RIYADH/DAMMAM, 6 March 2003 — The crackdown on defaulting gold shops continued yesterday in the wake of the government’s decision on Tuesday to Saudize the gold and jewelry sector.
More showrooms in Jeddah, Taif, Riyadh and Dammam were ordered closed when inspection teams discovered that they were not adhering to the new Saudization regulations.
The owners of several gold shops sent their expatriate staff home on open-ended vacation pending the return of normality to the precious metal trade in the Kingdom.
Authorities on Tuesday began enforcing a two-year-old decision to bar foreigners from working as salesmen and administrators in jewelry shops across the Kingdom. The measure seeks to create job opportunities for Saudis, 31.7 percent of whom are unemployed according to new statistics published by the Saudi Arabian Monetary Agency.
On Tuesday, authorities closed more than 50 percent of the gold shops in the Dira gold souk in Riyadh because they had failure to meet the Saudization target.
More shops were closed there yesterday, triggering panic among gold showrooms in other parts of the capital.
The panic had a knock-on effect on expatriate employees, who opted to hang around in the vague hope that the situation may change on the second day of the crackdown.
Currently, there are 6,000 gold shops in the Kingdom with a workforce of 20,000 employees.
Of these, 4,000 each are in Riyadh and Jeddah, and the rest of them are in the Eastern Province and other parts of the Kingdom.
However, according to officials, Saudis presently comprise only 10 percent of the workforce. The remaining jobs are viewed as providing important employment opportunities for Saudis.
Some 26 showrooms were shuttered yesterday in Taif as a result of the first phase of Saudization.
But in Dammam and Alkhobar, it would appear to be business as usual. Very few foreigners were seen working in any of the 20 gold showrooms visited yesterday by Arab News.
There were no reports of shops being closed in the Eastern Province for Saudization violations, although the authorities are on continuous vigil at the gold souks in Dammam and Alkhobar — the prime locations of jewelry shops in the twin cities.
Ghassan Al-Nemer, chairman of Ghassan Factory for Gold & Jewelry, told Arab news it was too early to assess the long-term impact of the new rules on gold trade.
A general survey of gold shops in Dammam and Alkhobar revealed that the owners were strictly adhering to the new regulation.
Most of the shop owners said that the process of complete Saudization started nearly a year ago when the government announced that all expatriates under the age of 40 would be banned from working in jewelry showrooms.
“The writing was on the wall and so we were prepared for the Saudization process for salespersons in our showrooms,” said the manager of Al-Mulhim jewelers in Alkhobar.
“We had long ago started to replace our expatriates with Saudis.”
The survey revealed that there are very few shops which are still employing expatriate staff, and even in those the expats are small in number.
Dr. Abdul Aziz Al-Hazza, secretary-general of the National Project for Training & Employment, said 54 jewelry shops in Jeddah would be punished for violating Saudization regulations, but 1,100 shops in the Makkah region have already fulfilled the conditions.
Hazza said the shops that fail to Saudize jobs would be denied government services at the Commerce Ministry and labor and recruitment offices. All such shops will eventually be shut down, he added.
Jameel Al-Farsy, chairman of the Gold Committee at the Jeddah Chamber of Commerce and Industry, told Al-Watan daily that gold and jewelry shops which have sent their Saudi staff for training would be given up to six months to implement full Saudization.
— Additional input by K. K. Jafarkhan in Jeddah
