Sept. 1 saw the end of the deadline to nationalize jobs in shops for selling and maintaining mobile phones and accessories in Saudi Arabia. I expected Labor Minister Mufrej al-Haqbani to celebrate this occasion and great success and accompany the press on a tour in one of the many crowded mobile-phone outlets, where he would hold a press conference among the hundreds of Saudi youths who are present in the market.
I was hoping he would hold this conference in one of the shops that were shut down because it violated Saudization rules. This symbolism would have reflected the state’s intent to not back down from this national mission. I was expecting him to announce that the next battle would be in the car-rental sector, as some media reported based on leaked information from the Labor Ministry.
We hope this work expands and includes car exhibitions and shops that sell spare parts. All these sectors suit young Saudi men who love commerce, cars and mobile phones, but end up doing nothing due to frustration caused by those who say Saudization of the mobile-phone sector will fail just like it did in the vegetable market, or by those who frown on the idea of working in either of those sectors.
However, the minister did not do any of this. We hope he does so after the Hajj pilgrimage, and informs the Saudi public of statistics and a detailed report of what was achieved and of the gaps exposed by the assigned ministerial teams, such as some foreigners’ attempts to get through the decision by forged Saudization of their businesses.
Some wholesale distributors have refused to provide products to young men who have recently worked in the mobile-phone industry. The teams also exposed price increases. Some malls’ owners have been harmed as some of their shops are no longer rented due to their closure. Other problems are expected due to this process of rectifying a wrong situation that lasted for years, especially since the new situation is still fragile.
The Saudization of the mobile-phone market sums up a huge crisis in the market and business sector in the kingdom. Global economic media outlets were interested in the strikes by foreign laborers who work in the troubled construction sector, and delayed payments to contractors. However, the issue is much deeper than that.
Saudi Arabia is not a small economy that indefinitely depends on foreign labor. Its population has reached 20 million, mostly youths who not only want jobs, but also opportunitiesJamal Khashoggi
Saudi Arabia is not a small economy that indefinitely depends on foreign labor. Its population has reached 20 million, mostly youths who not only want jobs, but also opportunities to progress and enjoy a good life. However, there are more than 12 million foreigners around them who know everything and even own the labor market under Saudi names. These foreigners have prevented them from developing and gaining experience.
This is why some viewed the government’s announcement of a project to Saudize the small mobile-phone market as a test case toward including all business and commerce sectors. This is right and must be done to build a productive economy that can achieve the state’s goal of ending reliance on oil, as called for by Vision 2030. This must also be done to achieve stability by comforting people and giving them a decent life. The key to that is job-creation.
The complication of the issue, especially since prominent Saudi property owners and capitalists have been used to foreign labor for some 40 years now, does not mean abandoning or postponing this goal. Its failure would be a major threat to national stability. There were complications when executing the plan to nationalize the simple mobile-phone market, so how will it be in other sectors? Victory is the only option in this battle.
I think the market will correct itself without intervention from the labor and commerce ministries. Following a tour of one of the telecommunications markets in Jeddah, and after conversing with many of those who work in the sector, I realized that the market needs something like a “sheikh of the souq” (sheikh of the market), an old job post that was prestigious when the market was purely Saudi.
This job still exists in some professions, such as those related to gold and jewelry. In our era, the sheikh of the souq could be a specialist from the Labor Ministry. The expert must be a researcher, as his job is to monitor market transformations and problems that may arise, and to note the characteristics of certain trades.
He can resolve problems by mediating between traders and employees in different government institutions. His reports and notes must be analyzed with the help of a relevant team for the benefit of other fields that the authorities want to nationalize.
I toured the telecommunications market two weeks ago. The market was crowded, and the number of closed shops small. However, many shelves were empty. A young Saudi man who has been in the market for more than 10 years said this was because wholesale traders, many of whom are foreigners, are not supplying new shop owners with products.
He added that this problem will resolve itself when traders and owners get to know each other more, or when foreigners are no longer in the wholesales industry. He said these wholesale traders will eventually have to sell their merchandise in the market because they cannot store it for long, as new models of mobile phones are continuously produced.
Another young man, Majed al-Majreshi - an expert in buying and selling used mobile phones - told me there is a market in which half the shops are closed. I visited this market and noticed many foreigners who were clearly not customers. They stood between cars and in front of shops. I went back to Majreshi, who owns a shop and manages it himself (I think this is what the Labor Ministry seeks to achieve, and what it must achieve).
He said those people lingering around seek to get hold of those who want to sell their old mobile phones. They buy them, then go to a shop that sells used mobile phones. He said these people were in the market since before the Saudization process, but their number has decreased since. These people violate labor and residency laws, and deporting them is the task of the Interior Ministry.
Maintenance is still a problem. A shop owner, who asked me not to reveal his name, acknowledged this. Shops give mobile phones that need maintenance to foreign laborers who work from home. However, Saudi youths have entered this field.
Mohammed Felemban goes himself to pick up mobile phones that need fixing from homes and offices, and returns them when he is done. He said this problem regarding maintenance is worrisome. He is an expert in it, but he used to depend on foreign labor to get the job done.
He said it is difficult for Saudis to replace foreign labor, and a Saudi who is skilled in maintenance prefers to work by himself as the gains are good, around 50 - 70 percent of the parts’ price. One can thus make 8,000 - 20,000 Saudi riyals ($2,133 - $5,333) per month. This is better than having a job.
Felemban also complains of the lack of electronics and telecommunications specialties in universities and vocational training institutes, as they are only available at the College of Telecommunications and Electronics in Jeddah.
It is common among many Saudi writers to criticize the state’s attempts to nationalize entry and mid-level positions, and insist on nationalizing senior positions. Some justify this by saying senior positions with a high income are in the industrial export sector. However, I sense a condescending attitude here - he who wants to get to the top of the ladder must start from the bottom.
Felemban’s and others’ confessions of a lack of Saudis in the field of maintenance is more proof of the importance of climbing the ladder from the bottom. How can the kingdom establish a manufacturing industry for products that are worthy of export and produced by Saudis - to help end reliance on oil - if Saudis have not yet succeeded in the simpler field of maintenance?
The Saudi capitalist will not give in to the government’s measures. He does not care about the state’s goal to nationalize jobs, or about that strategic plan to establish manufacturing industries that export products. He cares about making profit, cutting costs and satisfying customers. This is why he will be creative in coming up with solutions that serve him, not the aim of nationalizing jobs.
For example, he would gather broken mobile phones from customers, ship them to a maintenance center in a Gulf country that is not concerned about nationalizing jobs, get them fixed, then have them shipped back to Saudi Arabia. Confronting this is the task of the labor and commerce ministries. The Gulf Cooperation Council (GCC) must help by convincing our neighbors of the importance of nationalizing jobs, or at least of filling gaps.
I left the market feeling optimistic yet cautious, as victory is not complete yet. There are still a few expatriates doing business in the names of Saudis, and foreigners working through forged Saudization, as many of those who work in the market acknowledged. Saudis who work in the market do not want the authorities to back down, as they want to guarantee the continuity of their businesses.
Perhaps the presence of a “sheikh of the souq” and inspection tours will reassure them. Transferring the battle immediately to other sectors will let Saudi youths know that the government will not back down, and will silence those who seek to frustrate and burden us with their statements on how previous Saudization attempts failed.
On Khaled bin al-Walid street, near the telecommunications market I visited, a number of companies that sell medical equipment have been open there for around two decades now. When I passed by it following my tour of the telecommunications market, I saw dozens of shops that sell medical equipment. This is clearly another case of tassatur - expatriates doing business in the names of Saudis.
This requires another Saudization project. This sector, like the telecommunication and car sectors, is very suitable for Saudis and is a good source of income. It can be a basis to look forward to what is next.
This article was first published in al-Hayat on Sept. 17, 2016.
Jamal Khashoggi is a Saudi journalist, columnist, author, and general manager of the upcoming Al Arab News Channel. He previously served as a media aide to Prince Turki al Faisal while he was Saudi Arabia's ambassador to the United States. Khashoggi has written for various daily and weekly Arab newspapers, including Asharq al-Awsat, al-Majalla and al-Hayat, and was editor-in-chief of the Saudi-based al-Watan. He was a foreign correspondent in Afghanistan, Algeria, Kuwait, Sudan, and other Middle Eastern countries. He is also a political commentator for Saudi-based and international news channels. Twitter: @JKhashoggiSHOW MORE