Will Gulf follow Saudi Visa limit?
Nitaqat (limits), the new Saudi government program to be enforced in June, compels private sector firms in the Gulf Kingdom to recruit Saudis and provides incentives to companies which abide by the new rules. The program will limit the stay of foreign workers, mainly unskilled, to six years for certain categories of firms while it will also ban visa renewals for non-compliant companies.
More than 18 million expatriates live in the six-nation GCC, remitting home tens of billions of dollars every year, seen by regional economists as drainage of the Gulf countries’ wealth. Unskilled labour is estimated at around 3 million in Saudi Arabia and 10 million GCC-wide.
The Saudi program comes amidst reports that unemployment in the country is widening because of the private sector’s preference of the cheaper expatriate labour and the fact that the population is growing faster than the economy.
“We have nearly half a million unemployed Saudi in the country while around 8m expatriates live here…6m of them work in the private sector, transferring nearly SR100 billion every year,” Faqih said.
Government data released early this year showed Saudi Arabia is suffering from very high jobless rate among young men as more than 43 per cent of citizens aged between 20 and 24 years are unemployed. The rate at the end of 2009 was higher than in 2008 despite an ongoing campaign to find jobs for the fast-growing nationals.
“This comes at a time when one million labour visas for foreign workers were issued last year,” the report said. “The private sector continued a drive to import foreign labour although nearly 111,000 Saudis were looking for jobs,” it said.
Saudi Arabia, which controls over a fifth of the world’s recoverable oil deposits, is suffering more from unemployment than other Gulf hydrocarbon producers given its large population and the slowdown in its economy in some years.
Other analysts believe Faqih’s announcement of the six-year limit is intended to block the way for Saudi-based foreigners to demand political rights, including Saudi citizenship. But Suleiman believes such demands are not “in the pipeline” on the grounds that many expatriates have been residing in Saudi Arabia for more than 50 years and have not made such demands.
The government in the world’s dominant oil power has not yet published details of the programme but its labour minister said it includes “generous” incentives to compliant companies and punitive measures against non-abiding firms.
“Companies which abide by Nitaqat will be moved to the green zone, which will allow them to receive many benefits, including visas and others,” Faqih told businessmen this week. “It will also allow them to get skilled labour from firms in the red zone.”
