Is it a good thing to hire foreign workers when there is unemployment?
Introduction
Saudi Arabia is facing a number of challenges in the form of reduced revenue from oil companies, increasing rate of unemployment for its citizens, persistent threats from domestic unrest etc. In this context, one of the sections of the society is tremendously being marginalized, that is the foreign workers who are being paid quite less. In order to cope with the issue of unemployment, the authorities of Saudi Arabia is looking for proposals in which it would be preferred to limit the foreign workers to 08 years stays in their country. In such proposals, companies are discouraged from hiring them and a fair chance should be given to their own citizens in the job market. The government of Saudi Arabia had reduced the recent years’ reward due to the fears and shrunk of the unrest, owing to which the subsidies for food, utilities, and fuel have been boosted up. Unemployment benefits have also being paid by Riyadh.
As per the statistics provided by the IMF, the foreign workers are approximately the quarter of the population of Saudi Arabia, which is about thirty million. It is about three-quarters of the workforce of the private sector and is noted as 85%. On average, about dollar 2000 is being paid per month in government sector by Saudi nationals, which is approximately double to the private sector. As per the latest figures provided by the central department of the statistics and information, the ratio of unemployment is 11.5% among the nationals of Saudi Arabia which is about 0.2 percent among the expatriates .
Unemployment Issue
In order to cope with the issue of unemployment, there is a dire need to implement strategies which would be able to solve the structure related issues in the labor market; monetary and fiscal policies would not solely solve the issue. This was due to the reason that at that time, the economy was boosting and needed not any stimulus. The objective was that the private sector may be allowed to take the challenge to create job opportunities for citizens of Saudi Arabians by reducing the rate in private companies.
Labor laws have also been initiated due to which deportation has been caused about 20% of foreign labor. This rate has reduced the competition between the expatriates and natives of Saudis. Finally, the issue of reluctance for working due to low wages was addressed by the companies, by introducing wages at the minimum level for Saudis. This would, in theory, enhance the unemployment, due to the reason that the available people willing for working would be less under minimum rate for wages. But in the case of the Saudis, the jobs were existed as the demand was created by other projects .
As per the statement was given by Khashoggi, most of the people in the Saudi Arabia at that time did not need the work which was held by the foreign workers. He further added that most of the Saudis avoid taking jobs which are considered as a lower class; for instance, the job of auto mechanics or taxi drivers. These kinds of jobs are generally defamed, not due to the reasons that skills are not required but due to the reasons that foreign workers occupied them. Works are being carried out by the government to let the Saudis indulge in the labor force. However, it is not expected that better results would be achieved with short span time, as per statement was given by Adviser of the ministry of foreign affairs of Saudi Arabia, Mr. Hamdan-Al-Shehri. The people of Saudi Arabia will not want varying jobs, therefore, the foreign workers need to be involved in the work .
It is significant to mention here that the recent unemployment condition was not at all unanticipated. The issue of employment is virtually discussed in every meeting regarding the economic plan of 2000-2004. The basic objective of the plan is to create opportunities for jobs through growth and economic diversifications resulting from huge liberalization, privatization, restructuring, reforming and opening up of the economy. The plan’s objective is to expand the economic potential of the nation as depicted in higher investment and productivity. This plan is considered as the only solution for the creation of new jobs for the unemployed people of Saudis. The plan aims to reduce the dependency of the workforce from foreign countries, and it is anticipated that about 2-3 percent per year reliance would be decreased on expatriates .
Other Issues
It has been observed that many labor issues have been faced by the country but the fixing of the system has been changed. Even under the tenure of King Abdullah, it was known by the authorities that huge problems existed in the country. In this context, in the year 2103, crack down on immigration of illegal immigrants were started after the end of 07 months amnesty. It was calculated that about four million of the laborers from Philippines, Bangladesh, Nepal, Yemen, Pakistan and India took benefits of this absolution and left the country.
During past few years, the definition of illegal worker in the nation has been amended. The workers having to stay more than prescribed are considered illegal and the person who harbors these labor are also considered as disobeying citizens and are liable to be handed over to police. In this pretext, the policy of zero tolerance of illegal workers in Saudis is being implemented. Data reveals that about 10,000 people in the current year have been departed. Very stringent laws have been designed to cope with the issue of illegal immigrations of foreign workers and against those by whom the illegal workers are being protected.
Despite the main producer of oil in the world, the government of Saudi Arabia is facing huge difficulties for providing jobs to the young generation of their country who are unemployed. The unemployment problem of the kingdom is due to the basic and regular shortcomings, like education’s lacking, the existence of a conservative society which does not allow women to work with men and persistent private sector dependency on the foreign workers.
In a nation where the population (two-third) is comprised of people who are younger than thirty years, and where in every year about 100,000 young people graduating from universities and enter the market for seeking of jobs, it would be quite difficult for such nation to tackle the issue of unemployment. In this pretext, very hard measures are to be taken by the government. Such measures include; reducing stifling grip of Saudi government upon the private sector, enhancing the vocational training for higher education and relaxing the restriction of women of Saudi for the workforce. Increased prices of oil in the international market and enhanced production have created an opportunity for boosting up the economy of Saudi Arabia. The data of last four years reveals that average annual growth in the economy of Saudi is observed as 6.25 percent.
Yet with this boom, in respect of job opportunities, no significant advantage was taken as most of the new jobs were occupied by the foreign workers. It has been observed that traditionally the companies are quite reluctant to give employment to the Saudis, who are being paid by the companies better as compared to the nationals and also enjoy job protection. There is another fact that the people of Saudi Arabia prefer public sector over the private sector since the benefits to the private employees are low and salaries are less as compared to the employees engaged in the public sectors. The private sector usually demands more working hours and some time has unattractive packages.
Most importantly, as per the basic interpretation of the Islam, it is considered as a violation of the will of the God that unknown women and men can mingle. Subsequently, there are a number of restrictions on working of women in men’s market. With the passage of time and introduction of women universities and institutions, a number of women are being graduated annually. This trend has been increased tremendously and has never observed ever before. This trend has created a big challenge for the government to integrate the women into the current workforce in the public or private sector.
Measures
Actions and laws have also been framed against the foreign nationals who are engaged in this crime. This business of illegal immigration was lucrative for some of the Saudis as the desperate foreign workers are ready to pay a handsome amount of sponsorship for immigration. Therefore, laws have been amended so that only legal immigration could be sponsored by these Saudis .
Foreign labor has been playing a significant role in Saudi Arabia and for the last few decades, Saudis are dependent upon these foreign workers. Due to this reason, a huge number of nationals of Saudi Arabia have become unemployed. Particularly, the hiring of foreigners by the private sector is being preferred. As per statistics provided by Ministry of the Labor in Saudi Arabia, about 6.5 million of expatriates have been provided with jobs by the private sector. On the other hand, the data reveals that only 700,000 of the Saudis are employed by the private sector. To cope up with this issue a law namely; ‘Nitaqat Law’ has been enforced about 03 years ago, wherein, the private sector is to give preference for employing the locals over the foreigners .
In Saudi Arabia, there is a high rate of unemployment in men and Saudis is to struggle hard against it, therefore, a deportation policy has been launched by the kingdom. This deportation campaign is characterized as the largest campaign in the Middle East in the recent history. As per the statement was given by Interior PM of Saudi Arabia, Prince Mohammad Bin Nayef, approximately 60,000 workers have been expelled out from Saudi. He further added that in coming years about two million workers are expected to be expatriated.
It is commented that whether implementation of this wide strategy can reduce the rate of unemployment in the Middle East where there is a population of about 29 million. The Saudis are now reluctant to have menial jobs, therefore, such jobs are held by the foreign workers. While European and United States dominate job-related to higher skills, the awesome majority of the foreign workers are not highly skilled, working in the fields of cleaning, domestic services, and agriculture. Southeast or South Asians from the developing countries like Pakistan, India, Bangladesh, Philippines, Sri Lanka, and Indonesia fill such kind of jobs. Foreign workers are also coming from the Middle East, come from Yemen, Egypt, Lebanon and Jordan which are also developing nations .
Reasons of Hiring Foreign Workers
The main reason for hiring the manpower from abroad is non-availability of skilled or unskilled manpower within the nation. It is estimated that the need of human resources for various projects is not being met by the local population. Therefore, most of the Southeast Asians and South Asians have migrated during this period to the Saudi Arabia. The migration of workers pertaining to Asia was encouraged especially due to the reasons that they are not well settled and organized, so, therefore, can easily be controlled. The main reason for the enhanced migration of these Asian workers is the huge commencement of construction projects in Saudi Arabia. Although the pace of such project during the period 1980 was reduced significantly, yet the migration remain continued in Saudi Arabia.
This rate of migration indicated that the demand for the foreign workers has been shifted to some other sector of the Saudi economy. Generally, the foreign workers after sponsoring of service visa by a company of Saudi Arabia or by an individual enter into the kingdom. The renewal of the visa initially is the sole responsibility of that particular company. The company also manages the residence permit of the employee after a period of two years and consequently, renewal of documents of the employees after four years each. The communities of the expatriate are flourishing in the kingdom. The community is asking for the government that the value of their work should be recognized. They are also demanding that they should be allowed to have access to the labor market of Saudi Arabia .
Conclusion
A number of measures have been taken by the government for employment of young slots. However, speedy fixes are not available and unemployment cannot be eradicated altogether from Saudi Arabia and it is expected that in coming years it would be a big headache for Saudi Government. In the persistent unemployment circumstances, it is very risky as in every year young Saudi graduates are entering in labor market every year . Therefore, the government needs to not only stop hiring foreign workers but should also restrict their entry in the country to curb the situation to re-surface again. The government needs to encourage hiring of locals as compared to foreign workers in order to reduce unemployment in the Saudi population.
References
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