Growing youth population in Saudi offers economic potential
Growing youth population in Saudi offers economic potential
Fifty percent of Saudi Arabia’s population is below 25 years, a figure set to increase further in the future, leading to a phenomenon widely referred to as a “youth bulge”.
Economists debate whether Saudi’s burgeoning youth population will be a burden or advantage to the country.
Such a large number of young people brings with it enormous opportunity for growth through the generation of innovative, new ideas, and a sufficiently large work force to power these ideas into practice.
However, if not managed appropriately, a rapidly growing population of young people could lead to an increased rate of unemployment amongst 15 to 25 year olds, a figure which already stands at around 30 percent.
The IMF Saudi Arabia Country Report found that a large number of young people will enter the local job market over the next decade, and that creating a sufficient number of rewarding jobs will be a challenge.
However, generating jobs is not the only difficulty the Saudi government faces.
Around 2 million new positions were created in the Kingdom between 2008 and 2012, but three quarters of these jobs were filled by non-Saudis, suggesting the local workforce needs to become more productive and competitive in the face of mounting competition from expatriate workers.
The Saudi Arabian Government has recognized the importance of harnessing the potential of its young people through education.
More than SR204 billion from the 2013 budget was channelled into education, a staggering 25 percent of the Government’s annual spending, and around 10 percent of its GDP.
Saudi Arabia is now ranked as the world’s highest spending nation on education.
Such initiatives have had a positive impact on the learning outcomes of individuals in the country, with the literacy rate among adults currently standing at around 97 percent, according to World Bank data, up from 30 percent in 1970.
The number of individuals completing school and tertiary education is also on the rise.
Mark Andrews, Pearson’s director of qualifications in the Middle East, says that these educational developments are instrumental in addressing the skills shortage the Kingdom faces.
Andrews says that providing young Saudi nationals with an education that will lead to placement in a rewarding job is not only important for the Kingdom’s youth, but also to the Saudi economy.
“Saudi Arabia’s youth bulge offers enormous opportunities in both Saudi and wider region. It has the potential to increase economic growth and living standards, and help realize the government’s goal of greater economic diversification,” he said.
Andrews said: “However, as the IMF report makes clear, equipping young people with effective education and training is critical to ensuring the youth bulge becomes an asset — and not a liability. Education and training needs to focus on preparing young people for the workforce.
Pearson’s research in the Gulf region indicates many local employers believe that the education system does not always prepare school and university leavers with essential employability skills.” Andrews added:
“Employers tell us they want candidates with 21st century skills, such as communication, collaboration, responsibility and problem-solving.”
Pearson’s 2009 global study into the links between education and employment, detailed in the Effective Education for Employment report found that skills gaps exist for both new employees and more experienced workers.
Gaps around leadership, teamwork, creativity and innovation continue to present employers with difficulties in training and development. And this is a problem not only for Saudi Arabia, but countries right around the world.
Andrews believes that giving young Saudi nationals the right workplace skills will help this growing demographic group enter and succeed in employment and contribute to the long term prosperity and stability of the country.
“Giving young Saudis an education that allows them to enter the workplace, and contribute meaningfully in their careers will not only help reduce youth unemployment,” he said.
“Making young Saudis more effective and productive in their jobs will also foster economic growth and raise the standard of living in the Kingdom. Saudi Arabia’s vast youth population has the potential to become an economic powerhouse in the region, but it is a matter of channelling that potential into positive and productive outcomes,” he added.
Philippines posts 15 percent drop in cash remittance from Middle East
- There has been a 15 percent decrease in remittances from Overseas Filipino Workers (OFWs) in the Middle East, with fund transfers from Libya and Israel falling the most at 73 percent and 61 percent — Central Bank of the Philippines
- Remittances from Kuwait fell by 20.4 percent despite resumption of OFW deployment; Bahrain showed negative 22.9 percent; transfers from Oman dropped by 38.3 percent; and Saudi Arabia showed a slide of 10.4 percent
MANILA: Cash remittance from Filipino workers (OFW), particularly those in the Middle East, saw a steep decline from January to July this year, figures from the Central Bank of the Philippines (BSP) show.
A lawmaker noted that even the lifting of the ban on deployment of Filipinos to Kuwait last May failed to stop the remittance plunge.
Based on latest BSP data, there was 15 percent decrease in remittances from OFWs in the Middle East, although fund transfers from Libya and Israel fell the most at 73 percent and 61 percent respectively.
With that, Rep. Henry Ong, chairman of the House Committee Chair on Banks & Financial Intermediaries, said the policy shift in OFW deployment priorities must happen “sooner rather than later.”
“Filipinos are being held hostage by armed groups in Libya. Israel recently welcomed President Rodrigo Duterte on a brief visit. However, the remittances from these two countries pale in comparison with those from Saudi Arabia, the United Arab Emirates, Bahrain, Kuwait, and Oman, which were in the high double-digit percentages decline,” he said.
Remittances from Kuwait fell by 20.4 percent despite the resumption of OFW deployment last May. Bahrain showed negative 22.9 percent, transfers from Oman dropped by 38.3 percent and Saudi Arabia showed a slide of 10.4 percent.
Qatar is the exception. The remittances decline from Filipino workers there was only 6.3 percent.
The Leyte second district representative pointed out: “There should not even be Filipinos in Libya because the security situation there is horrible, but still Filipinos go because that is where they have found jobs on their own.
“OFWs clearly have bleak and low-paying job prospects here in the Philippines because our wages are way below what they can earn abroad, so we have no choice but to deploy them elsewhere, to countries that will pay them well and respect their rights as migrant workers and as people of varied gender.” .
For this to happen, Ong said the priority list of alternative countries “must include those states that are signatories to the international conventions on human rights, labor, social security, and migrant workers.
“The other criterion would be the economic growth prospects of the target host countries because that will determine how well they will be compensated for their services. OFWs will go where they are respected, wanted, and paid well.”
Ong lamented, though, that “it does not seem the concerned top officials have what it takes to help OFWs find better jobs in new host countries.
“They are just doing bureaucratic procedures and damage control on the problems that keep cropping up, but we do not see systemic, long-term solutions. Suffering through all that are the OFWs.”
Meanwhile, aside from the decrease in cash remittance, the Philippines also suffered a decline in deployment of OFWs in 2017 after 10 years of continuous growth.
Recruitment consultant and migration expert Emmanuel Geslani, citing statistics from the Philippine Overseas Employment Administrstion (POEA), said deployment of OFWs to 180 countries went down by 9 percent in 2017 compared ith the previous year. The year 2016, Geslani said, was a banner year of deployment for OFWs with total deployment hitting more than two million.
POEA records show that only 1,992,746 OFWs were deployed in 2017. Geslani said this is the first time after 10 years of continuous increase starting in 2008 with 1,236,613 deployment; 2009 with 1,422,382; 2010 with 1,476,826; 2011 with 1,687,463; 2012 with 1,802,031; 2013 with 1,826,804; 2014 with 1,832,668; 2015 with 1,841,205; and 2016 with 2,112,331.
Geslani said the decrease may be attributed to actors, such as the decline in the hiring of new workers to Saudi Arabia, from 219,134 in 2016 down to 163,238 in 2017.
A decrease in the number of new hires was also noted in the rest of the top ten OFW destinations, which include Kuwait, Qatar, Hong Kong, Taiwan, the UAE, Japan, Singapore, Malaysia and Oman.
“Another reason for the decline is the increasing shift of Saudi Arabia to employ more citizens to work in companies and malls as part of its ‘Saudization’,” Geslani continued.
In addition, more major projects in the Kingdom have been shelved or delayed, resulting in the exodus of more than 30,000 Filipino skilled workers in construction, maintenance services and oil industries, he added. “Crude oil, which has stayed in the $70-80 level, has prevented Middle East countries from going on construction and infrastructure projects, except for Qatar which is preparing for the football World Cup in 2022.”
Even the household service workers sector also dropped by 8 percent in 2017 owing to internal controls implemented by the Philippine labor officers in the Middle East, Geslani said.
For 2018, he predicts that deployment of household service workers is not expected to go beyond the 200,000 mark with the deployment ban imposed in Kuwait resulting in the loss of 40,000 jobs.