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 Policy makers fear a failure to create a productive local workforce
will leave the kingdom vulnerable to any future fall in oil revenue.
Despite the lack of any significant protests during the 2011 Arab
uprisings, they were uncomfortably aware that unemployment
contributed to unrest in neighbouring countries and worry about the
long-term risk of political instability.
"At this point in time the employment in the private sector is about
1.5 million. This is 101 percent more than it was 30 months ago,"
the minister said at a conference in Riyadh.
Although the official employment rate is around 12 percent,
economists estimate only 30-40 percent of working-age Saudis hold
jobs or actively seek work.
Most Saudis in jobs are employed by the government, but it cannot
support such a large wage bill in the long term, and the
International Monetary Fund has warned that the private sector must
meet future job demand.
Most private-sector jobs are held by the 10 million expatriates in
the kingdom.
In 2011, after decades of ineffective localization policies, Riyadh
imposed stricter penalties for failing to meet quotas for hiring
Saudi citizens.
In 2012 it also introduced a levy of 2,400 riyals ($640) a year on
every foreigner a company employed over the number of its Saudi
workers.
Fakeih later told reporters that the increase of 750,000 jobs over
the past 30 months only included those who had remained in the
workforce, but that around 500,000 others had taken jobs and then
left.
He added that since the reforms were introduced, the average
starting salary for Saudis had risen and that graduates of technical
training colleges now found a job on average five months after
qualifying, as opposed to 13 months in 2011.
EXPATRIATE CRACKDOWN
Some companies, particularly in labour-intensive industries such as
construction, have complained that the reforms have caused
bottlenecks in important projects and cut profits by increasing the
wage bill. Expatriates are typically paid less than Saudis.
Others have said they struggle to find qualified Saudis to replace
expatriates despite high government spending on university
scholarship programs and technical training colleges. They have also
complained that employment rules make it too hard to fire Saudis.
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Young Saudi job-seekers often say they are reluctant to look for
work in private companies, because government agencies offer better
pay, benefits and job security.
Last week Riyadh announced it was introducing unemployment insurance
for Saudis who lost their jobs for "reasons beyond their control"
and who had been in work for more than a year. The policy was
designed to encourage more young Saudis to look for jobs in the
private sector.
On Sunday Fakeih said the introduction of unemployment insurance was
also designed to "make it easier" for the government to relax
employment rules and give companies more flexibility to fire workers
who did not perform well.
Fakeih also said a crackdown last year on foreigners breaking visa
regulations by working for companies that did not sponsor their work
permit was necessary to close loopholes that allowed employers to
dodge hiring quotas.
Previous attempts to localize the Saudi labour market have foundered
because companies could hire lower-cost foreigners who were
registered to other sponsors.
But more than 1 million expatriates left the kingdom between March
and November during an amnesty for foreign workers to leave without
paying fines for visa violations or to switch their sponsorship to a
new employer.
(Reporting aby Angus McDowall; additional
reporting by Marwa Rashad; editing by Andrew Heavens)
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