RIYADH, 8 January — The Manpower Development Fund has approved two schemes that will help create employment for hundreds of thousands of Saudi youths during a meeting of the board of directors of the fund chaired by Minister of Labor and Social Affairs Ali Al-Namlah.

The director general of the fund, Muhammad Al-Sahlawi, said the fund will subsidize the salaries of well-qualified Saudis who join private companies directly after finishing their training.

The fund will match the amount received by each employee as a salary as well as their allowances — or a minimum of SR2,000, if that figure is higher — for each Saudi recruited directly by private firms. Saudis who have completed a training course from approved centers and have not yet been employed will be eligible for the scheme.

The second scheme approved by the council is on-the-job training for young Saudis. The scheme encourages youths to join a company which will train them and during this period the fund will cover 75 percent of their salaries and allowances.

During the training, which should not last more than two years, the fund will pay a maximum of SR1,500 a month to each trainee. The companies themselves will meet the expense of the training.

After the two-year training, the fund will pay 50 percent of the salary and allowances for a period of one more year. However, the payment will not exceed SR2,000 per month.

The employer and the trainee should sign a contract according to which the company will consider the trainee as a regular employee from the first day of his training.

The fund was formed after being approved by the Council of Ministers at a meeting in July 2000 that aimed to come up with practical solutions to the problems encountered in the drive for Saudization in the private sector.

Interior Minister Prince Naif, chairman of the Manpower Council, heads the fund’s board of directors. Representatives from the ministries of finance and national economy, planning, industry and electricity and commerce, as well as the General Organization for Technical Education and Vocational Training, Institute of Public Administration and the Manpower Council’s Secretariat, constitute the fund’s members.

The creation of the fund is another step toward the development of human resources and ensuring an increasing supply of qualified manpower through training to meet the market demand.

The fund will have its own investments so as to generate part of the money needed for its operations. Some of the money will come from the SR150 additional fee introduced by the government for iqamas (residence permits) for foreign workers.

Unemployment remains one of the most important challenges for the Saudi economy. There are presently 360,000 jobless Saudi youths, according to the Manpower Council.

The government aims to create employment for an additional 817,300 Saudis over the next five years through a mixture of Saudization and the creation of new jobs. But the economy is falling far short of the target and has been creating only 25,000 extra jobs a year for Saudis, or one for every four Saudi males entering the job market annually, according to a recent study by the Saudi American Bank.

Suggestions ranged from replacing foreign labor in certain sectors — for instance the travel industry, where 90 percent of workers are expatriates — to direct state intervention to replace expatriates in all sectors with Saudi workers.