Saudi citizens double in private sector

January 21, 2014 8:39 am

In what seems to be an ongoing push to employ more Saudi Arabian citizens in the private sectors, a recent update shows the 101 per cent increase on the matter in the past 30 months with 1.5 million Saudis employed. “Saudi Arabia has doubled the number of its citizens working for private companies in the 30 months since it introduced wide-ranging reforms to tackle long-term unemployment,” says Saudi Arabian labour minister, Adel Al Fakeih, in terms of the Saudisation law that was instilled back in 2011.

The Saudisation law was implemented in order to address the Saudi unemployment problem, hence the purpose of the law is to include more Saudi nationals in the private sectors and promote the active participation of the Saudi citizens thereof. Furthermore, most Saudi nationals are employed by the government, which causes a strain in the government’s budget, so the expansion into the private sectors is the ultimate plan to resolve this.

With ten million expatriates working in the private sectors, only 30 to 40 per cent of Saudis are employed by the private sector or seeking to work in it, making the official employment rate approximately 12 per cent, according to Reuters. Yet, with the ongoing demand for private sectors to employ more nationals, there is the visible issue that not all Saudi citizens are necessarily qualified for these jobs. Therefore, the labour ministry has introduced unemployment insurance to ease the rules that the government has instilled and give companies more flexibility to fire workers who do not perform well, according to Al Fakieh. Hence, the unemployment insurance is compensation for the Saudi employees who are laid off and is more of an incentive to push them to look further for jobs.