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29 March 2024

Saudi launches 2nd phase of major job plan

Published
By Nadim Kawach

Saudi Arabia on Sunday launched the second phase of its most aggressive job nationalisation programme with a warning to failing private sector firms that they would be deprived from hiring expatriate workers.

Labour minister Adel Faqih said a three-month deadline would be given to companies which fail to adhere to the programme, dubbed Nitaqat (ranges) or they will face punishment including halting their expansion plans. At the same time, the government has finalised a set of incentives to be offered to the firms which make progress in recruiting Saudis, including visa facilities for hiring more foreign labour and easing movement of expatriate workers to those companies, Faqih told reporters in Riyadh on Sunday.

Saudi Arabia, the largest Arab economy and world’s top oil exporter, launched the job nationalisation programme on June 11 after the failure of previous initiatives to force the private sector to hire more Saudis.

The government said it would give four different classifications to firms operating in the Kingdom according to their compliance with regulations to recruit Saudis.

Compliant firms will be rated as “excellent and green” and those failing to abide by the rules will be classified as “red and yellow”.“Penalties against the red and yellow companies include deprivation of visas for them to import more foreign workers and stopping all facilities for them to transfer the sponsorship of an expatriate worker to them,” Faqih said.

“The ministry will also prevent them from opening any new file for the establishment of a branch or a new entity in any area in Saudi Arabia….these companies will be given three months from today (Sunday) to comply with Nitaqat and move to the excellent or green class or they will face punishment.”

In July, officials warned private sector establishments to abide by the new initiative to find jobs for the country’s citizens and tackle festering unemployment, saying those who fail to meet the deadline could be forced out of the market.

The ministry of labour also warned the more than 300,000 firms covered in plan that it would not tolerate any attempts to manoeuver or circumvent the rules by offering Saudis low-paid jobs in a bid to dissuade them from accepting work.“The ministry of labour is working on new rules as part of the programme to ensure no company will circumvent Nitaqat,” Faqih said on Sunday.

“We believe a three month deadline is enough for the red and yellow firms to correct their position……we urge them to seize this opportunity and make a move otherwise they will be subject to penalties,” he added.

Faqih said incentives to companies rated as “excellent and green” include giving them more visas for foreign labour in various occupations provided they maintain their rating.” Companies with excellent rating will be allowed to hire expatriate workers inside the Kingdom even if those workers have not completed the required two-year period with the first employer,” he said.

Analysts described Nitaqat as the most radical measure taken by the Saudi government to force its massive private sector to employ more Saudis following the failure of previous procedures and expansion in local unemployment. The programme comes amidst reports that unemployment in Saudi Arabia is widening because of the private sector’s preference of the cheaper expatriate labour and the fact that the population is growing faster than the economy.

Faqih put the official unemployment rate in Saudi Arabia, among the 20 largest global economies, at 10.5 per cent at the end of 2010, nearly 450,000. But he noted female joblessness largely exceeds that rate, standing at 26.6 per cent.

Unemployment among high school graduates is also as high as 40 per cent. He said nearly six million foreigners work in the Saudi private sector, accounting for around 90 per cent of the sector’s total work force.

“Within Nitaqat programme, there will be no room for cheating the system and all companies are advised to adhere to the rules,” Faqih warned.