DAMMAM, 2 March 2004 — The government’s decision to stop transfer of sponsorship for all expatriates except for those technically qualified has jolted the Kingdom’s labor market. Small businesses are complaining of huge financial losses due to what they must spend in order to bring in workers from abroad.
Labor Minister Dr. Ali Al-Namlah announced the decision at the third annual meeting of the directors of the Kingdom’s labor offices. He explained that the decision had been made in order to prevent misuse of the sponsorship law which allows sponsors to make money at the expense of unemployed Saudi citizens.
Under the new regulations, sponsorship of only foreign workers needed in the private sector will be transferred. Small businesses say this condition will give ample opportunity for big companies to use transfers while smaller ones will have to incur the expense of recruiting abroad.
But many businesses and individuals have welcomed the new decision, saying that it will put a stop to trading in visas.
In the Eastern Province alone, there are dozens of companies which exist only on paper. On the basis of their being registered and licensed, they apply for visas and then sell them. “The lure of money brings in hundreds of Asians who, once they are here, face the reality that there are not so many jobs,” said the general manager of a recruiting agency in Dammam.
He said that it was time for the Kingdom to do away with the sponsorship system and develop a new strategy for monitoring the labor market. “It would be to everyone’s benefit — foreign workers, the government, citizens and the private sector — if the entire sponsorship system were abolished.”
