DAMMAM, 30 April 2004 — The Labor Office here has once again stopped issuing labor visas for new companies and firms that employ 10 or fewer workers.
Angry businessmen from Dammam were in a state of confusion at the Labor Office when they were told of the decision. Arabic daily Al-Youm said that this is the second time in this year when the Labor Office has slapped a ban on labor visas for new and small companies.
Officials at the Labor Office declined to comment. An official, however, speaking on condition of anonymity, said that after the first ban in February this year, the department decided to give some more time to the businessmen concerned to cope with the problem. “We have given sufficient time and the ban is now in effect,” he said.
In February, the Labor Office in Dammam stopped issuing labor visas and also put a ban on transfer of visas from one sponsor to another. However, the transfer was open for technical professions. After a week-long debate in business circles, the Labor Department resumed issuing visas.
Small and medium business owners say that such decisions will ruin their business. They say that when they approach the Labor Office, it tells them to hire Saudis. “Either we don’t get Saudis and if we get some they demand such a high salary that it is financially not feasible,” said Ahmad Al-Dossary, a desperate businessman who came to the Labor Office to apply for a labor visa.
Fahd Al-Shammrany, owner of a maintenance and general services company in Alkhobar, said that the ban will kill small businesses. “There has to be a uniform policy. Why single out the small businesse?”
Raed Al-Qahtani, who started his new venture just a year ago after remaining unemployed for more than three years said that such measures will render hundreds of Saudis unemployed as their businesses will collapse. “Is this the way we are going to fight unemployment?” he asked.
Naeem Al-Saleh, owner of an electrical workshop, said that he will be left with no option but to close down his business as he does not have sufficient manpower .“I can’t afford a Saudi worker who will expect not less than SR2,000 whereas I pay an Indian or Bangladeshi not more than SR700.”
Al-Dossary said that the authorities should adopt some other strategy to curb illegal visa trade. “Why should we be the victims of unscrupulous elements?” he asked.
The Labor Department says that the ban is to curb the illegal trade in visas. Many Saudis indulge in visa trading. They set up a fictitious company and apply for visas in that company’s name. Once they procure the visa they sell it to Third World nationals at a premium price.
There are generally two arrangements between the seller and the buyer. In the first arrangement, the buyer upon his arrival continues to pay sponsorship money every month which varies between SR200 and SR400 per month. In the other arrangement, the buyer upon his arrival takes a release from the sponsor and gets his visa transferred to the sponsor who provides him a job. Many expatriates who indulge in cover-up business usually go for the first arrangement of sponsorship fee every month.
