The kingdom wants more Saudis in the private sector as part of its Vision 2030 economic strategy but many are reluctant
RIYADH - Saudi Arabia is the world’s largest exporter of crude oil – but the kingdom is overly dependent on black gold.
Now it wants to rapidly reform and diversify its economy under the Vision 2030 plan, the country’s biggest and most radical economic change in decades.
The strategy was launched in April 2016 by Prince Mohammed Bin Salman, deputy crown prince and the most powerful man in the kingdom.
Prince Mohammed Bin Salman launches Vision 2030 in April 2016 (AFP)
One of its fundamental goals is to halt Saudi’s traditional reliance on foreign labour in the private sector, instead employing Saudi nationals, but that’s proving a tough sell to locals.
In Saudi, public employees only work around 35 hours each week, take two days off each week and enjoy generous health and pension provisions.
That contrasts with a 48-hour week in the private sector, only one day off each week and no automatic national and religious holidays.
Take Ahmed Sultan, 25, a young civil engineer at a government ministry and one of the Saudi twentysomethings who broadly backs Vision 2030.
In a crowded cafe in the Rimal neighbourhood in Riyadh, Sultan and his friends discuss the reforms. They are part of the generation that Prince Salman – himself only 31 - is trying to inspire. Around them mill waiters serving beverages and hookah, conversing in Filipino, Egyptian and Syrian dialects. It’s the type of manual work, be it in restaurants or shops or factories, that’s undertaken by few Saudis.
But while the seated men are hopeful about the kingdom’s wider economic plans, they are apathetic about key elements of Vision 2030.
Sultan said he has never considered working for the private sector since he graduated from King Saud University – and wouldn’t want to.
A Filipino cafe worker in a Riyadh cafe (Islam Alzeny/MEE)
“I cannot endure physical exhaustion,” he said. “The high temperatures in the summer are utterly unbearable.”
It’s not just the air-conditioned office Sultan can’t leave: he refuses to take any job in the private sector, even as an engineer – despite Vision 2030’s urgent need of the profession.
“It is unlikely that I will someday leave my comfortable office work for another job that is arduous,” he explained. “We also serve the society. Each sector has its own people.”
The problem with the public sector
But Saudi has to cut its public sector wage bill: government employees constitute roughly half of the annual budget of the kingdom, making them an obvious target for Vision 2030.
The number of foreign workers is estimated at more than 10 million workers, the majority of them in the private sector. ِِAccording to official statistics, 88 percent of foreigners in the Saudi private sector in 2016 are in low-paid jobs, receiving less than 3,000 Saudi riyals - or $800 - each month.
Replacing those workers with Saudis makes sense, easing the public wage bill and cutting unemployment. The Shura Council is doing its best, for example trying to cut working hours for private employees, but it has faced criticism and warnings.
Saudi is an inherently conservative society where Islamic sharia laws are strictly enforced. Many nationals believe that working in the private sector is inherently unsettling, if not demeaning.
Mohsen Al-Sheikh who presents a television talk show called Jobs Live said: “Some families prohibit their daughters from being married to men who undertake such jobs as it is deemed to be socially unacceptable.”
Six months after launching 2030 Vision, Saudi Arabia has managed to cut the budget deficit from 367bn riyals ($98bn) to 297bn riyals ($79bn) in 2016.
But austerity has sparked public uproar, especially among unemployed Saudi youth, many of whom want to work in the private sector – but with the benefits and comfort of public employees.
Some have taken to social media to point out that there is work to be done:
وفقا للتأمينات الاجتماعية: انخفاض العمالة السعودية بالقطاع الخاص أول 9 أشهر 2016 بنحو 50 ألف عامل وارتفاع غير السعوديين بنحو 171.4 ألف عامل! pic.twitter.com/JFV78zwibv
— عبدالحميد العمري (@AbAmri) January 20, 2017
Translation: “According to social security, the number of Saudi workers in the private sector, dropped in the first 9 months of 2016 by around 50 thousand workers, and the number of non-Saudi workers has risen by around 171.4 thousand workers."
...while others say that preference is given to foreign workers...
— عبدالعزيز (@Therefore990) December 25, 2016
The image shows a Saudi employer pouring water into the mouth of a foreign worker while ignoring the desperate Saudi worker. Translation: Hashtags #Saudis_first #Saudi_forSaudis #Reducing_number_of foreigners_is popular_demand #Deportation_of foreigners_is national_demand
— علي شرارهـ (@aboaseelo1) July 19, 2016
Translation: Saudi employer on the right telling Saudi: Don’t you know our economic situation, have you considered our circumstances? Saudi employer on the left telling foreign worker: “Forgive us for our shortcomings and for the salary which is less than you deserve"
Habib Turkistani, professor of economics at King Abdulaziz University, said: “The government cannot continue to finance projects alone over the coming years and must rely on privatisation as an effective part of future funding.”
An Afghan construction worker in Riyadh few Saudis are employed in the industry (Islam Alzeny/MEE)
Riyadh can’t keep bringing in more foreign workers as before, Turkistani explained. Rather, the government needs to better sell the idea of working in the private sector to Saudi youth, for example, by offering enhanced benefits.
A government official at the ministry of economy and planning, speaking on condition of anonymity, told MEE: “The extended work hours make it preferable for Saudis to choose the government sector over the private. We currently hold weekly governmental meetings to change the status quo.
Saudi students sit final high school exams in Jeddah in May 2015 (AFP)
“The type of work performed by non-Saudi nationals normally does not require skilful labour. It can be substituted with Saudi workers with an average educational level - but still it takes time for this to materialise.”
One of Vision 2030’s most important goals is education, especially in the private sector. Foreign teachers usually come from Egypt, Jordan and elsewhere because their salaries are not on a level with those in the public sector.
Salem Ibrahim, who works as a teacher at a secondary school, said it is still too early for many Saudis to be part of the private sector. “We still need many years before the Saudi citizen who has always been accustomed to the luxurious lifestyle to consider landing a job at a factory,” he said.
Wanted: More Saudis in key sectors
What is especially worrying is that there were only 40,000 new jobs for Saudis in 2015 – lower than in 1999.
If the employment targets of Vision 2030 are not met, then unemployment among Saudis themselves is predicted to soar to 22 percent by 2030, according to McKinsey - double the overall current rate and more than three times the target of the economic plan
Ihsan Abu Haliqa, a prominent Saudi economist and former head of the finance committee of the Shura Council, said: “Nearly half of Saudis are younger than 25. The unemployment rate jumped to 11.8 percent last year, the highest since 2012.”
That reliance on foreign workers has also cost Saudi dear in other ways. According to the Saudi Central Bank, $36.9bn left the country in the form of foreign remittances between January and November of 2014, .
Another problem is the range of sectors in which the share of Saudi workers is in decline.
The Maaden Aluminium Factory in the Ras Al-Khair area near Jubail City in November 2016 (AFP)
Fawaz Al-Alamy, a former deputy commerce and industry minister, reeled off the list: agriculture, urban expansion, transportation, storage wholesale and retail trade, transport.
“There is a need to restructure the outcome of the Saudi education system,” he explained, “so the citizens can be able to hold executive and technical positions in the private sector.
“We also have to better organise the relationship between technical education and economic activities, and provide incentives for graduates to enrol in the private sector.”
For some of Saudi’s young generation, however, it may already be too late. Usama Al Majed, 27, is an unemployed marketing graduate who is applying for jobs in the public sector.
He did have a job in a private publicity and advertising company – but quit after five months. He has now been out of work for more than two years.
And he said he is prepared to stay unemployed for two further years if it means he could avoid a similar role. "I used to work for extended hours at a private company and time would pass very slowly,” he said.
This article is available in French on Middle East Eye French edition.