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Create jobs for Saudis, but don’t get rid of expats, says expert

Last updated: Tuesday, April 01, 2014 1:03 AM

Saleh Fareed
Saudi Gazette

JEDDAH – The Kingdom should focus on creating new jobs for Saudis rather than replacing the existing expat workers, according to an expert.

Fadhel Kaboub, Ph.D. Associate Professor of Economics at Denison University and a Research Associate at the Levy Economics Institute of Bard College and the Center for Full Employment and Price Stability, thinks that it would be a mistake to lose the current expat workforce that has contributed so much to the local economy.

“When you look at the number of Saudis enrolled in Hafiz, it is just about one quarter of the number of expats working in the Kingdom.”

Kaboub stated that the employment obstacles faced by men and women are very different in any society, but challenges are more noticeable in Saudi Arabia.

“There are certainly more family constraints on women that can be tackled by new regulations such as workplace childcare facilities, maternity leave benefits, transportation programs, flexible work schedule, and home-based work options.

“About 80% of unemployed Saudi women have a university degree, so there is a tremendous talent pool that remains untapped. Women’s labor force participation remains much lower than men’s, so you can only imagine the potential increase in annual economic growth that the economy can achieve,” he said.

Kaboub believes Arab countries should invest in vocational and professional education.

“I truly believe that on-the-job training is necessary in any profession. Employers need to realize that they also need to invest in professional development beyond the first few weeks or months of traditional training. This can be an expensive commitment for businesses, especially small size firms, which is where government support can fill the gap in order to ensure a macro scale improvement in professional skills and productivity. I don’t believe in scarcity of skills in talent. These are producible resources, we just have to identify the skills that the economy needs and target our efforts in order to produce them, cultivate them, and maintain them,” he said.

The Kingdom, where more than two-thirds of the population is younger than 30 and about 100,000 graduates enter the job market each year, should take tough measures to solve the unemployment situation, according Kaboub.

“In a way, the unemployment situation in Saudi Arabia is similar to that experienced by many Arab countries. Nearly half the Arab population is below the age of 30. The so-called demographic “youth bulge” represents a significant logistical challenge for the labor market, but it is also a tremendous opportunity to tap into this massive pool of talent and energy that young Saudi men and women have,” he said.

Kaboub said the private sector has chronic vacancies that it cannot fill because of skills mismatch or average salary/incentive gaps between expats salaries, government salaries (SR6,000), private sector salaries (SR4,000), living wage (SR5,800) and Hafiz stipends (SR2,000).

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