Saudis need jobs but they love cheap labor
Jamal Khashoggi
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Updated:
I admit I was biased towards Saudi Labor Minister Adel Mohammed Fakeih when I interviewed him on Rotana Khalijia last week. Many wanted me to support the grass-roots campaign against him, and ask him the reasons behind the rise of the cost of cheap labor, which Saudis have gotten used to. Why should Saudis want to work in jobs they deem as “inferior” when God almighty has provided human beings who come from all around the world to serve them in return for “tiny amounts?”
But of course I did not ask this. I even outbid the minister when I told him: If you really want to raise the cost of foreign workers, imposing 200 riyals per month on each worker will not affect the employment market; instead you should increase these fees, so at least five million foreign workers will get out of the kingdom within five years.
What is it about these “fees” that caused uproar in Saudi Arabia, and has made the labor minister, the least popular and most controversial of them all? He did not find anyone to support him except a few intellectual elites, a few economists who are aware of the importance of recruiting citizens in the economy, and a few businessmen who realized the danger of the Saudi economy's addiction to cheap foreign labor.
It is just a 200 riyal ($53) fee imposed as a monthly charge on each non-Saudi worker, and paid by the employer, who will be exempt from the payment if he hires Saudi workers instead of foreigners.
The fees are expected to reach about 10 billion riyals and will be used to fund human resources, training programs and employment of Saudis who are searching for job opportunities. So it may be a good deal, and a useful alliance between the state and the businessmen. But not really. ever since Fakeih has announced his project, he has been sharply criticized by the business sector, and accused that he only seeks to raise money in order to finance his various programs that “will destroy the Saudi industry and service sectors and will raise the cost of the services on the citizen” as have stated many Saudi capitalists or columnists who support them. Moreover, businessmen have unprecedentedly joined the conservative Saudi mainstream that declared its objection and hatred toward the minister. Some religious figures have threatened the labor minister to pray that he gets cancer like his predecessor Ghazi al-Gosaibi, who died of the disease.
There are many reasons behind the conservative current’s “hatred” towards Adel Fakeih even if at some point, it is overlapping with some business reasons; they are obsessed with fighting decisions that allow women to work, and they want to limit the work of women in women’s necessities stores. The law has included so far women's lingerie stores so it would be ratified. Nevertheless, the religious current knows well that “women’s necessities” can include dozens of other stores. This is a strategic alliance with the retail dealers who prefer to hire a foreign “male” who arranges the ladies’ lingerie, in obvious opposition with the conservative nature of Saudi society: for Saudi merchant, the foreign male sales person is less costly than Saudi woman who needs to be employed, and work with a double salary and who would be working for limited hours. The Saudi female worker will need an insurance coverage in accordance with the regulations of the Ministry of Labor: all these requirements are additional costs that businessmen prefer to avoid! Economics and accounting rules to increase the profits and minimize losses, is the engine for those businessmen, and not the national morals and the supreme national interest that the Minister of Labor is working on. As for the religious current, the important thing is that this foreign “male” will guarantee that women will not work in public.
The religious tide does not care about Adel Fakeih’s numbers, such as the fact that 85 percent of those registered in the “incentive” program that registers the unemployed are two million Saudi women. This is a clear message to the religious current stating that their festering speech that refuses the women's work idea and discouraging women has failed. There are 1.7 million Saudi females who wish to work: many of them prefer to work as teachers, while others want to work under the terms of the clergy, i.e. without interacting with the opposite sex. The economy is directing the people and not the heartless preaching. Half of the women are willing to work in the retail sector for example, and that is strongly opposed by religious men: the need for job and income are what motivate women and put pressure on the State that is represented by the Ministry of Labor. These women and 360 thousand of young Saudis, where most of them did not finish the secondary education, constitute 10 percent of the Saudi population.
The conservative current always finds a solution, but it does not agree with the convictions of those who studied “Economics 101”, not to mention the Saudi Ministry of Finance, because they are proposing a salary to every housewife, sitting in the “house”! Yes, these are in fact their ideas that are based on one theory: “God has awarded the state with money resources, and the price of the oil barrel is above $100!”.
It is important to point out that the insistence of the religious- capitalist coalition that these decisions are the “minister’s decisions” and not the government’s, is an attempt to push the minister and his ministry into the sick conflict, while the truth is that all his decisions are implementing the decisions of the government that is headed by the king of the country. Moreover, there is an official policy that has been approved for more than 10 years, stipulating the need to reduce the number of non-Saudis to reach half the number it is now, in a way that they would not exceed 20 percent of the total number of Saudis. So the maximum number that the newcomers can reach is only 4 million, while the official number of foreigners residing in the Kingdom is actually 7.2 million and if we add their families and the illegal residents we will then reach ten million foreigners, which means that every two Saudis have one foreign worker who helps them. This is certainly an abnormal situation, but the problem is that many Saudis believe that it is a normal situation!
There are 500 thousand Saudis, among which one third (110 thousand) own companies, but yet, they do not employ any workers: no Saudis and no foreigners: they might be illegally sponsoring one thousand foreigners, and this is why the Ministry of Labor has enlisted them in the “suspected illegal Visa trafficking” list, which is of course a clear violation of the regulations of the country. Two thirds of them (341 thousand) are engaged in crime or “cover-up” violation: they have commercial establishments that do not employ any Saudi at all.
“Covering up” is when a foreigners works freely, using the name of a Saudi citizen in exchange for a fixed sum. The stores that are scattered all around the Kingdom, including smithy, aluminum, and carpentry workshops in addition to groceries and shops selling plumbing, electrical and grooming tools, and a long list of endless shops, put an end to the chances of the young Saudi in the establishment of a similar business and benefit from it.
The majority that protested outside the offices of the Ministry of Labor, are mainly from this affected category, this is why they have become accustomed to the status quo for 30 years, and they are comfortable in their homes, and yet get foreign cheap workers for a little sum of money, while the foreigner works freely for their interests, dominates the market, imposes the prices and the appropriate hours of work. This year they will transfer around 130 billion riyals outside the kingdom, and they will expel the young Saudis from the market that no longer suits them. The Minister of Labor is raising the cost with not more than two percent of their real cost, and the beneficiary businessmen are objecting. What is strange is that many of the affected Saudi youth who are seeking to be employed are protesting with them... Why is that?
(Jamal Khashoggi is a Saudi columnist for Al-Hayat newspaper, where this article was published on Dec. 29, 2012)
But of course I did not ask this. I even outbid the minister when I told him: If you really want to raise the cost of foreign workers, imposing 200 riyals per month on each worker will not affect the employment market; instead you should increase these fees, so at least five million foreign workers will get out of the kingdom within five years.
What is it about these “fees” that caused uproar in Saudi Arabia, and has made the labor minister, the least popular and most controversial of them all? He did not find anyone to support him except a few intellectual elites, a few economists who are aware of the importance of recruiting citizens in the economy, and a few businessmen who realized the danger of the Saudi economy's addiction to cheap foreign labor.
It is just a 200 riyal ($53) fee imposed as a monthly charge on each non-Saudi worker, and paid by the employer, who will be exempt from the payment if he hires Saudi workers instead of foreigners.
The fees are expected to reach about 10 billion riyals and will be used to fund human resources, training programs and employment of Saudis who are searching for job opportunities. So it may be a good deal, and a useful alliance between the state and the businessmen. But not really. ever since Fakeih has announced his project, he has been sharply criticized by the business sector, and accused that he only seeks to raise money in order to finance his various programs that “will destroy the Saudi industry and service sectors and will raise the cost of the services on the citizen” as have stated many Saudi capitalists or columnists who support them. Moreover, businessmen have unprecedentedly joined the conservative Saudi mainstream that declared its objection and hatred toward the minister. Some religious figures have threatened the labor minister to pray that he gets cancer like his predecessor Ghazi al-Gosaibi, who died of the disease.
There are many reasons behind the conservative current’s “hatred” towards Adel Fakeih even if at some point, it is overlapping with some business reasons; they are obsessed with fighting decisions that allow women to work, and they want to limit the work of women in women’s necessities stores. The law has included so far women's lingerie stores so it would be ratified. Nevertheless, the religious current knows well that “women’s necessities” can include dozens of other stores. This is a strategic alliance with the retail dealers who prefer to hire a foreign “male” who arranges the ladies’ lingerie, in obvious opposition with the conservative nature of Saudi society: for Saudi merchant, the foreign male sales person is less costly than Saudi woman who needs to be employed, and work with a double salary and who would be working for limited hours. The Saudi female worker will need an insurance coverage in accordance with the regulations of the Ministry of Labor: all these requirements are additional costs that businessmen prefer to avoid! Economics and accounting rules to increase the profits and minimize losses, is the engine for those businessmen, and not the national morals and the supreme national interest that the Minister of Labor is working on. As for the religious current, the important thing is that this foreign “male” will guarantee that women will not work in public.
The religious tide does not care about Adel Fakeih’s numbers, such as the fact that 85 percent of those registered in the “incentive” program that registers the unemployed are two million Saudi women. This is a clear message to the religious current stating that their festering speech that refuses the women's work idea and discouraging women has failed. There are 1.7 million Saudi females who wish to work: many of them prefer to work as teachers, while others want to work under the terms of the clergy, i.e. without interacting with the opposite sex. The economy is directing the people and not the heartless preaching. Half of the women are willing to work in the retail sector for example, and that is strongly opposed by religious men: the need for job and income are what motivate women and put pressure on the State that is represented by the Ministry of Labor. These women and 360 thousand of young Saudis, where most of them did not finish the secondary education, constitute 10 percent of the Saudi population.
The conservative current always finds a solution, but it does not agree with the convictions of those who studied “Economics 101”, not to mention the Saudi Ministry of Finance, because they are proposing a salary to every housewife, sitting in the “house”! Yes, these are in fact their ideas that are based on one theory: “God has awarded the state with money resources, and the price of the oil barrel is above $100!”.
It is important to point out that the insistence of the religious- capitalist coalition that these decisions are the “minister’s decisions” and not the government’s, is an attempt to push the minister and his ministry into the sick conflict, while the truth is that all his decisions are implementing the decisions of the government that is headed by the king of the country. Moreover, there is an official policy that has been approved for more than 10 years, stipulating the need to reduce the number of non-Saudis to reach half the number it is now, in a way that they would not exceed 20 percent of the total number of Saudis. So the maximum number that the newcomers can reach is only 4 million, while the official number of foreigners residing in the Kingdom is actually 7.2 million and if we add their families and the illegal residents we will then reach ten million foreigners, which means that every two Saudis have one foreign worker who helps them. This is certainly an abnormal situation, but the problem is that many Saudis believe that it is a normal situation!
There are 500 thousand Saudis, among which one third (110 thousand) own companies, but yet, they do not employ any workers: no Saudis and no foreigners: they might be illegally sponsoring one thousand foreigners, and this is why the Ministry of Labor has enlisted them in the “suspected illegal Visa trafficking” list, which is of course a clear violation of the regulations of the country. Two thirds of them (341 thousand) are engaged in crime or “cover-up” violation: they have commercial establishments that do not employ any Saudi at all.
“Covering up” is when a foreigners works freely, using the name of a Saudi citizen in exchange for a fixed sum. The stores that are scattered all around the Kingdom, including smithy, aluminum, and carpentry workshops in addition to groceries and shops selling plumbing, electrical and grooming tools, and a long list of endless shops, put an end to the chances of the young Saudi in the establishment of a similar business and benefit from it.
The majority that protested outside the offices of the Ministry of Labor, are mainly from this affected category, this is why they have become accustomed to the status quo for 30 years, and they are comfortable in their homes, and yet get foreign cheap workers for a little sum of money, while the foreigner works freely for their interests, dominates the market, imposes the prices and the appropriate hours of work. This year they will transfer around 130 billion riyals outside the kingdom, and they will expel the young Saudis from the market that no longer suits them. The Minister of Labor is raising the cost with not more than two percent of their real cost, and the beneficiary businessmen are objecting. What is strange is that many of the affected Saudi youth who are seeking to be employed are protesting with them... Why is that?
(Jamal Khashoggi is a Saudi columnist for Al-Hayat newspaper, where this article was published on Dec. 29, 2012)
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