Saudis strug­gle af­ter for­eign work­ers leave

Cit­i­zens haven’t filled jobs va­cated by ex­pa­tri­ates.

The Atlanta Journal-Constitution - - NATION & WORLD - By Ka­reem Fahim

RIYADH, SAUDI ARA­BIA — Mo­hammed Iqbal joined the throng of for­eign work­ers bound for Saudi Ara­bia dur­ing the oil boom of the 1970s, af­ter re­cruiters from Pepsi vis­ited his na­tive In­dia and dan­gled an op­por­tu­nity in the king­dom driv­ing a de­liv­ery truck.

The work­ers ar­rived from Asia and the Mid­dle East, of­ten on short-term con­tracts, to sat­isfy the Saudi govern­ment’s am­bi­tious de­vel­op­ment plans. But Iqbal stayed, rais­ing three chil­dren and find­ing work over the decades, even as the Saudi govern­ment’s pri­or­i­ties changed and its con­trol over the for­eign la­bor mar­ket tight­ened.

Re­cent shifts in govern­ment pol­icy, how­ever, have forced Iqbal to con­sider pulling up stakes, at the age of 60.

The govern­ment has im­posed fees on the de­pen­dents of ex­pa­tri­ate work­ers and re­stricted for­eign­ers from work­ing in cer­tain sec­tors. Ris­ing costs, as part of an over­haul of the econ­omy in­tended to make Saudi Ara­bia less de­pen­dent on oil, have hit low-wage for­eign work­ers es­pe­cially hard. The re­sult has been a mas­sive ex­o­dus of for­eign­ers from the la­bor force.

The abrupt out­flow has also il­lus­trated the steep chal­lenges fac­ing Crown Prince Mo­hammed bin Sal­man as he tries to re­make the Saudi econ­omy. A cen­tral pil­lar of his plan in­volves cre­at­ing em­ploy­ment for Saudi cit­i­zens in the pri­vate sec­tor, where jobs are now over­whelm­ingly held by for­eign­ers. In the short term, though, Saudi cit­i­zens have not filled the jobs that ex­pa­tri­ates are va­cat­ing, adding to the pres­sure on busi­ness own­ers al­ready strug­gling with an eco­nomic down­turn.

Be­tween early 2017 and the third quar­ter of last year, more than 1.1 mil­lion for­eign­ers left the work­force in Saudi Ara­bia, ac­cord­ing to the lat­est fig­ures from the govern­ment sta­tis­tics agency. It is not the first re­cent largescale ex­o­dus of for­eign­ers: Hun­dreds of thou­sands left or were de­ported in 2013 and 2017. But while that ex­o­dus was largely the re­sult of a govern­ment crack­down on peo­ple vi­o­lat­ing a work visa spon­sor­ship pro­gram, the lat­est flight ap­pears to re­flect broader hard­ships and un­ease, among for­eign­ers and Saudi cit­i­zens alike.

The upheaval has added to a sense of un­cer­tainty in the coun­try as Saudi lead­ers grap­ple with a de­pressed econ­omy, strug­gle to at­tract for­eign in­vest­ment and try to re­pair the king­dom’s im­age af­ter the mur­der of Washington Post con­tribut­ing colum­nist Ja­mal Khashoggi by Saudi of­fi­cials in Is­tan­bul four months ago.

There are signs that the ex­o­dus has caught the govern­ment by sur­prise. Late last year, Saudi of­fi­cials were re­port­edly con­sid­er­ing lift­ing or eas­ing the fees im­posed on ex­pa­tri­ate work­ers be­cause of the harm the pol­icy had caused the econ­omy, ac­cord­ing to Bloomberg News. But Saudi of­fi­cials have yet to an­nounce any change in the pol­icy, and the fees re­main in place.

In the long term, the flight of for­eign­ers serves one of the govern­ment’s most ur­gent pri­or­i­ties: find­ing jobs for the more than half of the Saudi pop­u­la­tion that is un­der the age of 30 — and in do­ing so, staving off the kind of youth dis­sat­is­fac­tion that has led to protests in other Arab coun­tries and un­nerved the Saudi lead­er­ship.

But for now, a ma­jor con­cern has been a spike in the un­em­ploy­ment rate over the past two years to as high as 12.9 per­cent. The in­creas­ing job­less rate is forc­ing the govern­ment to re­vise its short-term un­em­ploy­ment goals and fur­ther ex­pos­ing the gap be­tween the ex­pec­ta­tions of Saudi work­ers and the jobs that are be­com­ing avail­able to them — in lower-wage con­struc­tion or re­tail jobs, for ex­am­ple — as the for­eign­ers leave.

Karen Young, an ex­pert on the po­lit­i­cal econ­omy of the Per­sian Gulf states at the Amer­i­can En­ter­prise In­sti­tute, said that while it was good news that more Saudi women were en­ter­ing the work­force, many with higher ed­u­ca­tion de­grees were not find­ing po­si­tions that matched their skills.

The busi­ness en­vi­ron­ment in Saudi Ara­bia has also suf­fered be­cause of the crown prince’s more ag­gres­sive poli­cies, in­clud­ing the ar­rests of hun­dreds of busi­ness ex­ec­u­tives, pub­lic of­fi­cials and royal fam­ily mem­bers dur­ing what the govern­ment called an “anti-cor­rup­tion” sweep last year. As the crack­down spooked in­ter­na­tional in­vestors, “lo­cal in­vestors com­plain of new hur­dles to li­cense and reg­is­ter busi­nesses, and com­ply with new hir­ing poli­cies” that re­quire the hir­ing of Saudi cit­i­zens, Young said.

The govern­ment’s re­sponse — to fo­cus on “pump-prim­ing,” or in­creased govern­ment cap­i­tal ex­pen­di­tures — was in line with what many econ­o­mists would sug­gest to start growth when for­eign in­vest­ment and the lo­cal econ­omy were slug­gish, Young said. “But that is not a sus­tain­able long-term growth strat­egy. The govern­ment can­not spend its way out of this for­ever,” she added.

In a sign it was re­spond­ing to the eco­nomic fears, the govern­ment re­cently held its sec­ond ma­jor in­vestor con­fer­ence in less than four months, in­tended to draw hun­dreds of mil­lions of dol­lars in in­vest­ment for min­ing, en­ergy and other in­dus­tries. Also, the Saudi lead­er­ship re­cently an­nounced what it said was the con­clu­sion of the anti-cor­rup­tion purge, an­other ma­jor cause of in­vestor anx­i­ety.

The govern­ment has also pro­moted plans to ex­pand the en­ter­tain­ment in­dus­try and tourism, bet­ting that those ini­tia­tives will cre­ate jobs while also dis­tract­ing from the crit­i­cism of the king­dom over its more re­pres­sive poli­cies.

In the mean­time, in im­mi­grant neigh­bor­hoods, the ex­o­dus is im­me­di­ately ap­par­ent. Build­ings are emp­ty­ing, stores staffed by for­eign work­ers are strug­gling or shut­tered, and nearly ev­ery­one knows fam­i­lies who have left or are strongly lean­ing to­ward head­ing home.

Those leav­ing or con­sid­er­ing do­ing so in­clude sin­gle men who spent a few years in Saudi Ara­bia, build­ing up their sav­ings or send­ing their earn­ings to fam­ily back home. And as the ex­pa­tri­ates have em­barked on an anx­ious search for work out­side the king­dom, their home coun­tries are brac­ing for the im­pact of a po­ten­tially dra­matic decrease in re­mit­tance pay­ments.

Chris­tian La­cap, orig­i­nally from the Philip­pines, had worked in the coastal Saudi city of Jid­dah for the past seven years, but he said he de­cided to leave Saudi Ara­bia be­cause of price hikes, which were im­posed by the govern­ment as part of its eco­nomic pro­gram.

Saudi cit­i­zens, with bet­ter-paid govern­ment jobs, could ab­sorb the ris­ing costs.

“But it’s big for us,” he said. “We have min­i­mum salaries. It’s too hard.”

La­cap, who works in a restau­rant, did not have a job lined up back in the Philip­pines and was hop­ing to go to an­other coun­try — maybe South Korea or Canada — where the prospects were bet­ter, he said. He said he doubted whether a Saudi worker would take his job.

Oth­ers, such as Iqbal, said they were hold­ing out for now.

He had lost his last job, at a mar­ket re­search com­pany that had down­sized as it strug­gled to pay the new govern­ment fees. Iqbal had been un­able to find work since and feared his age was be­com­ing as much a fac­tor as the “Saudiza­tion” ef­fort to re­place for­eign work­ers with na­tion­als. The cost of util­i­ties and ba­sic goods was ris­ing, he said. Medicine was be­com­ing more ex­pen­sive for his wife, who is diabetic. Many of his friends had al­ready left, so it was only a mat­ter of time, he reck­oned, be­fore he joined them.

“No one wants to live here. Ev­ery­one is go­ing back to In­dia,” he said, adding that he had planned to work in Saudi Ara­bia for at least an­other five or six years. “I’m very sad, but what can I do?”


The ex­o­dus of more than 1 mil­lion for­eign work­ers in Saudi Ara­bia since 2017 has added to a sense of un­cer­tainty in the coun­try. A ma­jor con­cern has been a spike in the job­less rate over the past two years to as high as 12.9 per­cent.

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