Unemployment on the rise in Saudi Arabia

3.2 million Saudis are unemployed, Saudi Arabia’s Labour and Social Affairs Minister, Dr. Ali Al-Namlah, said while giving a lecture at King Abdul Aziz University yesterday.

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By  Massoud Derhally Published  September 22, 2002

3.2 million Saudis are unemployed, Saudi Arabia’s Labour and Social Affairs Minister, Dr. Ali Al-Namlah, said while giving a lecture at King Abdul Aziz University yesterday.

Al Namlah indicated that the unemployment rate will grow incrementally and that unemployed Saudis could fill jobs occupied by some 5 million expatriates in the Kingdom, according to the daily Arab News.

“We have Saudis seeking jobs while at the same time we have seven million expatriates in the kingdom, of whom five million are workers,” al-Namlah said. Unofficial figures indicate that remittances from foreigners to their home countries are an estimated $18 billion.

The minister pledged greater efforts to replace expatriate workers with nationals.

The Kingdom approved in May 2002, preliminary legislation that will levy a 10 percent income tax on expatriates whose salary is SR3,000 ($800) or higher.

However, the Arab News quoted Mohammed Al-Qunaibet, a Shoura member as saying, “The 10 percent has been proposed by the finance committee, but the council has not determined as yet a specific percentage.”

Some economists and analysts say if Saudi Arabia carries on with the same economic growth of the 1990s then the chances are that the percentage rate of unemployment will increase because the GDP will be growing at a lower rate than population.

There is pressure on policy makers to privatise, liberalise and to modernise the legal system besides many other economic reforms in order to promote economic growth and to allow for the economy to grow faster than the population growth, says Said Al Shaikh, chief economist at Saudi Arabia’s largest bank, the National Commercial Bank.

“If the economic growth does not rise above 3.5% chances are that there will be population growth exceeding economic growth and the capacity of the economy will not be sufficient enough to absorb those people entering the labour force,” added Al Shaikh.

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