We all know that small- and medium-sized businesses constitute the backbone of our economy and will continue to shape development in the country. If we can develop these businesses they will be the most effective defense against unemployment.
Ministry of Labor statistics put the number of Saudi workers employed in businesses with fewer than 20 workers at 45,652, which is 2.8 percent of the overall number of workers in these businesses. On the other hand, the expatriates working in these businesses number 1.65 million, or 34 percent of the total expatriate work force. Assuming that the number of foreign workers in the Kingdom is around 4.8 million, it is obvious that fighting unemployment should start from Saudizing jobs in small and medium businesses. This is not impossible to accomplish.
It is unacceptable to see a young Saudi who graduated from high school not knowing how to issue a ticket and another incapable of fixing a sandwich. Some basic training is needed to make Saudis take up jobs. It is good that public human resources development bodies such as GOTEVOT and private sector organizations are showing increasing interest in providing training for small businesses.
One good news is that Finance Minister Ibrahim Al-Assaf has given the go-ahead to a scheme aimed at encouraging small and medium ventures by providing guarantees to lenders. This is something I have long been calling for.
The program aims at encouraging local banks to fund SMEs by providing them with financial guarantees. The Saudi Industrial Development Fund (SIDF) will manage the scheme, for which SR200 million has been earmarked, half of which was paid by the government and the rest by local banks. The Kingdom’s economic reform program seeks to boost the contribution of the private sector to the national economy.
Another commendable move in this direction is that the Saudi Basic Industries Corporation (SABIC) is considering setting up a big company for plastic industries with local manufacturers. The proposed budget for the new company would range from SR450 million to SR1.5 billion. The majority of plastic producers are small businesses who continue to sustain heavy losses due to market fluctuations. The merger of these firms with SABIC to form a large company will strengthen their position, giving them a sense of security and eventually helping reduce the number of foreign workers now employed in these firms.
