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15 April 2024

Saudis are least paid in GCC private sector

By Staff

Saudis employed by their private sector are paid less than nationals in neighbouring Gulf countries despite a Saudi government drive to make local companies give higher salaries to local employees, according to the World Bank.

In a study published in a Saudi newspaper the Washington-based World Bank said an aggressive job Saudization campaign announced by the world’s largest oil exporter recently has created corruption turmoil in the local labour market.

The study showed Saudi employees in the private sector are paid an average SR6,400 compared with SR15,200 for nationals and SR23,600 for European private sector employees in nearby Gulf oil producers.

Women are paid far less, with the average monthly wage for Saudi female workers in the private sector standing at SR3,900 compared to
SR8,700 for national women and SR15,000 for Europeans in other Gulf nations.

“This means that Saudis working in the private sector in the Gulf Kingdom are the last paid in the Gulf Cooperation Council (GCC),” the World Bank said in the study, partly published in the Saudi Arabic language daily Aleqtisadiah.

The study, conducted at the request of the Saudi labour ministry but has not been made public yet, criticized Saudi Arabia’s latest job nationalization drive known as “Nitaqat” (ranges), saying it had created corruption and anarchy in the job market.

Riyadh announced the launching of Nitaqat in mid 2011 in a bid to tackle national unemployment, which was estimated at around 11 per cent at the end of 2011.

The level is far higher among women and university graduates, ranging between 20 and 45 per cent, according to independent estimates.

Experts have 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 continued to widen because of the private sector’s preference of cheaper foreign labour and the fact that the population is growing faster than the economy.

Officials said the initiative could create more than 400,000 jobs for Saudis every year, adding that the private sector’s preference of expatriate labour has left more than one million Saudis jobless.

Under Nitaqat programme, private sector establishments were given four classifications—excellent and green with high Saudi labour percentage, and red and yellow, with low Saudi labour ratio.

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.

“Nitaqat has created a sort of unreal job Saudization and corruption as it forces companies to employ Saudis who have no qualifications without giving them any jobs….Nitaqat has also not taken into account the real job needs for Saudis,” the World Bank said, adding that Saudis get only around 20,000 jobs annually of the more than 200,000 jobs created by the country’s private sector.