By FAHD BIN ABDULLAH AL-QASIM | AL-EQTISADIAH
Published: Jun 1, 2011 23:46 Updated: Jun 1, 2011 23:46
UNEMPLOYMENT was — and still is — one of the most conspicuous social, economic and security problems in the country. In my opinion it is the topmost persistent local issue that needs a quick and comprehensive remedy. Unemployment is deep and chronic.
The problem is not in the high unemployment rate alone, but also in its fearfully constant rise. The available jobs in the near future are not commensurate with the large number of graduates entering the job market each year. Subsequently, the number of the unemployed will steadily rise at a time when all efforts made by the Labor Ministry to find a solution to this problem have failed.
The failure of the ministry does not necessarily reflect a shortcoming in its performance. The problem, in my opinion, is not the sole responsibility of the Labor Ministry. The largest burden lies on the shoulders of other parties. Many other government departments are equally responsible. They include, among others, the Ministry of Commerce and Industry, the Saudi Arabian General Investment Authority and the ministries of Interior, Civil Service and Economy and Planning. Blaming one party for the problem is unfair.
The main solution to the problem of unemployment lies in creating more job opportunities. Replacing foreigners with Saudis is not enough. We need to give more incentives for investment, amend regulations and provide financial, regulatory and service support to the commercial and industrial businesses.
The process of Saudization cropped up as a possible solution to the problem of unemployment. But like unemployment, its responsibility is not limited to the Labor Ministry alone. There are many other government parties responsible for the success of Saudization.
During the past few years, the Labor Ministry took over the burden of resolving the problem of unemployment and making the process of Saudization a success — as if it is the only government body responsible for this. I would not be exaggerating to say the ministry has launched a campaign against the private sector, a battle that depends on power and strength of the ministry. The war is still raging.
Lately, the labor minister surprised us with what he called the Nitaqat program. He described this program as one that would lead to the nationalization of jobs. The idea of the program is based on treating private sector establishments with high rates of Saudization than those with low rates. The program provides gradual incentives to the establishments according to their rates of Saudization.
The new program lays down guidelines for private sector companies and establishments with regard to the employment of more Saudi nationals. Under the program, the establishments are classified into three categories: green, yellow and red. The establishments with high rates of Saudization will be grouped within the green zone while those with less Saudi employees will be classified in the yellow and the red zones.
Green establishments will be given the freedom to choose, employ and transfer the work visas of the foreign workers in the yellow and red establishments without those companies’ consent.
It is supposed that the rate of Saudization in each establishment would be assessed by the actual achievements in each establishment at the time of the evaluation. Therefore, there will not be a unified or semi-unified criterion for evaluation of all the private establishments.
The program will prevent the companies from recruiting foreign workers if the rate of Saudization has gone down below a certain limit. It is a negative program that presupposes bad will in all establishments. Its main feature is that it depends on incentives rather than punishments. It severely punishes the yellow and red establishments while giving unprecedented incentives to the green ones. So in a nutshell we can safely say that the incentives and the extra privileges are the driving force behind the program.
The private sector does not fear the program itself but its application and the lack of understanding and experience on the part of the executive parties in the ministry. There are also apprehensive of the comparison between the large and small establishments in the sector itself. When deciding the rates of Saudization can we compare companies with billion riyals capitals to those with hardly SR100,000 as their capital? Can we compare establishments with thousands of employees to those with 20 or less? Can we compare between an establishment which is based in Riyadh with another one based in a village or a hamlet? We have to find a solution for these comparisons when fixing the rate of Saudization at each category.
Nitaqat program should be kept away from “Wasta” (intermediaries). It should also be kept away from the government red tape. Saudization should be applied with fairness and justice not only to the citizens but to the businessmen as well. We should concentrate on public interest so that Saudization would not have an adverse effect on the quality of services.
The Labor Ministry and the other concerned government departments should realize that Saudization is a collective responsibility and that its bill should not be paid by the businessmen alone. These ministries should also be vigilant so that Saudi youths are not exploited under the pretext of Saudization.
I suggest that the Labor Ministry keep records of employed Saudis: their dates of employment, their moves and transfers and if they are legally condemned at any time. Therefore, the Saudi employee who is problematic and who is always going from one job to another should not be given the same incentives to the ones given to a committed and an honest Saudi employee. These records should be open for the private sector to see. This is another Nitaqat program but for individuals not establishments.
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