We hoped that the gradual replacement of foreign workers with Saudis would have progressed greatly by now, but nothing of the sort has happened. In many cases we have replaced the word “Saudization” with “the nationalization of jobs.” Due to the many articles on the subject I have gained a lot of experience on the issue.

But before I say what I have on the topic, let us read the latest statement by the labor minister on the process of Saudization. He has classified private establishments into three categories, giving them different colors according to the level of Saudization they have achieved.

The establishment that has achieved Saudization is assigned green. The other two colors are for noncompliance to the assigned quota (which depends on job classification) — yellow and red, respectively.

Under this plan, companies in the “green” may recruit workers from the other two categories of companies without those workers seeking no-objection certificates from their “yellow” or “red” employers. “Red” employers are prohibited from renewing iqamas of their foreign workers. There is no harm in experimenting with this system, but I have my doubts about its success.

According to my experience, giant companies such as Sabic, Aramco and the commercial banks have achieved high rates of Saudization simply because they pay attractive salaries and subsequently attract attentive Saudi workers. Small establishments, on the other hand, are not able to pay salaries that a Saudi can live on, therefore they employ legal foreign workers, or recruit from the pool of an estimated two million illegal laborers.

Furthermore, many of these companies are basically owned and operated by foreign residents, even if Saudis are the owners and operators on paper, and they tend to hire their own compatriots. It will be futile getting these small “red” or “yellow” companies to comply.

The only solution, a costly one, is for the Human Resources Development Fund to subsidize the salaries of Saudi workers at these smaller establishments.