Saudi bans 200,000 firms for abusing Saudisation

Saudi Arabia has suspended more than 200,000 private sector firms for their failure to employ the required number of nationals in its most aggressive job campaigns intended to tackle festering unemployment.

Most of the suspended companies are small establishments which are dominated by the cheaper expatriate work force, according to the Al Madina newspaper.

“The Ministry of Labour has suspended the work of more than 200,000 private sector establishments for their failure to abide by the Nitaqat job programme,” the Arabic language daily said, quoting a Labour ministry report.

Saudi Arabia, the world’s dominant oil exporter and largest Arab economy, launched ‘Nitaqat’ (ranges) in mid- 2011 in a bid to tackle national unemployment, which was estimated at around 11 per cent at the end of 2012.

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

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 after announcing the initiative that it 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 Saudisation rules.

Al Madina quoted the ministry’s report as showing nearly 17,000 companies have entered the red category since the programme was launched and that they could be suspended if they fail to meet the job nationalisation deadline.

It said they include around 16,000 small units, 800 medium establishments, 19 large companies and one “giant” firm. Around 19,000 have also been classified in the yellow category, including more than 16,000 small establishments.

“The companies in the red and yellow categories include nearly 600,000 workers but Saudis do not exceed eight per cent of them,” it said.

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