“The majority of foreigners in the country are from the Middle East and Asia, many employed in low-paid jobs in the sectors now earmarked for Saudis.”
Dr. Mohammad Bassnawi, a columnist for the Saudi Gazette, recently wrote: “Over time, companies began circumventing the regulations surrounding the Nitaqat program. Many companies hired Saudis and paid them small salaries for what in effect were fake jobs. These Saudis did not carry out any tasks and did not even report to work.”
He added: “The World Bank criticized the Nitaqat program because it left companies no choice but to give Saudis fake jobs and “hire” them just to meet the requirements of Saudization. In its report, the World Bank said that only 10 percent of real job opportunities were given to Saudis; in other words, around 20,000 jobs out of 200,000 a year were provided to Saudis by the private sector. The rest were fake jobs.”
In February, the Saudi Gazette reported that a number of heads of chambers of commerce and industry had called on the government to exempt the private sector from “100%” Saudisation, especially posts that are hard to fill amid concerns that many businesses may close down.
Karen E. Young of the Arab Gulf States Institute in Washington wrote in February that it will take a decade or more to create a working class of Saudis willing to do service sector, retail, and construction jobs.
In May, an item revealed that over a three-month period over 5,000 fines were issued to businesses breaching Saudisation rules in sectors ranging from telecoms to hotels to car rental.
Funds that Saudi needs
BI said Saudi hopes to generate some $17.33 billion through the new expat taxes by 2020 in order to help address the budget deficit — projected to be $52 billion in 2018 — and finance new economic projects.
Fortunately for the country, a rebound in the price of oil has provided some financial respite. Foreign reserves, which have in part been used to finance the budget deficit, experienced a month-on-month rise of just over $13 billion, to nearly $499 billion, in April, still way down from their peak four years ago, when they stood at $737 billion, reported BI.
Brexit giving Saudi a way out of a crisis
Brexit will lead to stronger trade and investment opportunities between the UK and Saudi Arabia, and attracting listings such as Saudi Aramco would be among a string of important deals Britain hopes to secure after it breaks with Europe, according to Chris Innes-Hopkins, UK executive director for the Saudi British Joint Business Council (SBJBC), reports Albawaba, a business site.
“Brexit does provide many opportunities for the UK and Saudi Arabia,” he said, speaking to Arab News after his address at the 12th BMG Economic Forum at the London Stock Exchange Group on Wednesday.
In March, the UK and Saudi Arabia agreed to a goal of $90 billion of mutual trade and investment in the coming years during a meeting between the UK’s Prime Minister Theresa May and Crown Prince Mohammed Bin Salman.
“There are lots of areas where they and the Saudi Stock Exchange (Tadawul) can work together. Obviously, post-Brexit, we are very keen to work with the Public Investment Fund (PIF) of Saudi Arabia to attract more Saudi investment into new sectors in the UK,” he said.
“There are a lot of new sectors including education and health care reform, smart cities — and not forgetting entertainment and tourism — where UK companies can help and get involved to implement new projects and provide the assistance needed that will support the grown small and medium-sized companies (SMEs) in Saudi Arabia.”
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