Huge fall in expat employment in Saudi Arabia

Up to 100,000 nationals enter labour market in final quarter of 2017 as expat levies begin to bite

The decline in the number of foreign workers in Saudi Arabia may have accelerated rapidly towards the end of 2017 as new levies on expats and an official emphasis on jobs for nationals began to take effect, according to new figures.

The General Authority for Statistics said 466,000 foreign workers left the country in the last quarter of 2017. This is a dramatic increase on the 161,000 expat roles that were estimated to have been lost in the previous quarter, though the two figures are not directly comparable.

The Authority said there were now 10.42m foreign workers in the country, a figure which covered both expats and the broader category of manual labourers. Over the same quarter, around 100,000 Saudis entered the labour market, keeping the unemployment rate steady and taking the number of Saudi women with full time roles above the 2m mark for the first time.

Saudi Arabia is in the middle of a huge and long-term shift to increase the number of nationals in private sector employment and rebalance its economy away from its dependence on oil.

Abdulaziz Al-Rasheed, the country’s deputy minister for economic affairs, this month acknowledged that “huge structural issues” in the labour market needed to be addressed if it was to meet its longer term economic goals.

“The challenge is to create jobs while there are more people coming onto the jobs market,” he told a conference in Riyadh. “Lots of low skilled, low wage labour translates into low productivity. The question is not less or more foreign labour, but less or more productive labour.”

Significantly, KSA last summer introduced a range of fees requiring expat workers to pay for their dependents, which the Minister acknowledged were a major factor in reducing reliance on overseas labour.

Economists remain divided on whether the reforms are sufficiently broad to change the fundamental nature of the labour market. There are still more than 1m Saudis without jobs, according to the latest figures, more than 80 per cent of them women. Around 76 per cent of the total workforce consists of foreign nationals.

But recruiter Hays this month issued an upbeat assessment of the outlook for jobs in the country, suggesting the e-commerce, property and entertainment sectors would all be significant growth areas over the coming months. Saudi Arabia recently opened its first new cinema in more than 35 years and has been staging a range of concerts and galas.

Hays said: "From our own first-hand experiences in the kingdom, we have certainly noticed an increase in activity within the local hiring market with added dynamism compared to previous years.” It added that the economy was at a “significant turning point” with “huge and unprecedented opportunities” approaching.

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