close
طور من نفسك

The Employment Outlook for Saudi Arabia in 2016?

Saudi Arabian Job Blogs



 
As 2016 began the Kingdom of Saudi Arabia had to deal with declines in the price of oil and an economy that was in disarray due to the world economic downturn. With an 11% unemployment rate, Saudi Arabia is facing an economic reevaluation. This is not something that the Kingdom is used to doing. Instead of taking out debt to cover short-term losses the country is facing a long haul with the continued declining price of its main production resource. However, economic reform could bring even more prosperity into the country and push Saudi Arabia closer to a modernized economy.
 
Opening up to International Investment and Privatization
 
The Saudi stock exchange has opened itself to foreign companies that have qualified to invest in the country. This means that foreign investment bankers can, after government approval, buy stock in Saudi companies. This injection of capital could be advantageous to Saudi oil and other diversified energy companies. Mutual fund managers who are waiting for investment approval from the exchange project that as oil prices stabilize after 2017 profits in these Saudi based mutual funds will rise by $30-$40 billion. 
 
Saudi Arabia has started to privatize many of its public services such as communication and water reclamation services. Saudi Arabian Airlines has already privatized certain portions of its operations such as catering, ground services and its airline academy. The recent ascendant to the throne, King Saliman has made voice to proposals about privatizing railroads as well as the airports. 
 
Government Promotion of New Employment Schemes
 
A new government initiative to employee Saudi Arabia nationals has been in place for over a year now. “Nitaqat” as it is known places quotas on the employment of foreign nationals in various businesses in the kingdom. The government has worked actively to make sure that foreign workers have documentation and has deported many whose work permits were not valid. 
 
This change in workforce habits has made Saudi businesses reevaluate their labor force needs. The Saudi Arabian General Investment Authority (SAGIA) is also changing the way that foreign investment is licensed to bring employees into the country. These are changes that are necessary yet they’re also stressful to an uncertain economy.
 
Slow Response to Opportunity
 
Although a resurgence in oil prices could alleviate many problems that the Kingdom now faces the opportunity for diversification of industry within Saudi Arabia can bring with it increased revenue streams and could possibly double GDP by 2030. With over 25% of Saudi Arabian’s populace being under the age of 25 this brings into view a young and healthy workforce that desperately needs technical training. With a projected $4 trillion investment from outside non-oil sources the opportunity for an increase in employment and in total Saudi household income could be massive if the right path to growth is taken by the government. All in all, the economic and employment crisis that Saudi Arabia finds itself in can be alleviated by changes in government monetary policy that allows foreign investment in traditionally owned Saudi business infrastructure and in preparing its workforce to take the place of job openings now held by foreign laborers. Though the wheels of change in Saudi Arabia move slowly the commitment to change is certainly there.

 

Sources:
https://www.gfmag.com/magazine/october-2015/saudi-arabia-breaking-away
 
http://www.tamimi.com/en/magazine/law-update/section-11/may-8/an-overview-of-saudi-arabias-foreign-investment-and-employment-strategy.html
 
https://www.gfmag.com/topics/middle-east/
 
https://www.gfmag.com/magazine/october-2015/saudi-arabia-privatizations-could-help-plug-budget-gap
 
http://www.mckinsey.com/search.aspx?q=saudi+arabia+beyond+oil
 
 

<< View All