Nitaqat: Saudi employment in construction sector impressive

Updated 10 January 2015
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Nitaqat: Saudi employment in construction sector impressive

Since 2011, several Saudization initiatives have been launched by the Ministry of Labor; notably the Nitaqat program. This program achieved high levels of compliance in the two years since its launch, with companies classified within the red domain dropping by 75 percent, Jadwa Investment says in its 2015 Saudi Economy Report
“We believe that there is still much room for broader enforcement, given that unclassified companies — mainly small businesses — constitute 86 percent of total companies in the Kingdom,” said the Jadwa economists.
Citing data from the Ministry of Labor, they said that the Saudization rate in the private sector increased from 10.9 percent to 15.2 percent between 2011 and 2013. The growth in employment of Saudis surpassed that of foreigners since the start of reforms by the Ministry of Labor.
Saudi employment growth in the private sector averaged 26.7 percent between 2011 and 2013 , while growth in foreign employment averaged 9.4 percent during the same period, said the Jadwa report.
Between 2011 and 2013, the transport and communications sector recorded the highest improvement in Saudization rates from 9 percent to 20 percent. Manufacturing also underwent a notable improvement in Saudization rates (from 13 percent to 19.3 percent). Saudization rates in the retail and construction sectors also improved from 12.9 percent and 7.2 percent to 18.4 percent and 10.3 percent respectively, said the report.
Taking average growth for the period between 2011 and 2013, improved Saudization rates in the transport sector came mainly as a result of a significant 59 percent growth in employment of Saudis. Average Saudi employment growth in the manufacturing and wholesale and retail sectors was also high, at 25 percent each.
Meanwhile employment growth for non-Saudis averaged just 4 percent and 7 percent respectively. The construction sector — the most labor intensive part of the private sector — recorded an impressive 34 percent average growth in employment of Saudis, while employment of non-Saudis in the sector grew by 14 percent.
The higher growth in Saudi employment in the construction sector is impressive given the particularly high wage differential from non-Saudis. Saudis in the construction sector earned a monthly average of SR3,330 in 2013, while non-Saudis earned only SR1,029.
“Looking ahead, we see that while employment growth of nationals in labor intensive sectors is expected to continue improving as companies in these sectors adjust to new norms, further raising the Saudization rate in high-skilled sectors — mainly manufacturing – remains a challenge,” said the researchers.
“We believe that one of the main impediments to higher growth of Saudi employment in these sectors is the lack of skill-matching between educational achievements and these sector’s requirements; a challenge that we believe is being matched through ongoing initiatives that include significant investments in the education sector particularly on vocational training as well as the ongoing King Abdullah foreign scholarship program,” the researchers added.


Barclays payments to Qatar would have been ‘unacceptable’ to market, London court hears

Updated 4 min 41 sec ago
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Barclays payments to Qatar would have been ‘unacceptable’ to market, London court hears

  • The UK Serious Fraud Office alleges that four bankers agreed to pay £322 million in secret fees to Qatar
  • It is claimed that Barclays agreed to pay Qatar more than double the standard 1.5 percent investment commission and hid this from other investors

LONDON: Former Barclays Chairman Marcus Agius could not remember if he was told the bank was paying higher fees to Qatar than other investors during an £11.2 billion ($14.6 billion) fundraising in the depths of the 2008 financial crisis, a London court heard on Tuesday.

However he said that paying such commission to one set of underwriters and not the other would have been “unacceptable to the market.” Agius is not accused of any wrongdoing.

He was the first witness to testify in the trial of four former Barclays executives, who include the then CEO John Varley.

“I would have wanted to understand why it would’ve been necessary,” he told the court.

The UK Serious Fraud Office alleges that the four bankers agreed to pay £322 million in secret fees to Qatar.

During the fraud trial — which began in January — the prosecution told the court that the then Qatari Prime Minister Sheikh Hamad bin Jassim demanded a personal fee for investing in Barclays.

It is claimed that Barclays agreed to pay Qatar more than double the standard 1.5 percent investment commission and hid this from other investors by making the payments through what prosecutors alleged were bogus Advisory Services Agreements, or ASAs, Southwark Crown Court heard.

Agius also told the court that he feared resignations from the board in 2008.

“Any one of them might have said, ‘This wasn’t what I signed up for, how do I get out of here?,’” he said.

“I’m clear that in June 2008 we at Barclays did not anticipate how much worse things were going to get. I don’t think we thought it was going to go as badly as it ultimately did.”