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Home / Contributor / Danish Ahmad Khan / SPECIAL REPORT: Indian economy to be hit hard as expatriates face new job restrictions in Saudi Arabia

SPECIAL REPORT: Indian economy to be hit hard as expatriates face new job restrictions in Saudi Arabia

By Danish Ahmad Khan

Expatriates working in the Kingdom of Saudi Arabia will now be quite worrisome with current and future job prospects at stake. Starting from September onwards this year expatriates in Saudi Arabia will be facing new restrictions in various jobs and activities. The announcement in Arabic posted on the Ministry of Labour and Social Development (MLSD) official website has said that the expatriates would be barred from 12 occupations and activities. The new promulgation will be implemented later this year.

Khaled Abalkhail, official spokesperson of the ministry, was quoted by Zawya as saying that work in 12 activities and occupations would now be exclusively available for Saudi men and women starting from next Hijri year. The move is aimed at helping the Saudi youth get employment in the private sector.

The list of occupations and activities to be off-limits for expatriates would be as follows:

Sales jobs in four categories have been nationalized. These include home kitchenware; office and home furniture; men’s accessories, children’s clothes and ready-made garments; and motorcycles and cars. This will take effect from 11th September 2018.

The rules regarding the sale of eyewear, watches, electric appliances and electronics are also being changed, and would be extended from November 9.

The labour ministry’s promulgation will go beyond next year as well. Starting from 7th January 2019, the rules would be finally extended for the sale of building and construction materials; medical equipment and appliances; carpet and floor-covering stores; car spare parts shops; and sweet shops.

According to the statement, a committee would be formed comprising members from the Ministry of Labour and Social Development, the Human Resources Fund (Hadaf) and Social Development Bank. The committee has been tasked to develop a programme that would ultimately nationalize jobs in the respective industries coming under the provisions of the new regulations.

Currently, several industries are being fully Saudized. The labour ministry has even reported success in sectors like gold shops and telecoms retail. Already many Saudis had been gainfully engaged in these 12 occupations and activities. However, with job reservations now for Saudi nationals only in these sectors, it is hoped that Saudisation targets would be expeditiously reached within the set timeframe.

Job scenario in Saudi Arabia

With the Middle East in turmoil and Saudi Arabia vigorously trying to move away from hugely dependent oil economy, the kingdom will cease to be El Dorado for expatriates in future. This news is surely not good for expatriates as they will have to look for new job opportunities in other countries.

The job scenario for Saudi nationals has been much of a dampener throughout 2017. The latest official statistics have revealed that the total unemployment rate in Saudi Arabia in Q3 2017 has remained unchanged when compared to previous quarter, at 12.8 percent. There are growing numbers of Saudi women who have been seeking employment. The statistics reveal that even the unemployment rate among Saudi women was 32.7 percent in Q3. While for Saudi men the unemployment rate was 7.4 percent.

Saudi Arabia-Indian Expatriates1Popular Saudi daily Okaz had last year published official figures procured from Interior Ministry’s National Information Center. The report said that a total of 11,119,370 expatriates are employed in the private sector. These expatriates were accompanied by 2,221,551 family members, thus totaling to 13,340,921. The majority of expatriates numbering 10,976,854 were aged between 20 and 64. Quite surprisingly though more than 330,000 expatriate working in the kingdom were aged above 60 during H1 2017, whereas only 9,646 expatriates were less than 20 years old. The total population of Saudi Arabia is currently 31,742,308 according to the General Authority for Statistics.

Roadmap for Saudi Arabia

The young, suave, articulate newly-appointed Crown Prince Mohammed bin Salman bin Abdulaziz is also conscious of this fact and wants to keep Saudi nationals, particularly youth, happy in every possible way. He is even going overboard and angered the powerful clergy. The Crown Prince has embarked on an ambitious programme and formulated Vision 2030 constituting a roadmap for Saudi Arabia in order to fulfill its development and economy objectives for next 15 years, and significantly lessen its dependence on oil economy.

Saudi Arabia-Indian Expatriates2The crown prince’s ambitious programme is aimed at boosting employment among the native Saudi population, particularly graduates and women. The campaign for empowerment of women economically is gaining pace, and many programs launched to help them secure jobs. The crown prince’s modernization drive comes despite stiff resistance from conservatives and powerful religious police ‘Mutawa’, who want that Islamic Shariah remains in place in the Wahabbi kingdom and strictly against allowing women to work and mixing with males, in various sectors including supermarkets.

Economic empowerment of Women

The drive to empower Saudi women economically has become successful in recent times. There has been tremendous increase in the number of women employed in the private sector. In the last four years the Saudi women employment figures has shown an astounding increase of 130 percent, according to a study by the Ministry of Labour and Social Development in March 2017. The number of women employed in the private sector in 2012 was 215,000. This has increased to 496,000 in 2016, an average of 8,500 jobs per month. According to the study, women now account for 30 percent of total Saudi workforce in the private sector, up from 12 percent in 2011. The labour ministry has embarked on an ambitious program which will see the increase of the percentage of women to 28 percent in the total Saudi workforce by 2020. The ministry has launched many projects under the National Transformation Programme 2020. One such project has been designed to allow women to work from the comforts of their home. It is hoped that this project would create 141,000 jobs for women.

Future of Expatriates and Indian Economy

The Saudi government’s decision has already put stress on the Indian economy, which is currently in bad shape. Thousands of Indian expatriates have already started sending their families back home because of the huge increase in ‘Expatriate Dependant Fee’ for each family, which has now increased to 1,200 Riyals from 100 Riyals. This has become effective from 1st July 2017.

Saudi Arabia is the biggest employer of Indians than anywhere in the world. Presently, an estimated 30 lakh Indians are gainfully employed in the kingdom, the largest segment being Keralites. The tax is going to increase further and the fee to be doubled in 2018. According to the labour ministry, the ‘Expatriate Dependant Fee’ for each family would be 4,800 Riyals by 2020. The government hopes to generate 65 billion Riyals with this family tax by 2020.

The new promulgation has undoubtedly come as a bad news for both expatriates and Indian economy. The Saudi Ministry of Labour and Social Development is yet to announce specific penalties. But the reports clearly point out that violation of Saudisation in the new sectors won’t be tolerated. Hefty financial fines might be imposed in future, and in some cases even deportation might take place. The family tax has already hit a sizeable section of Indian expatriates in the kingdom, with the low-income expatriates being the worst affected, and all this due to Nitaqat nationalisation programme.

[Danish Ahmad Khan, currently based at New Delhi, is Founder-Editor of IndianMuslimObserver.com – India’s First Online Muslim Newspaper. He can be contacted at indianmuslimobserver@gmail.com]

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