Saudi Arabia ‘must create 150,000 jobs per year’ to meet targets

Saudi Arabia must embark on a significantly more ambitious programme of job creation if it is to meet its targets for reducing unemployment over the next three years, according to an analysis by a Jeddah-based consultancy.

Strategic Gears said its study of General Authority for Statistics figures suggests fulfilling an official requirement for unemployment to reach 9 per cent by 2020 – it currently stands at 12.8 per cent – would mean finding work for 157,000 people each year.

This will require a significant uplift in the rate of job creation, it said. In the first three quarters of 2017, 128,000 expat workers left the country (76,000 of them in the construction industry alone) but only 18,000 nationals joined the labour market.

Like other Gulf economies, the Kingdom is diversifying its economy and reducing the size of its public sector. But its difficulties are particularly acute – Saudi Arabia has among the highest rates of youth unemployment in the Gulf, has been historically slow to integrate women into the workforce and certain regions such as Madinah, Baha and Jouf are pockets of particularly high unemployment.

The country last year reduced the duration of visas for private sector expat employees from two years to one year, and restricted a range of sectors – most recently car rental outlets – to Saudis, but experts said it needed to go further.

“I believe any policy regarding decreasing the unemployment rate should be developed in collaboration with the private sector,” said Hattan Saaty, Strategic Gears managing partner. “A successful model is when government entities work with the private sector, as the latter is able to come up with ideas that are more achievable on the ground. Otherwise, certain policies might fail because they’re incompatible or irrelevant.”

The scale of the problem is laid bare by a recent government bulletin which revealed there are 1.24m civilian public sector employees in the country, 1.17m of them Saudi nationals. The average monthly salary for Saudi civil servants was put at SAR10,894 (around $2,900).