Nowadays, There are four million Saudi nationals in the workforce — 2.5 million working in the government sector and 1.5 in the private sector.

The unemployed are estimated to be less than a million according to the number of applicants for jobless claims under the Hafiz program, taking the total number of Saudi labor force to around 5 million.

During the next two decades, it is expected that this number will increase to eight million, and in three decades it will reach 10 million.

The economy’s inability to generate jobs is due to a number factors including excessive reliance on expatriates, limited growth of the private sector, and the upward adjustments to government jobs pay, in addition to its saturation with employees.

The private sector employs around 35 percent of the Saudi labor force, which represents 10 percent only of total jobs available.

The only area able to accommodate the growing number of Saudi entrants to the labor market is the private sector.

New employment opportunities in the government sector cannot exceed another one million new jobs, so the focus must be on how to rehabilitate the private sector in various ways to enable it to create more jobs.

With regard to the first factor, the work is in full swing to replace expatriates with Saudis and limit the number of foreign workers.

This goal cannot be reached overnight and needs a great deal of assistance from various institutions, especially the educational system.

The Saudi economy is a free and open economy, which has been emphasized even further with the rise of globalization.

That is why Saudi economy needs to retain its relative strengths including its dependence on cheap labor.

Additionally, the upward adjustment of pay of government jobs created more pressure on the private sector, to surging the cost of Saudi employee compared to that of expatriate.

As for young Saudis, the rehabilitation and training by itself failed, if not deepened, due to the problem of continuous “flying” from one job to another.

The solution lies in expanding the economic base dramatically using all capital recourses available, so we get to the point of a tie, or even turn the equation to a point where we need to increase the expatriate work force.

This required huge expansion must be driven by direct government investment with the private sector involvement, and financed by the excess liquidity of citizens and banks in addition to the government’s excess reserves invested abroad.

Moreover, the government should pursue an incentivizing policy with the private sector when it comes to the employment of Saudis in the private sector, subsidizing salaries to lower the cost of employment when compared to expatriate workers. In this way, the government will reshape the private sector, pushing it to play its natural role of creating jobs.