Saudis to limit expat work force

Tuesday, May 31, 2011

Gulf News

Manama: Saudi Arabia will not renew the work permits of foreign workers who have spent six years in the country as part of its plan to create jobs for nationals, its labour minister was quoted as saying yesterday.

The current situation calls for strong cooperation between the government and the private sector in solving the problem of unemployment with hundreds of thousands looking for work, Adel Fakieh was quoted as saying by Al Hayat newspaper.

Fakieh did not say when the decision would be implemented or whether it would be applied to all foreign workers or to specific jobs. The move is part of a 10-point programme to intensify the Saudisation of jobs in the private sector to reduce unemployment. The minister also noted that private companies will be given a five-month grace period to regulate their companies following the announcement.

The Gulf Cooperation Council (GCC) labour ministers have been pushing for the last five years for the adoption of a scheme to limit the residency of foreigners, mainly unskilled Asians, to six years.

The reasons for the cap proposal varied between preserving the national identity from the onslaught of foreign cultures to reforming the labour market to fighting visa trafficking.

Residency cap

In 2007, the UAE labour minister said that enforcing a residency of six years cap on unskilled workers will contribute to solving the problems associated with the influx of foreign workers and protect our identity.

However, none of the proposals, first championed by Bahrains former labour minister Majeed Al Alawi, were approved by the GCC leaders, particularly because the business communities have strongly resisted all attempts to change the labour market status-quo.

Saudisation drive

Prominent Saudi businessman Muneef Al Shamri told Gulf News that it is high time the ministry of labour intervened to work out a new programme aimed at intensifying the Saudisation drive but there were some government procedures that force employers to recruit foreign manpower.

Al Shamri suggested that the labour ministry increase the recruitment fee to discourage companies from hiring foreign workers and also set a minimum wage to avoid the exploitation of cheap foreign labour. Several analysts also voiced concern about the imposition of a cap, claiming that it would have negative effects on the free economy of the GCC states where decisions are made according to supply and demand forces.

Bahrain business analyst Mohammad Bukannan yesterday said that the decision would have deep social effects alongside the economic issues it was bound to cause.

Economically, the decision should apply only to unskilled labourers who can be replaced after some years, he said. Those with skills are needed by the Gulf economies because of their structure which dictates the constant presence of highly qualified people, he said.

Telling people to leave after six years will not encourage many highly skilled people to come to the Gulf, he said.

By Habib Toumi, Bureau Chief