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The number of expatriates leaving Saudi Arabia is expected to continuously increase following recent changes to the countries economic focus.
As Saudi Arabia attempt to change their economy so that it is no longer entirely reliant on oil, it is starting to face some backlash in the form of people returning to their home countries. Thousands of expatriates are leaving every month and are not being replaced; leaving a huge workforce gap in many companies.
The Middle Eastern nation has been seeing a slowing economic growth over recent years with unemployment amongst Saudi nationals growing. Many predicted that this number would decrease as a result of competition for jobs becoming less due to declining expat numbers.
The once thriving economy is no longer offering the highly attractive quality of life that originally allured expats to the country. The harsh economic backdrop combined with increased fees for foreigners is creating a particularly uninviting image for expats considering the move to Saudi Arabia.
Whether these financial problems are a knock-on effect of declining expatriates residing in the country is open to speculation. But, it’s common knowledge that previously expat-reliant Saudi industries are now struggling.
The losses suffered by the Gulf nation in the first quarter of 2018 included the once strong construction industry, which is now lacking low-cost labourers.
Saudi Arabia had previously hoped that the job vacancies left by expatriates would be filled by Saudi nationals but, it is quickly becoming clear that locals are not filling the gaps. The plan to force expats out with high living costs in order to replace them with nationals is failing.
HSBC concluded in a recent research note that “Despite the strong policy push to create more private sector Saudi jobs and to reduce reliance on foreign labour, the latest labour market data indicate that these efforts have not been sufficient to meet the burgeoning Saudi demand for employment. Although structural change was always going to take time, there is little in the data to suggest that the impediments to more rapid ‘Saudisation’ have started to ease.”
While there are reports that Saudi Arabia has realised its mistakes and is planning on revising some of the recently adopted policies, it’s unlikely that this will do much to prevent the number of expats leaving.
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