Unemployment in Saudi Arabia (Research Paper Sample)

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UNEMPLOYMENT IN SAUDI ARABIA
INTRODUCTION
Saudi Arabia is one of the richest nations in the globe; still most of its nationals are not acquiring decent and stable jobs to maintain (Al Omran 4). Is it an outcome of poor training or a matter of low quality jobs offered by the economy? In fact more than six million outsiders are waged in Saudi Arabia. So what are the consequences of tolerating such a huge number of foreigners in the labor market? And so do we need to expand the education level of Saudis or should we call for a better educated workforce from overseas? How could the government secure good jobs for young nationals? In this paper we are going to provide a detailed understanding to the issue of unemployment in Saudi Arabia, and later analyze possible solutions to the problem.
Saudi Arabia’s typical appearance as a wealthy nation possessing a lot of oil and rich nationals is not entirely apparent for all the people in the country. In recent times a large number of young people are experiencing hopelessness due to low wages and high levels of unemployment (Al Omran 4). Even worse the private sector is largely dominated by the outsiders, earning low wages under harsh working conditions (Fleischhaker et al. 14). In addition efforts to substitute foreign employees with Saudis are showing to be thought-provoking. Equally Saudi’s have a notion that outsiders are short-term workers whereas they are not seeking for more sustainable long-lasting jobs.
SAUDI LABOUR MARKET
Actually one of the most distinctive features to Saudi unemployment is that most Saudis are unemployed by choice (Ideation Center Insight 4). As it happens they can secure jobs but then again the available employment opportunities do not satisfy their needs and conditions such as the construction works and manual works. According to a CDSI report, a large percent are young and seeking for job opportunities for the first time. In the report, unemployment is projected to have reached 39%, in the ages 25 and beneath (Al Omran 5). It is also reported that individuals who are first time seekers are expected to take low skill level jobs that are generally secured for foreign labor. In particular private investments such as construction companies prefer hiring the foreign workers pool since they can accept low wages and awful working conditions. As such these young Saudis are competing for job opportunities with foreigners without any regulations to protect them.
FOREIGNERS IN LABOR MARKET
Saudi Arabia and the neighboring nations have the highest number of outsiders in the workforce in the labor market (Al Omran 5). It all started during the oil boom in the seventies when projects were faced with shortages of human resources. As such the original intent was to welcome outsiders mostly from other Asian countries, as short-term solution to complete these development projects since Saudi Arabia had limited human resources and expatriates to complete the projects. In the end after the projects were completed these foreigners never left the country instead more and more were allowed in the country. As a result the population has increased to the extent that they have dominated the Saudi economy. Even worse small businesses prefer foreign labor for low-skill jobs such as retail trade, personal services private investors since they can accept low wages compared to the Saudi labor (Fleischhaker et al. 14).
DIVERSE LABOUR MARKETS
Due to the large numbers of foreigners in the Saudi workforce, two distinctive labor markets have been established. One is dominated by Saudi nationals, primarily white collar jobs in government bodies or large industries such as gas and oil companies. As well another market that is dominated by outsiders subjugating low wage employment opportunities with harsh conditional (Al Omran 5). As earlier mentioned, being without a job is a choice and usually claiming that the pay is not worth the effort. As such the government needs careful execution of policies to allow smooth conversion between the two job markets (Fleischhaker et al 24).
Private Sector
As per the Ministry of Labor, average private sector wages had decreased by 0.1 in the period 2007 to 2008 while inflation assessed at 10% in the same period. In fact, 2008 was a productive Saudi economy achieving 281 billion dollars of oil revenue. In the same period more than 175 million new visas were issued for foreigners. According to Abdulaziz Al Omaran’s master thesis, "…it is clear that unemployment and depressed wages was not an outcome of weak economic conditions it is mainly because the nationals are experiencing competition for low skilled jobs with the foreign labor in the private sector" (Al Omran 9).
Public Sector
Public sector is divergent from the private sector, wage levels of government jobs are institutionally set and are often affected by politics more than market dynamics. All the same oil prices and government income are also play a central role in determining the availability of job opportunities in the public sector (Al Omran 10). In the event when the government revenues increase, the public sector is likely to increase wages. Bearing this in mind the Saudis nationals do not want to work for the private industry since their colleagues in the public sector guarantees good salary and working conditions.
WOMEN’S EMPLOYMENT AND EDUCATION
Consistent with a study conducted by Dr. Mona AlMunajjed and published by Ideation Center Insight, the national system of education is failing to train and prepare Saudi women for competitive roles in the labor market, even worse more than 1,000 the Saudi’s unemployed women have a doctorate. Saudi women have been discriminated to customary fields of work such as service business, nursing and teaching (Ideation Center Insight 4). In fact 93 percent of the overall female university graduates specialized in education and humanities.
In addition to that UNESCO, reports that 20.6 % of Saudi women over and above age fifteen are illiterate and only 3 percent of those are employed in the labor market. As such women in the rural areas suffer from high levels of unemployment because of illiteracy, traditional and patriarchal customs. (Ideation Center Insight 4). As part of the Saudization program whereby outsiders are replaced with Saudi workers to solve the issue of unemployment, a number of opportunities were exclusively specified for Saudi women such as photographer, employee, tailor, nutritionist, beautician, and receptionist. As a result women are limited to specific jobs which are already filled by other people especially the foreign workers. Bearing this in mind the Saudi women are competing for jobs amongst themselves.
EDUCATION SYSTEM
Fundamentally the labor market and the education system are not aligned well. As such strict religious control over the curriculum content and lack of forward planning is an indication that young nationals are not well equipped with skills that are essential to meet the economic demands. Consistent with Fakeeh, "…both public and private in Saudi Arabia have to adhere to a collective school curriculum in which deviation is intolerable" (Fakeeh 20). Also it is clear that women education is not exploited effectively as such resources are wasted since a substantial number of women are not able to contribute to the skilled national labor market. It has been reported by Saudis studying abroad that they have been dissuaded from taking philosophy, political science and international affairs as it may challenge the nation’s ideology (Fakeeh 20).
Following a detailed research on the labor market, and education system, it is arguable that the primary causes of unemployment issue can be traced back to nation’s revolution from an agricultural state to an industrial state. In the course of these thriving times, Saudi’s dependence on the revenue from oil the economy was dominated by foreigners leading to a situation where the nationals were less involved in the economy and politics. As a result labor needs were met through the foreign workforce rather than through training and education (Fakeeh 1).
GOVERNMENT POLICIES
To tell the truth Saudi Arabia had a good future in store for the nations together with all the stakeholders that benefited from the thriving times. In actual point the abundant wealth and natural resources should have encouraged the nation building and a dynamic labor market. Now Saudi Arabia is facing serious socio-political and economic complications. Actually these problems date back to the government policies that were established at the period of nation building. It is apparent in the approach used in solving the issue of unemployment. Even so the government has formulated policies such as active labor spending, training nationals and sponsorship policy (Fakeeh 16).
ACTIVE LABOR MARKET POLICIES
Actually active labor market policy plays a central role in tackling unemployment in Saudi Arabia. Authorities stressed that this was one component of a multi-pronged strategy and that accompanying initiatives to aid in matching job seekers with employers, organizing placement programs, training and education systems (Al Omran 22). In general the authorities have dismissed foreign laborers, both skilled and unskilled in its labor markets by assisting the Saudi nationals to be active in the labor market.
SPONSORSHIP POLICY
All expatriate are expected to be sponsored by an employer and is only allowed into the country when he/she has a sponsor. Actually this policy stalls any effort to build a dynamic labor market because employers can abuse their authority and dictate the employment terms and conditions (Al Omran 22). Actually a sponsor acts as a guardian as well as a guarantor and must...