Saudi Arabia to restrict 43 retail professions to citizens from Tuesday

Kingdom targets retail sector to create jobs and cut unemployment among its nationals

The Riyadh skyline. Inflation in Saudi Arabia is set to moderate in 2019, Fitch Solutions says. Reuters

Saudi Arabia’s decision to restrict 43 professions in the retail sector to its nationals will come into force from Tuesday.

It is part of a government effort to cut unemployment among Saudi Arabia's young people.

The labour ministry will restrict employment in 12 retail sub-sectors to Saudi nationals over three phases. More than 40 types of retail professions, including those dealing with cars, clothes and furniture, will be off-limits to expats.

“Those who violate the decision that aims to replace foreign workers with Saudi workers in these activities will be subject to penalties mentioned in the law,” the ministry said in a statement.

Saudi Arabia is targeting the retail sector to cut unemployment, which stands at 12.8 per cent. The move highlights the challenge of creating jobs as the kingdom's economy recovers from the worst slowdown since the 2008 global financial crisis.

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More professions in other sub-sectors were to be barred to expats from last Sunday. These included jobs in shops selling watches or electrical appliances, according to the labour ministry.

From January 7 next year, 44 designations within five other sub-sectors will be exclusively for Saudi workers. These will include jobs dealing with medical supplies and equipment, auto parts, building and construction materials, carpets, bicycles and confectionery shops.

“The move comes as part of the Ministry of Labour and Social Development’s efforts to empower Saudi men and women in the workforce and raise their participation in the private sector,” the ministry said.

Job creation is a priority for the kingdom’s Crown Prince Mohammed bin Salman, who is leading the country’s plan to wean the economy off its reliance on oil.

Under this National Transformation Plan, the government is aiming to cut unemployment among its nationals to nine per cent by 2020.

Saudi Arabia also wants to increase women’s participation in the labour force from 22 per cent to 30 per cent over the next 12 years.

With two-thirds of Saudis employed by the public sector, the government is targeting job creation in the private sector.

Murtaza Khan, partner at immigration consultancy firm Fragomen Worldwide, said: “As Saudisation has been an integral pillar of government policy, efforts aimed at increasing national participation in the workforce are likely to continue until lower rates of unemployment exist among [Saudi] nationals.”

Other GCC countries operate nationalisation initiatives, implementing hiring freezes or reserving certain jobs in the private sector for their own citizens.