Recent statistics suggest that just over 10 million foreigners currently live and work in the Saudi kingdom. This represents roughly a third of the total population.
Clearly, expats are a critical part of the economy at present, helping to provide both skilled and unskilled labour as and when required. From c-suite execs through to lowly manual construction workers, in many ways these workers help to keep Saudi Arabia running smoothly.
But there’s a problem.
While a third of the population may consist of foreigners, they actually constitute 85% of the total working population. In other words only a tiny proportion of the working population is made up of native Saudis.
In the past this wasn’t necessarily seen as a bad thing; many of these workers are doing jobs which native Saudis themselves wouldn’t be too keen on. Sweating away on a building site in the oppressive Saudi Arabian sun, for example, is not many people’s idea of fun.
However alongside this considerable expat population an alternative situation is beginning to make itself felt; widespread unemployment among the native population. This is especially so among younger workers, who either lack the skills to land top-level positions, or are priced out of the market due to unskilled expat workers who are willing to work for lower wages.
These days Saudi Arabia serves as a temporary home for 1.3 million Indians, 900,000 Pakistanis and Egyptians and almost as many Yemeni. Alongside these primary nationalities also come Bangladeshi, Filipino and Sri Lankan workers, to name just a few.
In other words while 100,000 or so Westerners are employed as expats in Saudi Arabia, the vast majority of expat workers arrive from developing nations where work is hard to come by, or wages fail to meet basic needs.
It was this problem of massive numbers of expat workers, combined with rising unemployment of Saudi nationals that led to a recent three-day conference in Riyadh. Initial proposals suggested a sudden cut in the number of expats employed in Saudi Arabia, in order to facilitate vacancies for native workers.
Understandably this sent shockwaves through the Saudi expat population. Many hard-working individuals waited with baited breath to see whether their positions would become untenable. Fortunately, Deputy Labour Minister Ahmed bin Salih Al-Humaidan has said that such a precipitous decline in expat workers simply wasn’t realistic. Concerns were raised about how quickly native replacements could be found and trained, and how this transitional period could affect national productivity.
Instead, a number of alternative solutions have been proposed which, the government hopes, will lead to more gradual and progressive change in the Kingdom. Firstly, while expat worker numbers are to be reduced, this will be a gradual and controlled decline rather than the initially proposed “axing” of numerous expat jobs.
To assist local unemployed Saudis it has been suggested that the Kingdom move towards a “knowledge economy”, championing IT services on a worldwide level. This new initiative would then provide numerous employment opportunities for locals, without needing to expel too many expat workers, most of whom work in lower-skilled positions.
In addition, it has been proposed that a new body be established to assist small and medium-sized enterprises to gain a toehold on the Internet. By retailing online, many of these companies should be able to compete on a global scale, opening up further employment opportunities for Saudi Arabians.
It is important to state that at present there have been no formal plans put in place; at present the Saudi government remains in the discussion phase. However it seems that Saudi Arabia’s workforce and economy could be changing dramatically in the coming months and years as the country seeks to find the optimal balance between native and expat employees.