News You Really Need To See: “Saudi Arabia Squeezes Foreign Workers”

“Saudi Arabia Squeezes Foreign Workers”

The Wall Street Journal, March 7-8, 2015, p.A6

http://www.wsj.com/articles/saudi-arabia-puts-squeeze-on-foreign-workers-1425683630

“As Saudi Arabia grapples with falling income from oil, high unemployment among its citizens, and the continuing threat of domestic unrest, one section of society is being increasingly marginalized: the low-paid foreign worker.  Saudi authorities are exploring new proposals that could limit these expatriates to eight-year stays, discourage companies from hiring them, or give citizens a job-market edge in other ways.  Moves to restructure the labor force around nationals, called Saudisation, have been in progress for at least five years. But the need for change is more urgent as most nationals are employed by the government and falling oil prices are expected to pinch Riyadh’s budget. … The Gulf region will create about 600,000 jobs for nationals by 2019, but those jobs will provide work for only about a third of the youthful population due to enter the labor force, according to the International Monetary Fund. … Yet xenophobia has been bubbling up among Saudis, mirroring the rise in Europe of nationalist movements that have flourished under austerity measures introduced since the global financial crisis, not to mention the long fight in the U.S. over illegal immigrants.  The animosity in Saudi Arabia follows a government crackdown on illegal labor in 2013 that sparked deadly clashes between nationals and foreign workers.  Proposals to limit expatriate labor are also being discussed in other Gulf countries, including Kuwait and Oman. … Expatriate workers currently remain in the country on a residence visa that has to be renewed periodically; there is no program for citizenship.  Expatriate workers are currently about a quarter of Saudi Arabia’s population of some 30 million and about three-quarters of the private-sector workforce, of which 85% is deemed to be low-skilled, according to the IMF.  Saudi nationals make up the majority in the government sector and are paid about $2,000 a month on average, nearly double the private sector. … Saudis view many jobs as beneath them, and there are few industries where they work side-by-side with lower-income expats.”

Quickie analysis:  Squeezing expatriates won’t address the root causes of the problem: an “education” system that focuses on religion rather than real skills and a (male) workforce that isn’t terribly interested in working.

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