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Saudi Arabia

New Nitaqat under Vision 2030

Saudi Labour Minister Mufrej Al-Haqbani gestures as he speaks during a Euromoney conference in Riyadh, on Tuesday. (REUTERS)

RIYADH: The government plans a new set of labor quotas and incentives to reduce unemployment as it tries to wean its economy off oil exports, said Mufrej Al-Haqabani, labor minister.

The changes are part of a wider reform plan — Vision 2030 —announced by Deputy Crown Prince Mohammed bin Salman.
“There is no doubt that unemployment is a looming specter and we will take all measures, whether job creation, job substitution or even, if required, increasing the Saudization target,” said Al-Haqabani. He was referring to the possibility of restricting certain jobs to Saudis and pressing companies to employ higher ratios of Saudis to foreign workers.
Cutting the jobless rate to 7 percent by 2030, and raising women’s participation in the labor force to 30 percent from 22 percent, are among a raft of targets in the new reform plan.
The official unemployment rate among Saudis is 11.6 percent and net employment of Saudis rose by only 49,000 in 2015, its slowest increase since records began in 1999, as the government cut spending because of low oil prices.
Al-Haqabani said the government was ready to intervene on both the supply and the demand sides of the labor market.
“We expect we will need from 1.1 million to 1.3 million jobs to reduce the unemployment rate to 7 percent.”
He said the government planned a new form of Nitaqat that would not focus merely on the numbers of Saudi nationals hired but also on factors such as women’s employment, the average pay of Saudi nationals, the ratio of the wages of Saudis to non-Saudis, and the sustainability of jobs occupied by local citizens.
“The new Nitaqat is not quantitative, based on the number of Saudis, but it will include other variables... We will announce it in two to three weeks, and it will be into effect within five months,” Al-Haqabani said.
About 10 million foreigners are working in Saudi Arabia. About two-thirds of Saudi workers are employed by the public sector.
“There are no exceptions from the Nitaqat for any sector, but the quotas are lower for some sectors according to their conditions,” Al-Haqabani said.
“Retailing, for example, will be required to hire a bigger number of Saudis, while the construction sector doesn’t have this capability.”

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