The experts say the current policy based on the replacement is not correct but, rather, should be based on the creation of jobs for Saudis and be expanded to yield more jobs for local manpower.

Economic adviser Fahad Juma'a said the Nitaqat program did not serve the small-scale enterprises but, rather, was harmful to so many enterprises that were forced to exit the market as a result of banning recruitment of foreign workforce and failure to employ Saudis.

The number of SMEs working in Saudi market is reportedly exceeding 550,000 firms, employing more than 4.5 million whose investments are worth SR250 billion accommodating 82 percent of the total workforce in the Kingdom.

Juma'a said owners of the SMEs were forced to go to the stock market after closure of their firms that, he said, will undermine one of key pillars of Saudi economy and hamper diversification of income sources for national economy.

He said some of local regulations were not working harmoniously following the announcement of the Ministry of Labor and the Ministry of Finance to support the SMEs and, at the same time, recruitment of foreign workforce was suspended due to financial incapacity of these SMEs. However, a number of big companies are providing "untrue" employment opportunities as evidenced by the data released by the General Organization for Social Insurance (GOSI).

SMEs sector is poised to face a difficult year in 2012 due to Nitaqat program and funding problems, the expert warned.

On the other hand, Academician and Economist Salim Bajajah said absence of a unified reference represented a missing link to the SMEs work, where more than 15 governmental departments are entrusted to give licenses to the SME sector.

He stressed the need for speedy establishment of the recently declared authority on SMEs to give  all financial and technical support to the SMEs that, he said, is the key pillar for Saudi economy.