JEDDAH, 25 August 2004 — A number of businessmen and company owners have criticized the new curbs on foreign manpower recruitment and said such rules would lead to the closure of many businesses and flight of capital.
They urged the government to simplify measures for the recruitment of manpower in order to encourage foreign and domestic investment and boost the economy.
However, they agreed that regulations were necessary to make sure that companies import only genuine manpower needs.
On Sunday, the Labor Ministry instructed labor and recruitment offices to consider “only one application from an employer at a time.” It said applications should be studied, bearing in mind the necessity to avoid any “exaggeration” of the need for foreign workers. Employers have to wait two months to file another request to recruit foreigners.
“The new instructions would affect businesses and reduce domestic investment. Moreover, it will force many investors to shift their businesses to other countries,” Okaz daily quoted the businessmen as saying.
Mashari Al-Muejib, a company owner, said the new regulation that allows a businessman to recruit foreign workers for only one of his enterprises at a time would negatively affect his other projects. “The ministry must consider the interests of businessmen and simplify recruitment procedures,” he added.
“Business will be the main victim,” Muejib said, adding that it would also result in the flight of valuable capital abroad.
Businessman Khaled Al-Amri expressed his unhappiness with the new restrictions saying they would lead to the closure of several businesses. He urged the ministry to show flexibility in this regard.
Ahmed Al-Ghamdi, owner of a small business, described the measure as “negative move” at a time when businessmen were awaiting steps to facilitate their activities. “The new decision will hamper business and the economic sector in general,” he stated.
Dr. Abdul Wahid Al-Humaid, deputy labor minister for planning and development, said the ministry enforced the new restrictions in its bid to cut unemployment rate among Saudis, estimated at 10 percent.
“Another objective is to prevent trade in labor visas,” he said, adding that some firms recruited more foreign workers than they actually required, causing economic and security problems. “We imposed the new regulations to protect national interests and streamline the labor market,” he explained.
Since the mid-1990s, the Kingdom has introduced a series of measures to create employment opportunities for nationals, particularly in the private sector. More than 640,000 Saudis have so far been employed in the sector.
When told about the problems posed by the new law, Humaid said businessmen who own more than one venture could submit another recruitment application for a second business after two months. “In the meantime, the ministry will check whether the first batch of workers he recruited were for a genuine business or not,” he added.
Humaid said his ministry wanted a balance between the interests of the private sector and the Saudi jobseekers.
“We imposed the new restrictions after finding that some small firms were recruiting people in the name of fake or non-existent businesses,” he said.
“There are certain people who own more than 50 companies on paper. These people live on the money they extort from workers under their sponsorship. They don’t add any value to the national economy,” he said.
The Kingdom issued 600,000 work visas last year and 120,000 during the first two months of 2004. According to Labor Minister Ghazi Al-Gosaibi, there are 8.8 million expatriates in the Kingdom, a figure equal to nearly 50 percent of the indigenous population. He said the government wants to cut this figure to 20 percent over the next eight years.
