Aiming for definitive employment figures

11 October 2002

The government is seeking to arrive at a definitive figure for the actual rate of unemployment in the kingdom, Labour & Social Affairs Minister Ali al-Namlah announced on 3 October. The statement came amid a welter of conflicting estimates of the unemployment rate from official and unofficial sources.

'We don't know the exact rate of unemployment due to the absence of correct information on the number of job seekers and vacant positions,' he said, calling for the improvement of data. 'This could be achieved by linking all labour offices in the kingdom with the ministry's database.'

In September, Abdulrahman al-Tuwaijri, secretary-general of the Supreme Economic Council, told MEED that, based on new figures from the Central Department of Statistics (CDS), he estimated male unemployment among Saudi nationals at 8 per cent. In mid-September, Al-Namlah said there were about 3.2 million national jobseekers in the kingdom out of 9.7 million Saudis of working age. That figure would suggest unemployment is about 30 per cent for nationals of both sexes.

Saudi American Bank (Samba)at the start of the year estimated male unemployment to be about 15 per cent, based on employment and demographic figures from a variety of sources at different times. Jeddah-based The National Commercial Bank (NCB)points to the comparative lack of women in the Saudi workplace. Female participation in the labour force is about 3.5 per cent, compared with a global average of 41 per cent and 30 per cent in Egypt.

Difficulties in measuring unemployment are compounded by the disparities between such figures. Most estimates only look at unemployment among males. There is also a question of how many of those without jobs are actively seeking employment. In such circumstances, figures will always vary.

Job creation has been the driving motive behind much of the economic reform programme, with the government looking to the private sector to provide the bulk of new employment opportunities.

However, other strategies are being used. Saudisation is a top priority because expatriates accounted for 77 per cent of the workforce in 2000, according to the CDS. Alongside the carrot-and-stick approach of rewarding companies with strong Saudisation programmes and penalising those with few Saudi employees, the government has taken the further step of barring about 20 occupations to foreign nationals.

Perhaps the most important policy planks for tackling unemployment are those that deal with training and education. The government has created a training fund to boost Saudisation. The fund came into being early this year and pays half the salary for a Saudi during his first two years in the private sector. Education is, if anything, more important. Almost 50 per cent of Saudis graduate in literary and social science courses, with very few undertaking more vocational or technical courses that will improve their job prospects. The government has responded by promoting private colleges that focus more closely on technical studies.

However, all these problems are amplified by the poor perception of Saudi workers among both national and expatriate managers. Paradoxically, legislation that protects Saudi workers is a discouragement to hiring them because it is so difficult to terminate the employment of unreliable employees. A case brought against BAe Systemsof the UK over changes to employees' contracts was interpreted by many Western companies as a strong disincentive to increase their efforts in Saudisation, managers say.

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