The International Monetary Fund has warned that Saudi Arabia has to boost its private sector to create sufficient jobs to absorb its fast-growing young population. Taking figures for the Gulf as a whole, the world financial monitor has concluded that GCC countries will need to create 600,000 private sector jobs in the next five years, merely to maintain the percentage of national working for private enterprise. Moreover, warns the Washington-based institution, even this rate of job creation would at best, take up only a half of all the young people entering the job market.

Successive economic studies of the Kingdom, not least from the IMF, have gently deplored the level of state or parastatal hirings. Though there are leading government organizations which make a point of syphoning up the most talented young Saudis and giving them challenging and fulfilling employment, there are too many people employed, or perhaps more accurately, under-employed in government service of one sort or another. The argument that this does not really matter, because for better or worse, these individuals are earning incomes which are fed into the Saudi economy, is fallacious in one important respect.

Within every ministry and government organization there are young people who are anxious to prove what they are worth. They hope to move on to positions of greater power, where they hope that they can exert influence and have a real and beneficial impact on the country. Unfortunately, with the best will in the world, if such inspired young men find themselves surrounded by contemporaries who are only interested in their pay checks, rather than doing their bureaucratic job to the best of their abilities, then a clear danger arises. Not only will their particular departments be run inefficiently, there will also be a major de-motivational impetus. This could prompt able individuals to simply give up and join the general drift. When such a circumstance arises, it represents a loss to the organization concerned, who presumably hired that person for his training and expertise. It also represents a greater loss to the Kingdom, which will have invested hundreds of thousands of riyals in the education and development of that person. And perhaps most sadly, it is a loss to the individual himself, a loss in terms of professional pride and indeed of self-esteem.

Bureaucracies are as notoriously bad at finding ways to reward success as they are at punishing failure. It is by no means a uniquely Saudi failing. Nevertheless, with strong government revenues and something approaching an addiction to setting up new quasi-statal bodies of all kinds, there are ample opportunities to create work in the government sector and at present the cash flow to pay for them. Only a few premier government departments do not blanch at the prospect of having their structure audited, to check that they are actually giving value for money.

How very different it is in the private sector, where the IMF reckons “real,” productive jobs have to be created in their hundreds of thousands in the next few years. For a start, it is only in relatively rare cases where a business sees a commercial opportunity and staffs up rapidly to try and grab it, that employment can increase at such a rapid rate.

Most businessmen are cautious about new hirings. The concern of successful businessmen is the control of costs. There are now bottomless government wells from which they can draw just as much money as they need. Even allowing for all the grant opportunities and subsidies to encourage the employment of Saudis, a good entrepreneur will never take his or her eye off the bottom line. Though some firms may seem a trifle over-manned, often as a result of a desire to give jobs to relatives, by and large, the private sector is streets ahead of government organisations in terms of efficiency, hours worked and productivity.

Therefore those hundreds of thousands of jobs will not be conjured up by adding a few desks and chairs to an office. They will only be brought into being if the level of fresh economic activity in the Kingdom is such that firms simply have to start hiring, if they are going to seize and profit from fresh opportunities.

Though marketing, in all its manifestations, can help create new markets, the government has a part to play in creating the economic environment in which business can flourish and rapidly expand. The levers are largely fiscal and should not just be aimed at businesses but at the consumers. Only by the fostering of vibrant economic activity within the Kingdom, is there any chance that the jobs the IMF tells us are so essential, will in fact be created.