Saudi employment growth in private sector remains healthy

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Updated 11 October 2015

Saudi employment growth in private sector remains healthy

JEDDAH: The private sector was able to improve annual hiring of Saudi nationals from an average of 64,000 between 2006 and 2010, to 92,000 between 2011 and 2014, according to a report from Jadwa Investment.

Between 2006 and 2014, the number of total jobs created in the private sector (for both Saudis and non-Saudis) was, on average, 214,000 per year, it added.
“This excludes 2010 as we believe the employment growth from that year to be inconsistent with the long-term trend,” said the Jadwa researchers, who compiled the report titled — Saudi labor market outlook: Current and long-term challenges.
The report looks into data for the period 2005 — H1 2015 and analyzes the dynamic trends in the Saudi labor market.
The Saudi unemployment rate fell slightly to 11.6 percent during the first half of 2015, despite year-on-year growth in total Saudi employment continuing to fall to 1.1 percent, said the report.
The slower growth in total Saudi employment was mainly due to slower hiring levels in the public sector, while Saudi employment growth in the private sector remained healthy, added the Jadwa report.
It said that  2014 full year data showed that the increase in Saudi employment and Saudization in the private sector was associated with positive growth in labor productivity in the sector.
Looking forward, the economists forecast three scenarios for employment of Saudi nationals in the private sector These three scenarios correspond to three different Saudi unemployment rates by 2025:
* A high Saudi employment growth scenario yielding zero percent Saudi unemployment, which corresponds to the Ministry of Economy and Planning’s (MEP) long-term strategy.
* A baseline Saudi employment growth scenario yielding 6 percent Saudi unemployment by 2025.
*  A no-action scenario yielding 16.9 percent Saudi unemployment rate.
The report also said that 2014 data from the General Organization for Social Insurance (GOSI) showed a narrowing gap in wage differentials between Saudis and non-Saudis in the private sector. However, the differential remains sub-standard.
According to the data, average monthly wages for Saudis in the private sector increased from SR5,171 in 2013 to SR5,519 in 2014 (6.7 percent, year-on-year), while wages for non-Saudis increased from SR1,489 to SR1,636 (12.2 percent, year-on-year) during the same period. Data from the Ministry of Labor (MOL) shows a similar trend.
Official data shows that while private sector employment growth of Saudi nationals slowed slightly from 7.3 percent in 2013 to 6.8 percent in 2014, growth in public sector employment of Saudis fell from 7.2 percent to 3.3 percent during the same period, its lowest in six years.
The number of Saudi workers in the public sector reached 3.3 million in 2014, up from 3.2 million in 2013. However, the slower employment growth relative to the private sector has led to a falling proportion in public sector employment of Saudi nationals. This slower growth has also meant that the sector’s contribution toward overall employment growth of Saudis was now lower than that of the private sector.
As for the private sector, the Saudization ratio stood at 22.1 percent in 2014, meaning that the remaining 77.9 percent of jobs were held by non-Saudis.
Between 2006 and 2014, the number of total jobs created in the private sector (for both Saudis and non-Saudis) was, on average, 214,000 per year.
“This excludes 2010 as we believe the employment growth from that year to be inconsistent with the long-term trend,” said the report.
“As for our forecasted period, we assume the annual number of jobs to be created by the private sector (for both Saudis and non-Saudis) to reach 265,000,” it added.
Despite the higher forecast number of annual jobs, the growth rate is actually lower. This is in part due to a higher base.
“Our forecast for lower growth in private sector employment (for both Saudis and non-Saudis) is because we believe the actual employment from the period 2006-2014 to be on the high end,” said the report.
We believe this is in part due to the sweeping labor market measures undertaken by the Ministry of Labor between 2011 and 2013.

Eni issues fraud complaint over suspect Iraqi shipment

Updated 18 July 2019

Eni issues fraud complaint over suspect Iraqi shipment

  • Italian oil multinational asks if rejected tanker cargo contained Iranian crude targeted by US sanctions

LONDON: Eni has filed a fraud complaint against its former head of oil trading over a suspect Iraqi crude oil shipment, amid concerns inside the Italian oil major that the failed delivery may have included Iranian crude targeted by US sanctions.

In the filing to the Milan prosecutor’s office, Eni accused its former head of trading and operations, Alessandro Des Dorides, of misleading all parties to the deal and hiding the role of a small Italian oil trading firm, Napag.

Two other senior employees were either demoted or suspended as a result of the failed shipment, sources said.

Eni said it had suspended dealings with Napag in February over a separate investigation by Milan prosecutors into suspected obstruction of justice by members of Eni’s former legal team.

Eni said that it fired Des Dorides at the end of May, after he had been in his job about six months, for what it said was an unrelated petrochemical deal with Napag in 2018.

Napag did not respond to an emailed request for comment or answer phone calls.

Des Dorides did not respond to several requests for comment from Reuters via email or LinkedIn. Reuters could not locate legal representation for him.

Eni also declined to comment. Eni said it “does not comment on ongoing investigations and internal due processes.”

The crude arrived aboard the White Moon tanker at the end of May for offloading at the Milazzo refinery in Sicily, which is part-owned by Eni. The Italian oil major, which produces oil in Iraq and is a regular buyer of Iraqi crude, was solely responsible for the cargo.

However, Eni said it rejected the delivery because it did not match the Iraqi Basra Light crude it expected from its counterparty, the Dubai-based trading arm of Nigerian firm Oando.

After sitting offshore for three weeks, the White Moon sailed back to the Gulf. The tanker manager did not respond to a request for comment.

Two sources at Eni said the White Moon’s 1 million barrel cargo created panic within the company over fears the crude could be, at least partially, Iranian.

Handling Iranian oil would have breached sanctions the US reimposed or extended last year after quitting a nuclear deal between Iran and world powers.

Washington aims to reduce Iran’s exports to zero and force the Islamic Republic to renegotiate that nuclear deal, curb its missile program and modify its behavior in the Middle East.

Iran has called on other parties to the accord to shield it from the effects of US sanctions and has sought to circumvent US restrictions by selling more of its oil undercover.

Following the rejection of the White Moon shipment in June, the head of the Italian Senate Industry Committee wrote to Eni Chief Executive Claudio Descalzi to clarify the origin of an oil cargo labelled as coming from Iraq, the head of the committee said.

The head of the committee declined to comment to Reuters on the oil’s possible origins.

Eni said it bought the crude from Nigerian firm Oando, who in turn bought the oil from the London branch of Italy’s Napag.

Oando said it took back the cargo from Eni, but declined to comment further on the origins of the cargo as it was “in the middle of a resolution” over the rejected oil. Oando said the terms of the deal were “normal for the trading industry.”

Italian prosecutors cannot legally comment on any investigation unless there is an exceptional circumstance.

Trading sources familiar with the deal said the offer terms for the crude should have raised alarms internally even before its arrival off Sicily. The offer was at a significant discount to typical Iraqi trades, was paid for in euros and was from a firm that is new to the region, they said. Physical oil is commonly traded in dollars.

Eni said that the mismatch in the crude’s chemical composition “coupled with other red flags led to the decision to terminate the transaction.”

The oil loaded onto the White Moon came via two ship-to-ship transfers that makes the origin harder to track, sources said.

The crude bought from Oando was loaded onto the White Moon from another vessel, the New Prosperity, but that vessel itself had been loaded with oil from a third tanker, the Abyss.

The Abyss makes regular voyages through the Mideast Gulf with its transponder switched off for days at a time, according to Refinitiv Eikon ship tracking. The transponder was switched off between April 24 and May 3 when it transferred oil to the New Prosperity.