An economic expert has criticized the mechanism being followed by the authorities to finance small and medium enterprises, saying deportation of expatriate workers alone will not solve the unemployment crisis in the country.
Abdulghani al-Ansari, a member and financial adviser of the board of directors of Madinah Chamber of Commerce and Industry, demanded the restructuring of financial bodies so that the objective for which they had been established was achieved.
Speaking to Al-Madinah newspaper, Al-Ansari said these financial bodies were primarily set up as a mechanism to boost small and medium enterprises, open new avenues of investment and curb unemployment.
He suggested the creation of a separate ministry for small and medium enterprises.
Al-Ansari rejected the theory that the huge volume of remittances by 8 million expatriates working in the Kingdom were partly responsible for the financial woes of Saudi nationals. He ruled out the possibility of creating jobs and checking inflation by limiting remittances by expatriate workers.
He said it was simple arithmetic that annual remittances by over 8 million expatriate workers reached over SR129 billion.
“This puts the average remittance by each expatriate worker at SR16,125 a year. This in turn means a Saudi national who would replace an expatriate worker would earn as little as SR1,343 a month,” Al-Ansari said.
He said young Saudis were not eager to fill jobs that give them such meager salaries.
Al-Ansari asked whether the Ministry of Finance and other concerned authorities wanted the Saudi youths to live on such small incomes.
He argued that Saudization could not be achieved simply through the deportation of expatriate workers. “The authorities should instead focus on encouraging and supporting young Saudis to invest in small enterprises and this will create jobs.”
Al-Ansari stressed the importance of formulating a clear strategy that works according to economic indicators in each of the Kingdom’s regions. “It will put an end to haphazard financing and a lack of support in rural areas to meet current and future needs.”
Al-Ansari said while the Saudi Savings and Credit Bank extended SR55 billion in social loans, support for small-scale projects was only SR3.5 billion. “And the majority of these projects failed and this proves that our financial bodies are in urgent need of restructuring,” he said.
Al-Ansari hoped that the Saudi Savings and Credit Bank would change its financing mechanism and allocate a bigger portion of its allocations to support small and medium projects and another portion for training business owners.
“This will help get rid of poverty and unemployment,” he said, adding that the middle class is “our safety valve.”
He said among the most important steps to protect this section is to support small and medium projects to transform them into a “productive class.”
This article was first published in the Saudi Gazette.SHOW MORE