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 In early March, the Ministry of Labour announced that within six
months foreigners would be banned from selling and maintaining
mobile phones and accessories for them, in an effort to keep open
more jobs for Saudi citizens.
So Musa became one of hundreds of thousands of foreign workers in
Saudi Arabia who may lose their jobs and be sent back to their home
countries this year, as low oil prices slow the kingdom's economy
and prompt the government to restrict employment opportunities for
expatriates.
“I don’t know where else can I go - I don’t know any other job to
do," Musa, in his 30s, said in his small shop at a mobile phone
market in downtown Riyadh.
Millions of foreigners from south Asia, southeast Asia and elsewhere
flocked to work in Saudi Arabia during the economic boom of the past
decade, filling relatively low-paid posts in the oil industry,
construction and services as well as many middle-management and
professional positions.
Foreigners accounted for 10.1 million of the total population of
30.8 million in 2014, according to the latest official data. The
money they sent home was important for their home countries; they
remitted $9.1 billion out of Saudi Arabia in the third quarter of
2015, central bank data shows.
The inflow of people may now go into reverse. Saudi economic growth
is slowing as low oil prices produce a state budget deficit that
totaled nearly $100 billion last year, forcing the government into
spending cuts.
Many analysts expect gross domestic product growth, which averaged
over 5 percent annually between 2006 and 2015, to fall well below 2
percent this year. Partly because labor rules make it hard and
costly to fire Saudi citizens, layoffs in the early stages of a
downturn tend to hit foreigners almost exclusively.
Meanwhile the government, lacking the cash to create public sector
jobs for Saudis as freely as before, and worried that the official
unemployment rate of 11.5 percent among them could rise, is
intervening more heavily in the labor market to push Saudis into
jobs previously held by foreigners.
A top executive at a major Saudi company told Reuters in January
that he wouldn’t be surprised if one million foreigners had to leave
the kingdom by the end of this year.
"The economic changes have started to pressure the labor market, and
this has triggered the start of the migration of a large segment of
foreign workers," said prominent Saudi economist Fadl al-Boainain.
"Declining corporate profitability has made the foreign workforce a
target for managements seeking to cut fixed financial obligations.”
CONSTRUCTION
So far, layoffs have been concentrated in the construction sector,
which analysts estimate employs around 45 percent of foreigners. Hit
by shrinking state contracts and delays in payments owed to them by
the government, construction firms have been laying off tens of
thousands of people since last year.
“After 12 years in a stable job with a big company, I have started
to update my CV and send it to other employers,” said Abu Fadi, a
Palestinian-Lebanese engineer at a big construction company in
Riyadh which is facing a liquidity crunch and hasn’t paid salaries
to its staff since September.
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Abu Fadi, who has delayed his marriage plans until his future is
clearer, said some of his colleagues who had brought their families
to the kingdom were now unable to pay the rent. Some 5,000 technical
workers at his company have left, he said.
Job losses among foreigners look likely to spread to other sectors,
partly because of government policy. Labor ministry spokesman Khaled
Abalkhail said the ban on mobile phone sellers would affect about
20,000 workers, and that similar action would eventually be taken in
other industries.
“The labor ministry targets aim to create jobs for around 1.3
million Saudis...There are plans for gradual nationalization of
other sectors such as taxis, travel and tourism, real estate,
jewelry and vegetable markets,” he told Reuters.
Abalkhail said displaced foreign workers could try to find jobs in
other sectors. But it will be hard for many do so in a slowing
economy, and many lack training for skilled jobs. If they cannot
find a company to sponsor a work visa for them, they will have to
leave the country within about 90 days.
Even some highly paid foreign professionals are considering leaving
the kingdom because they see fewer opportunities as the flow of oil
money shrinks.
After more than nine years in Saudi Arabia, a British petrochemical
consultant in the oil-producing Eastern Province said he was
considering returning home as projects in the industry were
postponed and budget approvals were delayed.
“Last year was mostly fine, but the end of last year and this year
are the worst I have seen,” he said, speaking on condition of
anonymity because he was not authorized to discuss the economic
prospects of his firm.
A year ago, there were long waiting lists for foreigners seeking to
move into residential compounds for well-off expatriates in Riyadh
and oil-producing Eastern Province. The waiting lists have now
shrunk or disappeared, and more villas in the compounds are vacant,
residents say.
“Saudi Arabia continues to decline as a top destination for
expatriates...given the country’s higher dependence on oil revenues
and the extent of planned austerity measures,” Gulf Talent, an
online recruitment portal for professionals, said in a report this
month.
(Editing by Andrew Torchia and Peter Graff)
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