Impact of Foreign Employees in Saudi Aramco
Introduction
In the entire Saudi workforce, foreign workers comprise the majority. Reports by the Ministry of Labor in Saudi in the year 2014 indicated that there were about 10 million foreigners. Statistically, this workforce populace in a country of about 30 million people is huge. The report further stated that expatriate labor constituted two-thirds of the workers while the private sector provided for about 95 percent of the Saudi work. Saudi Aramco offers varied employment opportunities to both foreigners and the locals. It is prudent to note that Saudi Aramco is the largest energy company in the world. Exploration, production, refining, and distribution are some of the employment opportunities that have attracted a big number of foreigners to register their interest in working in the company. In addition to the above, expatriate employees have the advantage of living in modern houses, accessing better healthcare, better schools for their children among many other benefits. The competent packages that the company offers to its workers also attract a number of foreign workers.
Despite the above being the case, the Saudi government has recently engaged in activities that point to the possibility of preferring local workers to foreign workers. The past decade has seen the government embark on the ‘Saudiization’ project, an initiative which is geared towards increasing the employment of local Saudis. This move has been termed by many as aiming to reduce Saudi’s reliance on foreign workers. According to the government, this seeks to ensure that income is recaptured and reinvested, instead of flowing to overseas in form of remittances. This paper seeks to analyze the impact of foreign employees working in industrial areas in Saudi Aramco Company.
Availability of employment opportunities in Saudi, albeit on a contractual basis, has attracted a number of foreigners who seek to earn a living in Saudi. Such a significant increase of immigrants has a direct impact on the demographics of Saudi. In this case, sadly the impact has been a negative one. The proportion of the country’s population has deeply declined. Research shows that in the year 1974, locals constituted 89 percent of the total population. By the year 1984, however, the percentage had declined to 74 percent (Albahussain,, 2014). There are indications that there is a consistent decrease as more and more foreigners secure jobs in Saudi and stay there.
This impact has not been taken lightly by the government. In the wake of revelations that foreign workers provide a large portion of Saudi’s workforce, the government has moved to ensure that locals are given priority and consideration when it comes to matters of employment. Government statistics show that in the year 2003, about 7 million of employees in Saudi were foreigners. To implement its plan, the government introduced and prioritized the Saudiization project. Simply put, this was an initiative intended to encourage companies to employ Saudi nationals in various sectors of the economy. According to the government, such a move was geared towards ensuring that Saudi does not depend on foreign manpower. By extension, it would also mean that income is recaptured and reinvested (Albahussain, 2014). Taking all these considerations into account, it is clear that the Saudi government is against immigration of foreigners into Saudi. In the recent past, there have been several attempts by the government and all other stakeholders to ensure that expatriate workers are deported. Whereas there was a public outcry, the move makes economic sense.
Population growth may lead to two eventualities; either have a positive impact or a negative impact. In Saudi, however, the negative impact seems to overcome the positive impact. Most economists argue that the rapid population increase is as a result of the foreign workers (Alshitri, 2013). This, to them, has necessitated scramble for goods and resources. It has also led to scramble for employment opportunities and securing better jobs. Sadly, Saudi locals seem to lose when it comes to securing better jobs. This is at the expense of foreigners, who are always skillful than their Saudi counterparts.
Under the umbrella of demographic impacts, it is evident that foreign employees working in the industrial areas have led to a significant change in sex and age composition. Undeniably, sex distribution in the region is unbalanced; there are far too many males as compared to females. Such a misbalance can be attributed to the nature of jobs available in Saudi for foreigners. The nature of jobs available in this region can be said to be masculine. Most foreign employees are hired to provide labor and manpower in industrial areas in the Saudi Aramco company (Alshitri, 2013). In particular, machine shops and refineries absorb a number of employees. These jobs are predominantly masculine, meaning they can only attract men. Because of this, there has been an unbalanced sex distribution.
Social and cultural impact
It is prudent to note that Saudi receives expatriate employees from all over the world. This means that people of different linguistics, ethnicities and religious groups find their way into Saudi. The subsequent interaction in their places of work is most likely to lead to appreciation of a different culture.
Most of the employees in Aramco speak a language that is different from Arabic. As already intimated above, a majority of the employees are foreign; overshadowing the Saudi nationals. Because of the existence of several languages, there is no possibility that there is massive use of Arabic for communication purposes (Al-Otaibi, 2015). According to the available information, some of the most commonly used languages in the region include Bengali and Urdu.
Apart from language, the interaction of employees is likely to lead to cultural integration. Saudi is a dominantly Muslim community. However, some of the foreign employees are non-Muslims- Christians and Hindus. There is a feeling that such a move to welcome non-Muslims in the region has, to some extent, led to cultural invasion. Analysts argue that this has posed a major threat to the national identity.
Employing foreign workers in Saudi Aramco has led to a steady increase in crime rates. The presence of foreign employees in Saudi has had a direct link to criminal activities. Reports indicate that of the entire prison population, foreign workers consist of 51 percent. This means that most crimes are committed by foreigners, as opposed to the Saudi nationals. This has not gone well with the government, hence the move to ensure that foreign recruitment of employees is curbed. There is evidence that some of the crimes that the foreigners commit include moral offences, theft, fighting, larceny, murder, and sabotage among many others (Al-Otaibi, 2015).
The increase in the rate of crime has also been directly linked to employment of foreigners in the companies. Foreign workers, as a matter of fact, tend to be cheaper as compared to the Saudi nationals. Because of this, companies tend to rush for external employees at the expense of the locals. When this happens, unemployment rates shoot up among the locals. It is this unemployment that leads to lack of basic needs, forcing individuals to commit crimes in order to survive.
Economic impact
The economic sector of Saudi has been majorly hit by employment of foreign workers. First, nationals lack employment by losing it to the foreign employees who do not command high salaries. With such less employment opportunities for the nationals, it becomes almost impossible for them to invest (Alkuraya, 2010). It is because of this that external remittances to foreign countries is high. Foreign employees earn salaries and wages and channel them to their home countries for development projects. When this happens, development projects in Saudi stagnate. There is a need to deeply analyze this and come up with relevant rules and regulations on how this aspect should be handled.
There is evidence that across skills and occupations, foreign labor constituted about two thirds of the total workforce. This only leaves a third of the jobs to be taken by the locals. This ratio is worse in the private sector, where foreign labor accounts for about 95 percent. Foreigners have also taken advantage of the booming business to establish business establishments (Alkuraya, 2010). With this being the case, it would be prudent to argue that foreigners undermine job projects and investment opportunities of the nationals. As a result of this, there is a reduction of salaries and income.
In Saudi, the rate of unemployment has had a significant and steady rise, currently standing at around 13 percent. This is despite the fact that Saudi can produce graduates who can handle the jobs in question. One of the reasons of lack of jobs is international immigration. With Aramco consistently preferring foreign employees to the locals, there is no doubt that unemployment has been high among the nationals.
Employing foreign workers, to a large extent, connotes money transfer. In one way or the other this represents a steady process of draining economic resources. Unlike most countries, personal taxes do not apply in Saudi. This means that a large amount of the money that is earned is transferred. To the Saudi government, this is a drain on the economy, and mechanisms have been put in place to ensure that this is not the case. On an average, remittances by foreign workers in Saudi adds up to $15 billion. When this happens, the local community and the Saudi government does not benefit. Such remittances would have remained in the economy had employment been focused on the local nationals instead of rushing for the cheap exports.
Whereas the Saudi government does not directly benefit from the foreign employees, the inverse does not hold. Foreign employees enjoy various services that the government offers for free. A good example would be to analyze the free services and commodities that the government provides. Services such as electricity and piped water are provided by the government. Cooking gas and gasoline also fall under this category (Alshitri, 2013). A deep analysis of this position shows that foreign employees benefit from projects meant for the locals. The government’s attempt to provide the above-mentioned goods and services at a low price is meant to ensure that the locals afford the goods and services. However, this is not always the case as such foreigners enjoy the services for free.
Foreign employees that work in industrial areas in Aramco add to the already increased demand and consumption of imported products. Research shows that currently, there are about 1o million foreign workers in Saudi, with at least 4 million family members around. This great number means that consumption of products is high.
The Saudi government has had in place mechanisms through which it imports goods and services for the employees. This economic impact cannot be ignored.
Political Impacts
For quite a long time, there has been discontent from the Saudi locals that the foreign employees working in Aramco and Saudi, in general, may end up demanding for permanent residence. Such a move may see them seek to be considered as citizens in the future. Whereas this is not the case at the moment, the special treatment foreign employees receive and the fact that they are highly regarded means that they can easily be taken as belonging to the region. Giving them political rights means that they will be in a position to participate in elections. This empowerment may end up having a negative effect. This is because the foreign employees may not have the best interests of Saudi at heart. Consequently, their actions may be guided by malice and carelessness.
Impact of foreign employees on cities
As already stipulated above, foreign employees in Saudi have an impact in almost every aspect. It would be prudent to note that such effects may be felt in cities too. Foreign employees, in most cases, live in the cities where they offer their services. Their preference to city life is also premised on the urge to access most of the social amenities. With this being the case, it is natural that town houses and residents have an increased demand (AL-MEER, 2007). When this happens, housing prices also shoot up. In most cities in Saudi, the locals find it difficult to cope and afford these houses because they face competition from the foreigners. This has had a negative effect on the locals. Whereas investors interpret this to mean more revenues and more profits, the common men and women on the ground face the real challenges. Reports have shown that in urban areas and towns, foreign employees drive the economy.
The move, to a large extent, has also meant than urban life quality is in a decline. As already stipulated above, most foreign workers in Saudi prefer living in the city. With the employees being in large numbers, it becomes difficult to provide adequate housing and services to them. Their demand creates extra pressure on services and facilities that are already inadequate. Social amenities like hospitals and schools, as a result, are often congested. Such a significant decline in the quality of urban life in the region promotes a number of crimes. There is evidence that crime rates have sky-rocketed as a result of congestion. Traffic jams have also become a common phenomenon because of lack of enough road networks to accommodate all people who drive. This might not have been the case had the government controlled employment of foreigners in Saudi.
The Government Response to this Situation
It is evident that foreign employment in Aramco and Saudi in extension has more negative impact than the positives to Saudi than. This is ironical, taking into mind that most of the employers are the nationals of Saudi (AL-MEER, 2007). With this being the case, he government has put in place a number of mechanisms to handle the negative impact created by the foreigners. The government has sought to rationalize recruitment of foreign labor with the aim of striking a balance in the sector. This is the only way through which the standard of living of the locals can be boosted. In one way or the other, there is a move to increase or promote employment of locals at the expense of foreign workers. The argument argues that such a move is likely to reduce dependence on foreigners. To some extent, such a move is positive. However, there have been allegations that the Saudi government employs negative tactics in reducing and discouraging foreign employees.
The first major move taken by the government is restricting certain skills and jobs to locals only. This means that foreign employees cannot be hired or be employed to work on specific jobs. One can easily say that this move is discriminatory, as it ignores one’s competencies and suitability for the job (AL-MEER, 2007). With such restrictions in place, locals are given priority in securing certain jobs, despite the fact that they could be less qualified when compared to foreigners. The aim is to strike a balance and avoid a situation where much of the workforce is handled by foreigners.
Native workers, to a large extent, have been given subsidies as opposed to their foreign counterparts. The aim of the government is to reduce the salary differences that exist between native workers and foreigners. As already argued, foreigner workers in Saudi have better qualifications and enthusiast to the available jobs. As such, they are in a position to command better salaries and wages than the natives, creating an unnecessary imbalance altogether. To ensure that this is not the case, the government chips in to support the natives.
The latest move by the government entailed restricting the granting of visas to professionals. The Ministry of Labor stipulates that the natives should be given priority in getting jobs. IN fact, there has been a move to ensure that visas are only granted to professionals, whose expertise and appreciation of work cannot be locally found. This move means that other basic jobs that do not require a lot of skills are given to the natives. This way, it is possible to strike a balance between foreign employees and the native employees.
References
Albahussain, S. A. (2014). The Impact of Human Resources Management Activities on Employees Loyalty in Private Organizations in Saudi Arabia. JOEBM, 31-37. doi:10.7763/joebm.2014.v2.94
Alkuraya, F. S. (2010). Saudi genetic ophthalmology research: The local and global impact.Saudi Journal of Ophthalmology, 24(4), 109-110. doi:10.1016/j.sjopt.2010.07.001
AL-MEER, A. (2007). A Comparison of Need Fulfillment Deficiency between Saudi and Non-Saudi Employees in Saudi Organizations: An Analytical Study. eco, 10(1), 3-35. doi:10.4197/eco.10-1.3
Al-Otaibi, M. Z. (2015). Secondment of Government Employees in Saudi Arabia “Between Reality and Expectations”. Procedia Computer Science, 65, 1140-1145. doi:10.1016/j.procs.2015.09.033
Alshitri, K. (2013). An Investigation of Factors Affecting Job Satisfaction among R&D Center Employees in Saudi Arabia. JHRMR, 1-10. doi:10.5171/2013.279369
Questionnaire to be used in collecting information from Saudi employees
Kindly tell us your country of origin
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What type of work do you do in Saudi?
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What is the average pay of the job per month?
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How many days do you work in a month?
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How did you know about the employment in Saudi Aramco?
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What do you like about the company?
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What do you hate about the company?
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If you were given the authority, what would you change in the company?
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What effect does working in this company have on your family?
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What any other comments would you make about the company?
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