants in an attempt to lighten its burden of a SR660 billion public debt ($176 billion). With annual per capita GDP now down to $7,500 and one of the world's highest annual population growth rates of 3.2 per cent, the pressure on the government to help needy Saudis has grown exponentially. "When the Saudisation of jobs held by foreigners was first mentioned in 1987 it was like a far-fetched goal, somewhere there on the horizon," said an American teacher who has been teaching Saudis English for the past 20 years. Not anymore. The government has become very aggressive in cracking down on businesses that are too slow or even reluctant to employ Saudis. An ambitious Saudisation target of five per cent a year for the workforce of every company with more than 100 workers was put into place in 1993. Companies initially complied with the order to show how cooperative they were with the government, but subsequent years saw a slide in compliance. Reasons for this slide were virtually the same for every company involved: Saudis were too expensive, not properly trained, had a bad work ethic and often jumped from job to job, even when given expensive training. Foreigners were cheaper, worked long hours without complaining and were practically shackled to their employers by the iqama sponsorship scheme that all foreign workers are part of. In a further attempt at forcing compliance with its Saudisation targets, the government a few years ago declared whole job categories open to Saudis only. This meant that work visas were no longer being issued for accountants, security guards and salesmen, among others. Many companies got around this restriction illegally by bringing in workers within a certain job category and having them perform other duties. Regular raids on shops and offices by Passport Office officials soon put a stop to that when errant workers were arrested and deported, and employers were fined for disobeying immigration rules. With a population of 12 million Saudis, and dwindling oil revenue despite this year's expected budget surplus of SR130 billion ($34 billion) as a result of the spike in world oil prices, Labour Minister Ghazi Al-Gosaibi declared war on the open sale of work visas that had developed into a very profitable business for corrupt Saudis over the past decade. "It is unacceptable that we issued 600,000 job visas last year. At the rate we're going, we will issue 750,000 work visas this year, a figure that I shall never accept as long as I am in a position of responsibility," Al- Gosaibi said last April to the Council of Saudi Chambers of Commerce and Industry in Riyadh. According to Al-Gosaibi, as much as 70 per cent of visas issued are being sold on the black market. Many Saudis involved in the sale of visas, have companies only on paper and ghost employees. But these ghost employees are very lucrative, each one paying an average of SR9,000 ($2,400) for a visa, and SR100 ($27) a month, plus extra fees for exit/re-entry visas and renewals of work permits. In return for this lucre, the Saudi contractor just has to sign a few bits of paper and hardly lift a finger. But the days of easy money for corrupt Saudis is rapidly ending. The government has put the squeeze on the number of visas being issued, with a just announced new rule that a commercial establishment can only apply for one work visa at a time, with a two-month period between each subsequent application. Previously, employers could apply for visas in blocks of 10, 20 or 30, enabling them to bring in planeloads of workers at a time. Al-Gosaibi says the government has adopted a three-pronged approach to fighting unemployment: Control the influx of foreigners; intensify practical training of Saudis and set up a dialogue with the private sector to create more jobs for Saudis. Although the government has set up many technical colleges and programmes across the kingdom, economists and employers still complain that there is a disconnection between what Saudi schools are producing and what the Saudi economy needs in terms of skilled labour. "I don't think the government has set realistic Saudisation targets as there isn't enough training for Saudis to be able to substitute foreign workers," Nahed Taher, chief economist of the Jeddah-based National Commercial Bank, told Al- Ahram Weekly in an interview. "Unfortunately, 35 per cent of Saudi workers are in administration, 25 per cent in education and only three per cent in industry. We need to change our curriculum's emphasis on the social sciences and humanities to more technical subjects if our Saudisation programme is to succeed." In the mean time, the private sector has found itself forced to step in and fill in the gaps in training of the Saudis that it hires. According to Faisal Ghulam, general manager for human resources at Tetra-Pak Saudi Arabia, his company has signed an agreement to train 30 students from the Jeddah Technical College for six months to a year. During the training, Tetra-Pak will pay the trainees a basic salary and give them the opportunity of full-time employment if they show promise. The company has even built a fully-equipped ideal classroom and donated it to the technical college, as part of its contribution to training Saudis. The classroom will be ready by the end of September. "The Labour Office used to send us Saudi graduates who were looking for jobs, but more often than not they would send us literature graduates who were completely unsuitable for technical jobs. That's why we started our own training programme," explained Ghulam to the Weekly. "Our workforce of 312 employees is 35 per cent Saudi, but we find it extremely difficult to find qualified Saudis." High salary expectations of some Saudi graduates have also prevented many of them from finding suitable employment. It is not uncommon for engineering or computer science graduates to expect a starting salary of around SR12,000 a month ($3,200), especially if they have a degree from the US or Britain. But Saudi employers have been reluctant to pay such high starting salaries when they can hire foreign engineers at a fraction of the cost. "We have a very low retention rate for Saudis," said Bader Al- Aujan, managing director of the Dammam-based Al-Aujan Industries, which produces Rani, Vimto and Barbican beverages in the kingdom. "Since much of our business involves working in a scorching factory or delivery trucks, we find many of our Saudi employees leave us once they find jobs with easier work conditions even if they get less pay." Even so, his company is now 25 per cent Saudised. Al-Aujan says the government has politicised the whole Saudisation drive, and is not listening closely enough to what Saudi businessmen are saying. "What we need is national masterplan for developing the economy and generating more jobs, much like Singapore has done," said Al-Aujan. "With 10-13 per cent unemployment and 50 per cent of the population under the age of 25, what is the plan? What are we going to do 15-20 years from now?" While waiting for a national masterplan, many Saudi businesses have forged ahead full- heartedly with Saudisation. A good example is the Al-Azizia- Panda Supermarket chain, which has fully Saudised all of its cashiers in its 48 supermarkets across the country. "In 1999, only five per cent of our employees were Saudi," Abdul-Rahman Al-Zomiea, Panda's localisation manager, told the Weekly from Riyadh. "At that point we had to decide whether we were going to stick to the government's minimum of five per cent Saudisation a year or were we going to do more? We decided that we needed a strategic objective for Saudisation that would give us a competitive edge." Today, 31 per cent of Panda's 5,500 workforce is Saudi, and the company has already spent a total of SR19 million ($5 million) in training programmes for new and current Saudi employees. "Most of our cashiers are 18-21 years of age, and after one year of successful work have the opportunity to move up to assistant store manager," said Al-Zomiea. Surprisingly, Panda's success story has been in a job category that in the past Saudis would not have touched with a 10-foot pole for being low paying and of relatively low status. But this development of seeing Saudis working as cashiers, security guards and fast-food waiters is an indication that Saudis are finally realising that not all of them are destined to have university degrees and land managerial jobs. The bottom line remains that Saudi students need much more training than they're currently receiving and also need to improve their English-language and computer skills to be competitive in an increasingly globalised marketplace. One Western manager of a private English-language school in Jeddah told the Weekly that he felt Saudis had realised in the past year that the bubble of prosperity had burst. Indeed, his school's summer enrolment of Saudi students was up 40 per cent over last year's. Even so, it is clear that until enough Saudis are adequately trained to replace key foreign workers, the government is going to have to work out a plan with Saudi businessmen to allow foreign workers to still be hired, but without restricting access to jobs for qualified Saudis. It's going to be a delicate balancing act, finding appropriate jobs for the growing number of unemployed Saudis while satisfying the private sector's need for skilled foreign labour. Labour Minister Al- Gosaibi certainly has his work cut out for him.
