Question marks over immediate impact of Saudi female driving reforms

New report suggests narrowing of wage gap between Saudis and expats is needed

The decision to lift the ban on women driving in Saudi Arabia is unlikely to have any significant immediate impact, according to a new report; however the prediction is by no means clear cut.

News of the royal decree, lifting the ban, was broadly welcomed by both campaigners and political leaders when it was announced in September, with analysis by Bloomberg predicting the economy could grow by up to US$90bn by 2030, and reports that employment of women would be boosted.

But the latest ICAEW Economic Insight: Middle Eastreport, published every quarter by the Institute of Chartered Accountants in England and Wales, said that although the gradual easing in social restrictions should remove constraints to growth in Saudi Arabia, it was “cautious about the immediate impact of lifting the ban on women driving on female employment”.

“Plans to permit women to drive could save some households as much as $1,000 per month – particularly where women use a driver or taxis to get to their workplaces. The relaxation on women driving seems unlikely to have an immediate impact on female employment, though,” read the report.

In order to meet Saudi’s target to raise female labour participation to 30 per cent by 2030, the ICAEW said the country would need to narrow the gap in wage expectations between Saudi workers and expatriates. “Barring a big downward shift in wage expectations, a surge in public sector job creation, or a willingness on the part of firms to pay Saudi women more to do jobs currently filled by expatriates, it seems unlikely that the permission to drive will translate into many more working women,” according to the report.

But not everyone agrees. Ellen R Wald, consultant and scholar at the Arabia Foundation, told People Management that based on her own research and conversations with Saudis, she thought it was “very likely that lifting the ban on driving will significantly raise female employment in the Kingdom”.

“I think the impact on women's employment will be immediately seen and may even be amplified by concurrent changes that are encouraging women to enter the labour force in Saudi Arabia,” she said. “These include hiring women air traffic controllers and allowing women to obtain licenses to open women-only gyms in Saudi Arabia, which had previously been prohibited.”

Lifting the ban will also increase family efficiency, she said. “The ability to drive will provide flexibility and freedom to women who want to work but find it too difficult and inconvenient to rely on others for transportation,” said Wald. “I would also expect to see a rise in part-time employment of women, precisely because driving themselves will provide the kind of flexibility and convenience that many women seek in the workplace.”

Wald said the most immediate impact had been felt in the area of transport, with taxi companies, car services, insurance companies and driving schools already hiring women to provide services for female drivers. “The government is also hiring women to provide licensing services to other women,” she added.

More than 8,000 Saudi women have applied for support programmes designed to help them into employment in the country’s private sector, according to local media reports.

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