Saudi Arabia’s unemployment rate falls to 5.1% in first quarter

Saudi Arabia’s unemployment rate falls to 5.1% in first quarter
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Job creation is a vital part of the ambitious economic agenda spearheaded by Crown prince Mohammed bin Salman to cut the Kingdom’s reliance on oil. (SPA)
Saudi Arabia’s unemployment rate falls to 5.1% in first quarter
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The construction industry is expected to create many job opportunities in Saudi Arabia (Shutterstock)
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Updated 29 June 2023
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Saudi Arabia’s unemployment rate falls to 5.1% in first quarter

Saudi Arabia’s unemployment rate falls to 5.1% in first quarter
  • Vision 2030 blueprint seeks to reduce the overall unemployment rate from 11.6 % in 2016 to 7% in 2030

RIYADH: Saudi Arabia’s jobs targets outlined in Vision 2023 have borne results, with its overall unemployment rate falling 0.9 percentage points to 5.1 percent in the first quarter of 2023 compared to the same period a year ago, official data showed. 

According to the latest report by the General Authority for Statistics, the labor force participation of Saudis increased annually by 2.3 percentage points in the first quarter. The employment-to-population ratio also increased by 2.9 percentage points. 

The Vision 2030 blueprint sought to reduce the overall unemployment rate from 11.6 percent in 2016 to 7 percent in 2030. 

Job creation, especially for Saudi nationals — over 60 percent of whom are under 35— is a vital part of the ambitious economic agenda spearheaded by Crown Prince Mohammed bin Salman to cut the Kingdom’s reliance on oil. 

According to the GASTAT report, workforce participation among female citizens is also rising. 

Labor force participation among Saudi females rose by 2.4 percentage points year on year in the first quarter of 2023 to 36 percent, remaining unchanged compared to the last quarter of 2022. 

However, the unemployment rate among Saudi males increased to 4.6 percent, up 0.4 percentage points from last quarter and down to 0.5 percentage points compared to the same period a year ago. 

The labor force participation rate and the employment-to-population ratio of Saudi males decreased respectively by 0.2 percentage points and 0.5 percentage points to 68.3 percent and 65.2 percent. 

The GASTAT report noted that the employment rate among Saudis declined by 1.6 percentage points in the first quarter of 2023 compared to the same period a year ago. 

The overall unemployment rate in the Kingdom, including Saudis and non-Saudis, increased by 0.3 percentage points in the first quarter of 2023 compared to the year-ago period. 

The Kingdom’s unemployment rate had fallen to an all-time low of 8 percent in the fourth quarter of 2022.  

Compared to the fourth quarter of 2022, the unemployment rate of Saudis rose by 0.5 percentage points to 8.5 percent in the first quarter of 2023, while the labor force participation of Saudis decreased to 52.4 percent during the same period. 

The non-oil private sector expansion is a crucial pillar of Vision 2030 aimed at diversifying the Kingdom’s economy. 

The report further revealed that 94.1 percent of unemployed Saudis would accept jobs in the private sector. Historically, the public sector has been the principal employer of Saudi citizens. 

The report added that 55.5 percent of unemployed Saudi females and 45 percent of unemployed Saudi males would accept a maximum commuting time to work of one hour. 

Moreover, 74.7 percent of unemployed Saudi females and 88.6 percent of unemployed Saudi males indicated they would accept work for eight hours or more per day. 

In an interview with Arab News earlier in June, Grace Najjar, Project Management Institute’s regional managing director for the Middle East and North Africa region, said that job creation in the Kingdom would accelerate further in the coming months, primarily due to the momentum at which giga-projects are getting developed in the Kingdom. 

According to Najjar, the construction industry is expected to create many job opportunities in Saudi Arabia, and the Kingdom is expected to witness high demand for skilled professionals, including project managers, engineers, architects, and skilled labor.   

“Currently, over 5,200 projects across Saudi Arabia with a combined worth of $819 billion are underway, representing 35 percent of all active GCC (Gulf Cooperation Council) project values,” said Najjar.  

With such a vast number of projects, there will be a significant demand for skilled professionals in the construction industry, including project managers, engineers, architects and skilled labor. 

She added: “This demand is expected to continue to rise in the coming years, especially as Saudi Arabia and the entire GCC are on a path of economic diversification.” 

Najjar further noted that this boom in the construction industry would provide ample opportunities for Saudi nationals to explore newer options. 

“In recent years, there has been a push to develop local talent in Saudi Arabia, including in the construction sector. The government has implemented several initiatives to develop skills and create employment opportunities for Saudis, including the National Transformation Program,” she added. 

The latest Future Jobs report by the World Economic Forum indicated that the fastest-growing job roles in Saudi Arabia would be driven by technology and digitization. 

The report added that Saudi Arabia is expected to witness a sharp rise in demand for artificial intelligence and machine learning specialists as most businesses are undergoing digital transformation.


Saudi Arabia to reveal new innovative tourism strategy in 2024: top official

Saudi Arabia to reveal new innovative tourism strategy in 2024: top official
Updated 21 May 2024
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Saudi Arabia to reveal new innovative tourism strategy in 2024: top official

Saudi Arabia to reveal new innovative tourism strategy in 2024: top official

RIYADH: Saudi Arabia is set to unveil a new tourism strategy this year utilizing artificial intelligence and seamless technology, according to a top official.

Speaking to Arab News in an interview on the sidelines of the Future Aviation Forum 2024, Gloria Guevara Manzo, chief special adviser at the Ministry of Tourism, noted that the plan seeks to maximize the Kingdom’s assets including culture, history, heritage and hospitality.

“Right now, the ministry, under the leadership of his excellency, is developing the new strategy, and that new strategy is going to include several new things, such as the use of AI, for instance, seamless and many other technologies that are important for growth,” Manzo said.

She added: “(The) strategy, hopefully is going to be released this year and is going to be shared with the world. The strategy that we have right now was developed in 2019. We accomplished the milestone of the 100 million tourists, domestic and international, seven years ahead (of schedule).”

Manzo also discussed the importance of sustainability so people are still “enjoying” the world today while ensuring resources are preserved for future use

This concept involves multiple facets, including economic, environmental, and social considerations.

“For 30 years, we have been measuring and that’s why we know that 10 percent of the global gross domestic product before the pandemic (came from travel and tourism), and we’re going to reach that number this year again,” Manzo said.

She added that before the COVID-19 outbreak there were 330 million jobs in the industry, adding: “This year, we’re hoping to break a record with 348 million. One out of 10 jobs depends on this sector, so the economic aspect is very clear. The social aspect also is quite interesting — 54 percent women, 30 percent youth.”

Manzo emphasized the positive social impacts of travel and tourism, such as poverty reduction and the prevention of illegal migration by providing local job opportunities.

Despite these benefits, there had been a lack of clear measurement regarding the sustainability of this industry.

However, a significant study sponsored by Saudi Arabia, particularly by Minister of Tourism Ahmed Al-Khateeb and the ministry, addressed this gap.

Released last year, this provided comprehensive insights into the environmental impact of travel and tourism, revealing that 8.1 percent of greenhouse emissions are attributable to this sector.

“Now that we know that, then we can go industry by industry to understand what is the impact, and from that 8 percent, 47 percent is due to transportation and it could be aviation, it can be road, it can be cruising all the different aspects,” she said.

Manzo added: “Now, the reality is that aviation counts between 1.5 and 2 percent of the global emissions. But as I said in the panel, we cannot see this in an isolated approach. We need to see this from a holistic point of view. We need to understand what are the quick wins.”

Therefore, she noted that this does not mean stopping flying is the solution, as it has “very severe consequences.”

She said: “Millions of people can lose their jobs. We saw that during the pandemic, travel provides food on the table to millions of people from around the world. That’s a factor that we have to consider.” 

Mazo stated that the right approach should be finding ways to travel in a more sustainable way, as she referred to a statement by Saudi Energy Minister Prince Abdulaziz bin Salman ,when he said that the Kingdom is leading this transition.

Furthermore, the adviser stressed the importance of the Future Aviation Forum as it reflects the significance of connectivity within and outside the Kingdom as emphasized by Al-Khateeb on the first day.

“We need to increase the connectivity within the Kingdom, to the Kingdom and of course outside in order to increase the trade and do business and have more exports, more imports, and all of the above,” she stated.

Manzo continued: “In that regard it is very important to continue with the partnerships, not only at the destination level, but also at the corporate level and with the different entities, with the government. Without transport, we don’t have tourism, and tourism is very important for transport also to grow.”

 

 

 


Saudi Arabia closes May sukuk issuance at $860m 

Saudi Arabia closes May sukuk issuance at $860m 
Updated 21 May 2024
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Saudi Arabia closes May sukuk issuance at $860m 

Saudi Arabia closes May sukuk issuance at $860m 

RIYADH: Saudi Arabia has completed its riyal-denominated sukuk issuance for May at SR3.23 billion ($860 million), according to the National Debt Management Center. 

In April, Saudi Arabia issued sukuk amounting to SR7.39 billion, while it was SR4.44 billion and SR7.87 billion in March and February respectively. 

NDMC revealed that the Shariah-compliant debt product for May was divided into two tranches.

The first tranche valued at SR71 million is set to mature in 2029, while the second one amounting to SR3.16 billion is due in 2036. 

In March 2024, NDMC concluded its second government sukuk savings round, with a total volume of requests reaching SR959 million, allocated to 37,000 applicants.

NDMC, at that time, said that the financial product, also known as Sah, offers a return of 5.64 percent, with a maturity date in March 2025. 

In April, a report released by S&P Global said that sukuk issuance globally is expected to hover between the $160 billion to $170 billion mark in 2024, representing a steady momentum from $168.4 billion in 2023 and $179.4 billion in 2022. 

According to the US-based firm, the issuance of this Shariah-compliant debt product began on a strong footing in 2024, with Saudi Arabia becoming a key contributor to the performance. 

The credit rating agency also noted that the sukuk market will continue to grow in the near term driven by financing needs in core Islamic finance countries, along with the ongoing economic transformation programs which are currently underway in nations like Saudi Arabia. 

“The market has started 2024 on a strong footing, with total issuance reaching $46.8 billion at March 31, 2024, compared with $38.2 billion at March 31, 2023. Saudi Arabia was a key contributor to this performance,” said S&P Global. 

It added: “The drop in issuance volumes in 2023, which mainly resulted from tighter liquidity conditions in Saudi Arabia’s banking system and Indonesia’s lower fiscal deficit, was somewhat compensated by an increase in foreign currency-denominated sukuk issuance.” 

In April, another report released by Fitch Ratings also echoed similar views and noted that global sukuk issuance is expected to continue growing in the coming months of this year. 

Fitch noted that economic diversification efforts and the rapid development of the debt capital market in the Gulf Cooperation Council region will propel the growth of the sukuk market in the coming months. 


SAFE unveils expansion plans to transform aviation security: CEO

SAFE unveils expansion plans to transform aviation security: CEO
Updated 21 May 2024
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SAFE unveils expansion plans to transform aviation security: CEO

SAFE unveils expansion plans to transform aviation security: CEO

RIYADH: Saudi Arabia’s aviation sector is set for substantial safety and security enhancements as the National Security Services Co. prepares to embark on an ambitious expansion plan, its CEO told Arab News.

Turki Matooq Al-Thonayan explained how the company, also known as SAFE, already has operations spanning multiple countries and a workforce exceeding 10,000 employees.

The comments came on the sidelines of the Future Aviation Forum, which saw over 5,000 industry experts and leaders from more than 120 countries gather in Riyadh to discuss issues facing the sector.

In his interview with Arab News, Al-Thonayan emphasized the strategic integration of SAFE’s plans with the aviation sector, aligning with broader transportation goals, saying: “The plan of expansion is totally integrated with aviation. Why we are here is because of transportation, talking about aviation, land, and maritime.”

Al-Thonayan went on explaining that the company is also targeting Saudi Arabia’s giga-projects like NEOM, the Red Sea and Qiddiya.

“We are targeting the mass event in VIP protection, industrial facilities. And moreover, we are trying to support the government and their initiative to privatize the security services,” he added.

SAFE was launched in 2021 and is totally owned by the Public Investment Fund.

According to the CEO, the company was initially focused on security services but has since added firefighting, safety, and critical facility management to its remit.

“We are working in more than 37 governments within the Kingdom, we are working in Bahrain and we launched our office in the UAE, and we are planning for more expansion in the future,” Al-Thonayan said.

The focus on customer experience is at the heart of SAFE’s operational ethos. “Because if we are providing the services like the firefighting, the facility management, the security, this affects the passengers and the customers and the airports,” he said.

“The engagement between the passengers and the services is going to be for security and verification. Our goal is how to make this experience excellent, how we address the goal of the passengers,” Al-Thonayan explained.

Understanding the needs of passengers and ensuring their swift and efficient movement through airports is a priority for SAFE. “Sometimes their goal is to move as fast as possible to their businesses, to their collaboration within the Kingdom. So we would like to enhance the process. We would like to improve the efficiency of the services within the airport,” the top official noted.

“Our goal is to be the ultimate security, safety, firefighting partner,” he emphasized.

Al-Thonayan outlined the firm’s key objectives, which revolve around enhancing service efficiency and generating revenue, and said: “Our success is to be a reliable enabler. So how we can enable the ecosystem of aviation to move faster toward their targets, how we can make them do more.”

He highlighted that SAFE aims to offer comprehensive solutions that streamline services and ensure reliability, saying: “We are planning to offer and make a commercial offering for a total solution. So instead of having scattered services among these suppliers, we will have one quality service provider that is reliable from the ecosystem, from the government, from the client, from the service provider.”

The concept of integration is central to the company’s approach, as Al-Thonayan noted.

“Being in Bahrain or being in the UAE, or being in Saudi Arabia, the added value here is to have an integrated service. Door to door, which enables the network to do the business and do smooth and efficient logistics where it contributes and operation excellence, and cost efficiency,” the CEO explained.

Al-Thonayan stressed the importance of global operations and the role SAFE plays in facilitating seamless travel experiences. “Our target is to make smooth, excellent, and efficient operations with our destination all over the globe. Today we are talking about the globe coming to Saudi Arabia. How can I enhance this process to make their life easy? How we can contribute and the quality of the lifestyle. This is our role,” he said.

Highlighting recent partnerships, Al-Thonayan mentioned significant agreements aimed at enhancing the aviation network within the Kingdom.

“The ecosystem in aviation consists of airlines, logistics, and airports. So we have signed (an MoU) today with Dammam Airport Co., DACO and Cluster 2, which is another 22 airports,” he added.

These collaborations are going to enhance the network within the Kingdom, according to the CEO. “Our role here is to provide security solutions for our safety solutions, and how can we succeed to transform the model and the business operation from scattered business to a total solution business,” he added.

Al-Thonayan underscored the significance of accredited training and technology integration to enhance services. By shifting security’s role from a cost center to a value generator, SAFE aims to cultivate data networks for expanded services. This vision was demonstrated through recent agreements that are viewed as a starting point for further success and collaboration.

 Al-Thonayan reiterated SAFE’s commitment to setting high standards in the aviation sector and ensuring an exceptional customer experience.

“We would like to say to our colleagues in the sector, we are the front or the national front. Passengers, travelers, airport companies, airline companies, will see first our employees, the security, the customer service, and they will make the impression,” he said,

“We are obligated and committed to deliver the best customer experience for the globe,” the CEO concluded.

With these comprehensive strategies and partnerships, SAFE is poised to play a pivotal role in the future of aviation security and customer experience, both within the Kingdom and beyond.


PIF-owned helicopter firm eyes global expansion and IPO, says CEO

PIF-owned helicopter firm eyes global expansion and IPO, says CEO
Updated 21 May 2024
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PIF-owned helicopter firm eyes global expansion and IPO, says CEO

PIF-owned helicopter firm eyes global expansion and IPO, says CEO

RIYADH: Saudi Arabia’s Public Investment Fund-owned commercial chopper operator, The Helicopter Co., is eyeing a global footprint and an initial public offering, revealed its CEO. 

Speaking to Arab News on the second day of the Future Aviation Forum in Riyadh, Arnaud Martinez explained that once the company solidifies its position in the Saudi market, it will seek avenues to expand and grow its business. 

This aligns with the Saudi sovereign fund-owned firm’s goal to generate long-term commercial returns and activate new sectors in the Kingdom that support the realization of Vision 2030. 

Martinez said: “Now, the market, the aim is not only KSA, right? There is something else than just KSA. We couldn’t go over and beyond the borders until we are securing our own market.” 

He added: “But once you secure the market, it’s a healthy, again, move to go and see what’s going on in other countries, other continents, and other bids. That’s what PIF does; we invest, we create something that the Kingdom needs, we grow the business, then you go on, you grow, you go over the borders, and then you go on an IPO journey.” 

During the interview, Martinez also shed light on how the Kingdom’s aviation market needs to be flexible and responsive to meet ongoing demand. 

“The agility, the reactivity is needed in the Saudi market. I cannot wait and wait to have a contract, wait to have a request from the client and say: wait for two years, wait for three years, I will bring you the assets, I will bring you the helicopter; we cannot do that,” the CEO stressed. 

“I need to plan and be agile. We have done that in the past five years. We only bring the aircraft that the Kingdom needs. I don’t buy aircraft because I love buying aircraft; we buy aircraft because we need aircraft,” he further emphasized. 

Moving on to the role of THC, Martinez underlined that the firm’s role is very different from five years ago. 

“The role five years ago was mainly to serve as an air mobility solution. The giga-projects, the famous giga-projects that we are talking about — rightly so, because they are fantastic projects: Red Sea Global, Amaala, NEOM, Qiddiya — all these projects were the core of the THC setup five years ago,” the CEO affirmed. 

“Now the scope is way different five years later. One of our key segments, really close to my heart, is how we impact the lives of the people by saving lives. So, we have a massive segment, with our partner, Saudi Red Crescent, and we are working really hard to provide emergency services to the Saudi population,” he underscored. 

Martinez also added, “The next five years will be as exciting as the past five years, maybe more.” 

The CEO continued to stress that in the upcoming years, THC needs to continue growing its medical services support, as well as its contribution to hospitality and tourism. 

He also added in that regard, “It’s time to see in the following few years what is abroad the border, right, overseas. You cannot be only a national champion; you want to be a regional leader in the worldwide plane. That’s the next wave, next step.” 

To support the firm in its plans, THC also seeks to invest in new technology, Martinez disclosed during the interview. 

With regards to having fully electric helicopters, the CEO said: “The platform is ready. The helicopter platform is not the issue. It’s the readiness of the ecosystem, the regulation, the infrastructure, the airspace, so many key elements around that. The platform, the helicopter is the easy piece.” 

Speaking on the Future Aviation Forum, Martinez noted: “The airshows are always a good opportunity for me to sit with people who have 50, 60, 70 years legacy, which I don’t have.” 

“We are 100 percent owned by PIF and part of that portfolio of aviation. So, this forum is always a good opportunity for us to meet with the ecosystem. We are not alone and growing alone. We are growing with many support services,” Martinez added. 

More than 5,000 global aviation industry experts, international airline leaders, and airport executives are expected to convene at the Future Aviation Forum. 

Organized by the General Authority of Civil Aviation, the three-day event will feature discussions on issues related to the global flight sector, air transport, and environmental sustainability in civil aviation, as well as talks on enabling advanced air transport and enhancing global connectivity. 

The event also aligns with the Kingdom’s ambition to become a leader in the sector within a decade, including securing $100 billion worth of investments by 2030. 


Saudi Arabia sets ambitious targets to strengthen aviation strategy, senior official says

Saudi Arabia sets ambitious targets to strengthen aviation strategy, senior official says
Updated 21 May 2024
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Saudi Arabia sets ambitious targets to strengthen aviation strategy, senior official says

Saudi Arabia sets ambitious targets to strengthen aviation strategy, senior official says

RIYADH: Increasing passenger numbers and expanding flight routes are among the key objectives of Saudi Arabia’s aviation strategy, according to a senior official.

In an interview with Arab News on the sidelines of the Future Aviation Forum held in Riyadh, Vice President of the General Authority of Civil Aviation for Quality and Traveler Experience, Abdulaziz Al-Dahmash, said the Kingdom has set “very ambitious targets” in this sector.

These include tripling the number of passengers compared to 2019, handling 4.5 million tonnes of cargo, and establishing more than 250 direct destinations from the Kingdom’s airports to global locations.

“Those key targets need enablers, and one of the key pillars is our passenger experience, and we always say that the passenger comes first, so from that perspective, we started different programs from a regulator perspective,” Al-Dahmash told Arab News.

He added: “We said, total quality evaluation or air total quality evaluation program. This program focuses on the passenger experience across all the touchpoints at the airport, from entrance to boarding.”

Al-Dahmash noted that Saudi Arabia’s aviation strategy includes four sub-programs aimed at enhancing passenger experience to meet 2030 targets.

The first focuses on reducing waiting times through operational standards, while the second emphasizes traveler feedback and satisfaction. 

The third ensures infrastructure readiness by inspecting over 1,300 items annually per terminal.

The fourth addresses passengers’ complaints and improves responsiveness and resolution. These initiatives have already shown significant progress since 2019.

“We are still moving forward to achieve our targets in 2030,” Al-Dahmash stressed.

Additionally, the investment showcases in the Kingdom align closely with the national aviation strategy’s ambitious goals.

The initiative presents a substantial economic opportunity amounting to $100 billion, with half of this investment targeted toward developing the airport infrastructure.

Mohammed Al-Khuraisi, the executive vice president of strategy and business intelligence at GACA, told Arab News: “We have King Salman Airport (undergoing a) massive expansion from 40 million to 120 million capacity, similarly, Jeddah Airport. Then we have around $40 billion worth of investments in terms of airlines, that entails commercial airlines.” 

He added: “We have heard Saudia major announcements yesterday of around 105 aircrafts. Prior to that, there were Riyadh Air major announcements as well, and we expect more waves of aircraft acquisitions in terms of passenger, airlines or also cargo airlines.”

Apart from airline investments, around $10 billion is allocated to various aviation-related services such as special economic zones, cargo logistics and general aviation as well as ground handling, maintenance, repair, and catering, illustrating a comprehensive approach to supporting the industry’s expansion and development.

 

Ali Rajab, executive vice president at GACA, air transport and international cooperation. AN

On the air connectivity front, Ali Rajab, executive vice president of air transport and international cooperation at GACA, highlighted Saudi Arabia’s ambitious plans for air connectivity, aiming to increase the number of destinations served by the country’s airports.

“We will have by 2030, 250 destinations that would reach to Saudi Arabia. In 2019, we were only 99, And today we have reached to 149 destinations,” Rajab said.

He added: “This conference focuses on connectivity, and we have around 73 airline representatives here. We have most of the industry, including airports and, logistics services and ground handlers, catering, etc., all of these companies help to have more connectivity, helping the world, connecting each other.”

Rajab also expressed confidence that by 2030, Saudi Arabia will emerge as the leading country within its region in terms of aviation and will rank fifth globally in the industry.