Riyadh enlists private sector for job generation

02 August 2011

The proposed Work Programme will use private-sector expertise

Public-private partnership to ease unemployment has not been tested

Saudi Arabia has long faced a growing unemployment problem. Increasingly, this has taken the form of youth unemployment with graduates and non-graduates unable to secure jobs.

The government identified this problem and announced plans to tackle the issue many years ago. However, it is now accelerating its policies following small-scale protests in the country earlier this year.

Inspired by the Arab uprisings, Saudi nationals held protests in March and one of the central issues was youth unemployment. While a tight response by the security forces ensured that dissent remained limited, the message was clear – tackle unemployment.

Three months after Saudi Arabia’s Day of Rage, the government approached international employment specialists with the intention of piloting a job centres initiative. However, the broader plan aims to give job placements to individuals and track their progress. Private companies will be incentivised to offer appropriate and meaningful work that results in long-term employment.

But will it work? While employment programmes have been used for a long time around the world, a pseudo-PPP structure for employment has been less extensively tested. Also, Saudi Arabia’s unemployment problem has a very different demographic profile.

Many jobs in Saudi Arabia are taken by expatriates. A large portion of these are made up of unskilled and semi-skilled workers doing jobs that most Saudi nationals would not accept. Some have pointed to the high proportion of students graduating in non-vocational courses as the cause of unemployment.

These problems will provide a hurdle for the Work Programme. Similarly, any policies for Saudisation will face difficulty, as long as expectations and job opportunities are not matched. Riyadh is right to prioritise employment, but the scale of the problem is likely to increase over time if the programme is ineffective.

A MEED Subscription...

Subscribe or upgrade your current MEED.com package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.

Get Notifications