Saudi labor ministry: 'Saudization' policy a failure

December 10, 2011 12:52pm

Saudi Arabia’s “Saudization" policy, which seeks to prioritize the hiring of Saudi nationals over expatriates, has so far been a failure, according to the country’s ministry of labor.

In an article on Dubai-based news site Emirates 24/7, Saudi Arabia’s labor ministry said 50 percent of private companies were still not complying with the plan, despite the Saudi government’s warnings that they could be denied new work visas.

Private sector companies in Saudi Arabia currently employ over six million migrant workers, according to the Saudi Arabia labor ministry. Meanwhile, over one million Saudis remain jobless.

In July this year, the oil-rich Saudi Arabia was home to over eight million expatriates, of which 1.2 million were overseas Filipino workers (OFWs).

Also in the same month, the Philippine Overseas Employment Administration (POEA) downplayed concerns that the Saudization policy would have an immediate impact on OFWs, saying that the policy would be implemented in a “gradual and calibrated" manner.

'Nitaqat' system

The Saudization initiative or the 'Nitaqat' system was launched on June 11, 2011, after previous efforts of the Saudi Arabian government to force private companies to hire more locals failed.

The Emirates 24/7 article noted that analysts have described the Nitaqat as the “most radical measure" done by Saudi Arabia’s government to make private companies hire locals, as unemployment in Saudi Arabia continues to increase.

According Saudi labor minister Adel Faqih, the country's official unemployment rate was pegged at 10.5 percent at the end of 2010. Also, he said that about 90 percent of Saudi Arabia's private sector was populated by foreigners.

The system puts Saudi Arabia’s private companies into four categories: excellent and green for complying companies and yellow and red for non-complying companies.

Companies are required to employ a certain number of Saudi locals based on company size and the occupation of the company’s workers.

Red-coded companies had until September 11 to comply with Saudization requirements while yellow-coded ones have until December 11 to comply.

Should the yellow-coded companies fail to comply with the government’s requirements, they will not be allowed to renew the work visas of foreign workers beyond six years. Red zoned companies who do not meet the government’s requirements, meanwhile, will be unable to renew the work visas of foreign workers. — Bea Cupin /LBG, GMA News

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