In market economies, such as the Kingdom of Saudi Arabia, the private sector has been entrusted with the task of creating an adequate number of positions for the flood of job seekers coming out from schools, universities, technical colleges and other institutions.
In other words, the private sector shoulders the huge burden of creating job opportunities. The government sector comes next in discharging this social and economic responsibility.
The unemployment crisis is similar in different countries. Precisely speaking, this implies a lack of pumping sufficient funds to implement industrial, commercial and real estate projects so as to accommodate the national workforce. This is the general situation in most countries, including Saudi Arabia.
However, the Kingdom has one distinct peculiarity that is not visible in most other countries: A strong presence of imported labor.
In Saudi Arabia, there are about seven million foreigners working in various sectors. This is an entrenched workforce in the country for two reasons: It is less costly than Saudi labor and the sponsorship system restricts foreign workers' ability to switch jobs.
We were cautioned about the dangers of becoming overly dependent on imported labor nearly 20 years ago when the term “Saudization” was first coined to define the policy of replacing foreign workers with Saudis. But this process has not progressed as expected; employers still look at the bottom line of salary and quality of labor.
The Saudization drive has so far not realized the desired goal of reducing dependence on imported labor. There are solutions put forward every now and then, including the elimination of the sponsorship system that would allow foreign workers to leave jobs more easily, thus providing an incentive for the employer to pay them higher wages that might even the playing field for the Saudi worker. But it is not the only solution.
What is required is to offer working solutions to confront this challenge, which is regarded as the biggest economic and social challenge the Kingdom is facing.
