Saudi Arabia moves towards a future without expatriate workers

Theodore Karasik writes about the challenges in Saudi Arabia as it transitions to an almost all-Saudi workforce

Expatriate labourers account for roughly a third of Saudi Arabia’s 27 million population. Faisal Al Nasser / Reuters
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Now that Saudi Arabia has a new king, buzzwords connected to the employment-visa regime are becoming part of the vernacular.

These words include Musaned, the Saudi labour ministry’s electronic portal to bridge the gap between employers and employees, and Doroob, a recently launched national programme to provide “upskilling” for Saudi nationals.

What they reflect is the kingdom’s goal to stop relying on expatriate workers and to transition to a nearly all-Saudi workforce.

Expatriate labourers account for roughly a third of Saudi Arabia’s 27 million population, but 12 million Saudi nationals need jobs and millions more will soon be old enough to enter the workforce in the near future.

There is no doubt that the country faces many labour problems but what has changed is the urgency about fixing the system.

Even under King Abdullah, the authorities knew that there were huge problems. In 2013, they began to crack down on illegal immigrants after the end of a seven-month amnesty. Four million labourers from Bangladesh, the Philippines, India, Nepal, Pakistan and Yemen, among others, took advantage of the amnesty and left.

The definition of who is an illegal worker has changed in the past few years. Workers who overstay are deemed illegal and whoever harbours them can also be detained by the police. There is now a zero-tolerance policy on illegal workers and 10,000 people have been deported this year.

The tougher laws are designed to address a loophole that made a distinction between Saudi nationals who protected illegal workers and foreign nationals who did so. Foreign workers desperate to work in the country were willing to pay for sponsorship and this became an illegal but lucrative business for some Saudis. That is why the labour laws were changed so Saudis could only sponsor those they would employ directly.

Under King Salman, further change is in the works. In his first major speech on domestic and foreign policies, he called for new programmes to promote national unity and economic development. He indicated the need to provide more job opportunities in both the public and private sectors and for more medium and small enterprises. He did not mention expatriate workers.

It is obvious that the paramount need is to guarantee jobs for Saudi graduates. Roughly 45 per cent of university students are studying subjects that do not have a technical or vocational focus to prepare them for the job market.

The Ministry of Education’s Doroob programme aims to match education with the labour market through courses such as interpersonal training, English language skills and computer skills. Training courses for specific jobs, such as to be a retail sales assistant, hotel front desk clerk, and IT support assistant, are also available.

Both Musaned and Doroob are meant to provide the bridge between a Saudi Arabia reliant on expatriate workers and one with a Saudised workforce, but the demands of Saudisation have made for some confusing signals.

The Ministry of Labour, for example, has been putting out conflicting reports how long expatriate workers will be allowed to work in the kingdom. Some suggestions include it being based on a point system, that the limit will be eight years and it really will mean no renewal of a work visa.

Some analysts, both Saudi and foreign, are saying the kingdom is trying to match other Gulf states that are reassessing how long expatriates can work.

Saudi bureaucrats opposed to changing the labour law, particularly limits to the iqama employment visa scheme, point to the tens of thousands of contracts being postponed or cancelled as the world waits to find out what the new rules will be. Some worry that the loss of expatriate expertise will hurt the Saudi economy.

Even many of those who accept the need to limit foreign workers and address their effect on the labour market believe this is a long-term project. Both Musaned and Doroob are key components but their full impact will take time. In the meantime, Saudi bureaucrats and labour agencies are ensuring their concerns are heard.

The problem is that the country is not explaining clearly to foreign observers and foreign workers currently there the links between the two programmes. There needs to be an information campaign in multiple languages to inform the millions who will be affected by these changes, now and into the future.

Dr Theodore Karasik is a Dubai-based analyst on the Gulf with a specific focus on Saudi Arabia