DAMMAM, 7 March 2004 — While going all out to enforce Saudization of the gold and travel industry, the authorities are losing their grip on previously Saudized sectors like the vegetable market.
A couple of years ago, the authorities decided to achieve 100 percent Saudization in the vegetable trade in a two-tier program. The first stage of the regulation required expatriate managers to be replaced, while in the second phase, all workers and salesmen were also to be replaced by Saudis.
The main reason for such drastic action was said to be the growing number of dummy businesses in the sector — shops that were only nominally owned by a Saudi, who would collect a fee to let an expatriate run the business. Many Asians who had started working as menial workers in the vegetable markets of Dammam and Alkhobar ended up controlling these businesses.
A survey by the Labor Office revealed that a sizable portion of businesses in the year 2000 was in the hands of expatriates. “This was in contravention to the regulations stipulated by the country,” commented a Labor Office official.
The 100 percent Saudization rule worked for a few weeks as authorities continued to monitor the market and conduct surprise raids. But when the inspections eased off after some weeks, the expatriates came back. Now once again foreigners, especially Bangladeshis, make up the majority of workers and own many of the businesses.
The authorities once again virtually turn a blind eye. There are no raids, no action, no punishment.
The government also stipulated that all small stores should have Saudi staff, owner and manager. Store owners opposed the move saying if they hired Saudi workers their overheads would drastically increase as Saudi workers usually ask for double what foreign workers get. Again, there is no enforcement.
The Transport Ministry followed suit and attempted to Saudize all taxi drivers. It soon realized that this was not practical and as a result has discontinued its implementation.
Many in the private sector say they support Saudization but it should happen in a gradual, realistic manner.
Abdul Aziz Kanoo of the Kanoo Group, whose travel agencies in Riyadh were recently the subject of a draconian effort to enforce Saudization, is one of them.
“While I don’t have any objection” to the 11 percent Saudization of the trade, “it is extremely difficult to make a seamless transition to Saudization in a very short time. A sensible Saudization policy is one that allows a degree of flexibility in order to achieve the transition in a cost-effective and efficient manner,” he said.
Khaled Al-Zamil, former chairman of the Eastern Province Chamber of Commerce and Industry, does not agree with 100 percent Saudization. “The training and expertise of expats are necessary in the early stages of the development of a company,” he said.
