Saudi Arabia expelling expats to normalize labor market?

While many Arabs are occupied with rebuilding their states, Saudis are actually doing the same, yet quietly or so I hope. The Saudi cabinet has lately made a series of decisions that indicate that. They are not revolutionary decisions, yet they have a revolutionary effect and can reshape the Saudi society if accurately implemented and not retracted.

The last of those decisions was a modification of the labor law to oblige workers to work only for their sponsors and oblige sponsors to make sure their workers do not work anywhere else. This immediately cancels hundreds of thousands or even millions of visas obtained by influential people and which led to flooding the market with a labor force that harmed the Saudi market, damaged the culture of work, and rendered hundreds of thousands of Saudis unemployed.

The Saudi business sector

As soon as the passport authority and the relevant bodies in the Ministry of Labor embarked on implementing the decision, rumors started spreading. Many illegal foreign workers did not show up at work or were not seen in the streets where they look for daily or monthly jobs. Several businesses stopped, workshops and schools were closed, and people started complaining. Many said they acknowledge the state’s right to apply the law, but asked that this be implemented gradually so that work would not grind to a halt while others demand that more visas be granted, therefore flooding the market with more laborers, to avoid resorting to illegal labor.

A third party calls for cancelling the sponsorship system altogether so that work would not be interrupted, only those are efficient would be hired, and costs would be unified. This solution might seem adequate for the Saudi business sector, with both small and big businesses, and is in line with most international standards to which Saudi is signatory and which prohibit the sponsorship system. This option will make cheap foreign labor available, but at the same time will make resorting to it addictive and will make the economy, industry, and services totally dependent on it. It will also leave hundreds of thousands of Saudis unemployed and will lead to the disintegration of the middle class and which is unable to face the invasion of foreign labor.

The problem is that we do not know what the state wants by this late awakening and this keen desire to apply an old system it had laid years ago then allowed to be violated through allowing the advent of unregulated labor, which includes those who run away from their sponsors and those who reside in the country illegally, to the market. We do not have any information beyond the above-mentioned decision whose main purpose is still unknown. Is it the Saudization of labor? Is it the enforcement of the law? Or is it the reduction of foreign labor for security and strategic considerations?

Public embarrassment?

The Ministry of Labor seemed apologetic and embarrassed in front of the public. The ministry denied its responsibility for reported campaigns the track down violators in markets, schools, factories, and workshops after it had been rumored that the decision would not implemented seriously and strictly. It was also said that like American and European stores do with owners of credit cards that exceed their limit and are unable to pay, those violators have their residence permits shredded. The passport authority pointed out the irrationality of shredding a document it has issued while the ministry denied carrying out such campaigns. For those who do not know, those cards carry the name of the foreigner worker, his nationality, and the name of his sponsor he should only work for.

In the past two decades, authorities were not strict in applying the law and responded to pressure from the business sector. This led to the booming of a visa selling business in which influential Saudis bring in hundreds of laborers to work freely in the market in return for a monthly fee they pay to the person who granted them entry. Consequently, a class of laborers who have “free visas” emerged and members of this class started competing with other laborers who comply with the sponsorship law. They usually work for Saudis who were unable to recruit foreign labor through the sponsorship system and therefore are ready to pay more. Those became the norm in the market.

Storm in a tea cup

The reluctance of relevant government bodies in the past raises questions about the seriousness of the new campaign and which many view as a storm in a tea cup. I guess the government needs to be convinced that it is doing the right thing regardless of how harsh it would seem for those who benefited from unregulated labor. This is a strategic decision that rebuilds the local Saudi economy and the Saudi society in the light of drastic changes in the Arab world. Saudi has to turn into a permanent “home” and not just a temporary “passageway.” Some Saudis are satisfied with whatever little they get from their country and are hoping for better in the afterlife while others see Saudi as only a source of money and choose another home to relax and retire, be that London or Paris if they are very wealthy or Dubai, Beirut or Cairo if they have a reasonable income.

There is more to that matter than just a residency system. It is a strategic decision that the cabinet had taken years ago and it stipulated that foreign labor should not exceed 20% of the population. Yet, it has not been implemented yet. The same applies to decisions like the one issued in 1975 and that stipulated limiting dependence on oil. Oil, however, still constitutes 92% of Saudi national income.

The 20% in the law means that foreign workers in Saudi should not be more than four million, yet the legal ones only are estimated at 7.5 million, that is 40% of the population and double what is stated in the law.

The hesitation of the government and the apologetic tone it has been adopting send the wrong message to Saudi people, who want low prices and cheap foreign labor together with good jobs for their children and this will never happen in the presence of this flood of cheap foreign labor in the market.

A senior Saudi official has to come out and speak to the people. It is a strategic and security issue that aims at restoring the Saudi market to its original state, bringing back social harmony, reviving the culture of work, putting an end to wasting natural resources and to unjustified expansion of cities, offering jobs available for Saudi men and women, and applying an equal opportunity policy.

This is the Saudi Arabia we had known back in 1975, a country that thrives on the efforts of its citizens, only more developed.

This article was first published in al-Hayat newspaper on April 6, 2013.
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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.