The Saudi labor ‘shop’ should close, undergo reforms

Jamal Khashoggi
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I have many friends in the Saudi Arabian General Investment Authority (SAGIA) who will not like the topic of this article, which came to mind a few days ago when I attended the Global Competitiveness Forum (GCF). This annual event is organized by SAGIA to promote local competitiveness and attract foreign investments to the kingdom by inviting heads of major companies, economists and foreign journalists to the country and meet with Saudi counterparts.

As a Saudi national, I felt proud seeing the kingdom’s multilingual youth - who graduated from the best universities in the world, some holding leadership positions in government or the private sector - talking enthusiastically with each other and with foreign guests about their visions of a more competitive Saudi Arabia.

The private sector is addicted to foreign labor, and will provide multiple reasons to justify its addiction. The time has come to challenge this

Jamal Khashoggi

I listened to the new Education Minister Ahmed al-Issa talk of his plan to transform education and enable it to produce competitive youth by launching “independent” public schools. He said children in private schools do not exceed 15 percent of the kingdom’s students, while 85 percent attend public schools. This surprised me as I used to think the rate of those in private schooling was higher, since that is the preference of all of my relatives and acquaintances.

I discovered then that those of us at the GCF are a small minority in a much bigger community that was totally absent, despite being the target of the forum. This community is supposed to be the working class to whom ministers keep promising hundreds of thousands of jobs year after year. Although the organizers want the whole Saudi economy to be more competitive, most citizens who graduate or fall out of public schools and universities are unable to compete.


If we want King Abdullah Economic City (KAEC) to be more appealing than Dubai or the free-trade zone in Ethiopia, for example, we must make our environment more competitive for business investments in terms of taxes, laws, ease of movement and export, facilitating the recruitment of foreign workers, and providing them with adequate visas. In this regard, Dubai is not better than us, but Ethiopia might be because it can provide local labor.

Is it normal to keep bringing in more foreign investments and factories with their own workers who are not only getting more expensive, but also becoming more dominant – even in leadership positions – as revealed by last week’s report by the General Organization of Social Insurance?

We have many reforms to implement before we open our doors to additional investments and foreign workers, otherwise the kingdom’s economy will remain in a closed cycle that will prevent Saudi nationals from entering the labor market and evolving in it. Such a cycle cannot be broken unless we close shop for several years and reorganize our internal affairs by developing a national project for the liberation of the market from foreign workers.

We could reopen the market to foreign labor in five or 10 years, with a new concept based on the ability of the competitive individual to create a competitive economy. This would surely be more sustainable than our current economic situation, which is addicted to foreign workers.

This idea contradicts everything sought by my friends in SAGIA, an organization that has not succeeded yet in fulfilling the million-job promise made by its directors and the ministers who have attended their events. SAGIA’s former governor, Amr al-Dabbagh, made this promise before being held accountable for it by Saudi columnists until the day he left the organization.

This promise was reiterated by Aramco Chairman Khalid al-Falih during the GCF, when he said half a million jobs would soon be created in the eastern maritime service sector. He did not say whether they are intended for Saudis or foreigners, but no official would take pride in providing jobs for foreigners.


Commerce and Industry Minister Toufic al-Rabiah has started tracking commercial cover-up crimes by closing companies, punishing those involved, and naming and shaming them. Labor Minister Mufarrej al-Haqbani has spoken of a plan to impose “Saudization” in the retail sector.

These represent efforts to tackle the main problem - the presence of 10 million foreign workers in the kingdom, which deprives Saudi nationals of their ability to compete, as well as their ability to afford housing. Promises mean nothing without a real plan to tackle the problem.

The private sector is addicted to foreign labor, and will provide multiple reasons to justify its addiction. The time has come to challenge this. The competitiveness of Saudi nationals is the only guarantee for our country and a competitive economy. Until then, let us close shop and adopt radical reforms.

This article was first published in al-Hayat on Jan. 30, 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: @JKhashoggi

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