The mandate for issuing visas and work permits for non-Saudi workers has been restricted to the Labour & Social Affairs Ministry and withdrawn from all other government departments. Authorities have also been given orders to employ 'whatever procedures and penalties' are needed to ban all foreigners from driving taxis. The Interior Ministry has been given six months from 1 November to implement the decision, which will affect an estimated 45,000 non-Saudis employed as taxi drivers in the kingdom.

Saudi Arabia has witnessed an unprecedented level of public debate on the question of unemployment following the first official pronouncements in September of the problems facing the labour market.

'These are draconian measures, but in the long-term they are for the good, as the government has a serious anomaly on its hands,' says one Western businessman based in Riyadh. 'The need to build up the infrastructure from the 1970s onwards meant having to bring in a large amount of foreign labour. Now most of the work has been done, foreign labour has become a thorn in the side.'

Earlier attempts to transform the low-income sectors of the economy have met with limited success. Legislation banning non-Saudis from operating in the Riyadh gold souk was withdrawn after businesses in the market went on strike, while government incentives to encourage its citizens to work as taxi drivers have also had little impact, with Saudis accounting for less than 10 per cent of the profession.