Saudinization a Major Issue to Tackle for Labor Minister
Saudi Labor Minister Ghazi Al-Gosaibi made a series of comments on Monday, Dec. 1, 2008 pertaining to unemployment. The Minister rejected the idea of a minimum wage standard and announced a strengthened system for Saudi employment.
The law currently in effect mandates that companies operating in Saudi Arabia must reserve a certain proportion of jobs exclusively for Saudis. However, many companies seem to have been side-stepping this rule, sometimes creating false Saudi employee information.
The law is part of the Kingdom’s effort to Saudinize the labor force and grow less dependent on immigrant labor. There are some 270,000 unemployed Saudis in a country that employ some 7 million foreign workers.
The reason companies will go to great length to not hire Saudis is the level of education of the general Saudi population, or rather, the lack thereof. This has been largely the result of a bureaucratic system designed to distribute the Kingdom’s oil wealth, rather than getting things done. Many Saudis have grown complacent because of the system. Some jobs, for instance, are widely considered inappropriate for a Saudi, such as street cleaning.
While the solution to the Saudi unemployment is unclear, one can almost confidently say that a system that requires companies to hire a certain percentage of Saudis is not the most enlightened. In the short-term, Saudi unemployment will fall, but it does not help the productivity of the population and should not be considered a solution for the future.
