An aggressive drive launched by Saudi Arabia in mid 2011 to create jobs for its fast-growing citizens has so far yielded nearly 300,000 employment opportunities, newspapers reported on Sunday.
Thousands of private sector firms have already responded to the drive and recruited Saudis either by creating new jobs or replacing their expatriate workers to win government incentives and avert penalties.
The drive, dubbed Nita at (ranges) was enforced in June 2011 and it involved many incentives for companies with higher Saudi labour percentage and penalties for those who fail to abide by the programme.
“The response to Nitaqat has been very strong and encouraging…it has so far produced more than 300,000 jobs for Saudis in the private sector,” said Ibrahim Al Muakil, director general of the state Human Resources Fund.
“The private sector is responding positively to this initiative and many companies in the Kingdom have announced new job outlets for citizens.”
After announcing Nitaqat, the Saudi ministry of labour said it is expected to create more than 400,000 jobs for Saudis every year, adding that the private sector ’s preference of less expensive expatriate labour has left more than one million Saudis jobless by the end of 2010.
Besides creating a persistent unemployment problem among Saudis, the private sector’s heavy reliance on foreign workers has put pressure on the country’s balance of payments given the massive funds transferred by foreigners to their homes, estimated at SR98 billion ($26 billion) in 2010.
Under Nitaqat, which was implemented on June 11, private sector establishments were given four classifications—“excellent and green” with high Saudi labour ratio, and “red and yellow“, with low Saudi percentage.
Foreign workers in the first two categories can stay as long as they want while the stay of expatriate workers in the two negative categories will be limited to six years in case the company fails to adjust to Saudization rules.
The labour ministry also warned companies that it would not tolerate any attempts to maneuver or circumvent the rules by offering Saudis low-paid jobs in a bid to dissuade them from accepting work.
Incentives planned for the successful firms include visa facilities, transfer of sponsorship, amendment of job titles and fewer procedures for new visas and work licences. Penalties for failing companies will involve deprivation of new work visas, limited stay for existing workers and less government services.
According to Saudi minister of labour Adel Faqih, nearly 20 per cent of the private sector firms could find themselves in the red zone unless they take what he described as drastic measures to get in line within three months.
Analysts described Nitaqat as the most radical measure taken by Saudi Arabia, the largest Arab economy, to force its private sector to employ more Saudis following the failure of previous procedures and expansion in local unemployment, estimated at over 10 per cent at the end of 2010.
Sitting atop more than 40 per cent of the world’s extractable oil deposits, Saudi Arabia is suffering from a high unemployment rate among young men as more than 43 per cent of citizens aged between 20 and 24 years are unemployed, according to government figures.
The figures by the government statistics and information centre showed nearly 43.2 per cent of the Saudi males and females aged 20-24 years were unemployed at the end of 2010, nearly 20 per cent above the 2008 rate.
The report, published in Saudi newspapers, showed more than 500,000 Saudi nationals of all ages were jobless at the start of 2011.