Recruitment Of Foreign Labor Down By Half

RIYADH/JEDDAH, 2 November 2004 — The number of foreigners recruited to work in the Kingdom has dropped by more than 50 percent last month compared to the same period last year, according to figures just released by the Ministry of Labor.

Regional labor offices last month issued 31,965 work visas for foreigners to come and work in the Kingdom compared to 65,096 visas issued in the same period last year, said Dr. Abdul Wahid Al-Humaid, deputy minister of labor for planning and development. This is a 51 percent drop over the same period and is the result of the ministry’s policy to curb recruitment of foreign workers as part of the Saudization drive.

Of the regional offices that registered the highest drop in work visas issued, Al-Qunfuda in southern Saudi Arabia came first with a drop of 89 percent followed by Jeddah, 80 percent, and Makkah, 73 percent. Riyadh labor office reported a 34 percent drop.

The production sector topped the list of work visas issued by the labor office with 14,512 visas issued compared to 36,353 issued the same month last year. Other professions registered varying figures with visas for salesmen dropping from 1,402 last year to 117 this year, clerical works from 253 last year to just two this year. Visas for bus drivers registered the highest drop profession-wise, from 5,906 last year to 72 this year.

In August, Labor Minister Dr. Ghazi Al-Gosaibi, told the Shoura Council about government plans to cut the number of foreign workers by not less than 100,000 every year. The Ministry adopted a three-pronged strategy to solve the country’s growing unemployment problem — by rationalizing recruitment, training Saudis and increasing the cost of foreign manpower.

Dr. Al-Humaid attributed the decline in the number work visas issued last month to the ministry’s close monitoring of the implementation of the policy designed to effect a gradual phase-out of foreign workers and replace them with Saudis.

Under the new regulations the number of expatriate workers an employer can hire has been restricted. Labor and recruitment offices were told to consider only one application from one businessman at a time. Applications would be scrutinized, bearing in mind the necessity to avoid any exaggeration of the need for foreign workers. Employers cannot file another request for expatriate workers for another two months to allow time for newly arrived workers to be properly registered.

Businessmen and company owners have criticized the new curbs on foreign manpower recruitment saying such rules would lead to the closure of many businesses and flight of capital. They urged the government to simplify measures for the recruitment of manpower in order to encourage foreign and domestic investment and boost the economy while recognizing that the regulations were necessary to make sure that companies import only genuine manpower needs.

Asked about the impact of denial of visas to recruit foreign workers, many national and joint-venture companies in Riyadh complained against the government move. Some companies said that “the manpower shortage caused by the refusal of visas has hampered our plans to start work on many government projects in time and hand over the completed projects on agreed terms and conditions”.

These companies said “a unilateral decision will affect business and productivity especially at a time when there is shortage of manpower to execute real estate projects worth billions of dollars”. The move will also discourage foreign investors willing to do business in the Kingdom because they largely bank on cheap manpower primarily from Asian countries.

According to Al-Gosaibi, there are 8.8 million expatriates in the Kingdom, a figure equal to nearly 50 percent of the indigenous population. The government said it is determined to cut this figure to 20 percent over the next eight years.

A ban has already been slapped on the recruitment of foreign workers by small businesses having fewer than 10 employees. Small and medium enterprises are targeted because they were the ones who recruited foreigners greatly in recent years.

Since the mid-1990s, the Kingdom has implemented a series of measures to boost employment opportunities for its nationals, particularly in the private sector. More than 640,000 Saudis have so far been employed in the sector as a result of the Saudization drive.

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