Understanding Saudi Arabia's Workforce Crisis and Aspirations
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Chapter 1: The Employment Landscape in Saudi Arabia
In Saudi Arabia, the government employs the majority of its citizens, yet many of them are absent from their jobs. This phenomenon raises significant concerns for the nation.
The Kingdom’s oil wealth has led to an extravagant lifestyle, creating a lasting image of opulence characterized by luxury cars, grand palaces, and lavish gatherings. However, a more pressing issue looms: the lack of genuine employment among Saudi citizens.
Despite the affluence, a staggering 70% of Saudi workers are employed in government positions as of 2016, with reports suggesting that many spend less than an hour a day working. Such a disclosure, though not particularly disputed, was surprising to hear publicly, given the long-standing avoidance of addressing the inefficiency of the workforce. Oil revenues have historically masked the need for innovation and a robust work ethic, with a significant number of migrant workers from countries such as Pakistan, India, and the Philippines filling in the gaps in the labor market.
Sharan Burrow, the General Secretary of the International Trade Union Confederation, highlighted the dire situation: “In late 2010, we conducted a risk assessment on basic labor rights, and the Gulf region was glaringly at the bottom for worker rights—essentially, they were slave states.”
Meanwhile, a slightly more educated class of immigrants from Egypt, Jordan, and Europe has been managing various businesses. The Kingdom's wealth is often perceived as a sign of divine favor, but it also reflects a cultural history that differs from agricultural or industrial societies. The traditional work ethic in the Arabian Peninsula has not favored the continuous 8-hour workday.
Section 1.1: Economic Dependence on Oil
Relying heavily on oil is fraught with challenges. The finite nature of this resource raises concerns about future sustainability. Moreover, fluctuations in oil prices can lead to economic instability. For instance, the price of oil plummeted from over $100 a barrel in 2014 to less than $30 by 2016, prompting significant budget deficits for the nation.
Despite relatively low extraction costs, the decline in oil revenue forced the government to rethink its economic strategies. In response, Vision 2030 was launched in 2016 to diversify the economy and reduce reliance on oil. Part of this initiative involved Saudization, aimed at replacing foreign workers with Saudi nationals.
Section 1.2: Saudization and Employment Challenges
Despite efforts to promote local employment, many Saudis remain reluctant to accept lower-status jobs, such as cleaning or construction, due to social stigmas. Most prefer professional roles, yet many lack the qualifications necessary for such positions. Although higher education is free, the quality is often subpar, focusing more on religious studies than practical skills like engineering or finance.
Family connections play a critical role in job acquisition, making it particularly challenging for those without qualifications or networks. However, some sectors have seen success with Saudization, particularly in retail and sales.
Chapter 2: The Future of Work in Saudi Arabia
The government is also promoting office jobs that require minimal hard skills and encouraging students to pursue critical fields abroad through scholarship programs. Currently, about 25% of engineers in Saudi Arabia are locals.
Despite the challenges, the Kingdom's economy is still heavily reliant on foreign labor. The urgency for diversification is evident, especially when comparing it to places like Dubai, where oil now constitutes less than 1% of the economy.
Nevertheless, one cannot overlook the ambitious plans of the Saudi government to reform its work culture. Transforming the employment landscape of a nation with over 35 million people is no small feat, yet the government is approaching this endeavor with determination, focusing on sectors that align more closely with Saudi cultural norms.