May 25 2011
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Businesses skeptical over new Saudization plan
Al-Hayat Arabic daily reported that Adel Fakieh told businesspeople at a meeting in Riyadh Monday that the recently announced incentive program for the Saudization of jobs in private companies would not see a reduction in the number of visas issued for foreign workers.
"The companies and organizations that achieve the high rating in the program for employing Saudi nationals will be permitted visas without restrictions," Minister Fakieh said.
At the announcement of the program in April the minister said it could be "summed up" as the assignment of "red, green and yellow lights" for companies in accordance with their levels of compliance. Red lights would be assigned, he said, to companies that fail to cooperate and green to firms that display full commitment.
"Companies in the Kingdom will be divided into 40 trading sectors," the minister said. "Each one will be given a set Saudization rate that must be complied with, and if they fail to do so they will not be granted services and facilities or license and visa renewals, or be permitted to transfer their foreign workers to competitors and other procedures. That will make things more difficult for those who have been given red or yellow lights."
Green light companies, by contrast, will be afforded "all necessary facilities". Fakieh told Monday's open meeting that full details of the program will be revealed on June 11 and that it will come into effect in "three months from now", but he was met by voices of skepticism from the business community regarding the program's value.
Businessmen warned the minister that a failure to renew firms who score poorly in the program in terms of employing Saudi nationals would only serve to "exacerbate delays in construction works", and described current circumstances as "unsuitable for the program".
"The job market as it stands currently can be summed up in the saying, 'the hole's bigger than the patch'," said one businessman.
Fakieh responded by describing it as a "last chance for companies who are lagging behind in Saudization".
"The region as a whole faces a lot of challenges concerning unemployment," the minister said. "In Saudi Arabia there are 448,000 persons out of work, while there are eight million foreigners working in the country, causing losses to the economy of more than 100 billion riyals a year through money transfers going abroad."
The minister also said that three quarters of unemployed women had degrees or master's degrees, while 39 percent of young out-of-work males had secondary school qualifications or lower. The unemployment situation is, he said, "complicated".
"I don't have a magic answer to it, there's no magic wand for it, but in the new nationalization program we are depending on both long-term and short-term plans, and we will develop a monitoring mechanism in the Saudi job market until we can guarantee more employment."
Fakieh reassured however, that most companies would currently fall in the "green" bracket, with a quarter in the red bracket.
"Next month every company will be able to log on to the Ministry of Labor website and check its status," he said. "The program will come into effect three months from now."
The minister added that the program would help "redistribute" foreign workers, allowing "green light" companies to acquire visas without restrictions. "It will increase the demand for Saudi staff, and the nationalization of jobs will become everyone's concern," he concluded.
Al-Hayat noted a "poor" attendance at the meeting, which was held at the capital's Chamber of Commerce and Industry, and added that a number of businessmen warned that the new program would "lead to the closure of a lot of businesses".
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