Unemployment, and Challenges in Saudi Arabia

Unemployment, and challenges in Saudi Arabia Is it not strange to hear of the unemployment problem from the largest oil exporter in the world? The problem of unemployment in Saudi Arabia began to appear at the beginning of the last century. In 1975, “Saudization” was launched as a way of replacing expatriate with Saudi workers for localization jobs, but after 37 years of unemployment is still one of the important topics of concern to citizen. The causes of the problem are education system, labor system, companies and foreign workers. The first cause of the unemployment problem in Saudi Arabia is education system.

In fact, the education system is failing to equip young Saudis with the right skills and young Saudis are not studying the subjects the society needs. For example, about 80% of our college students graduate in history, geography, Arabic literature and Islamic studies and the remainder is for graduating in science, engineering or from the medical schools, which is not covered by labor market needs of these disciplines required. Indeed, there is mismatch between the number of graduates from public and higher education institutions and the needs of the labor market. That is one major reason for unemployment, but it is not the only one.

The second cause is labor system; it is very old and needs to be modified to cope with modern developments. It also has many gaps and it is very easy to exploit. For example, one of Saudization program tools, is to increase the proportion of Saudis workers by 5% per year, but after more than 37 in the program, some companies still have rates less than 10%. In addition, some companies recorded Saudis worker names as a placebo to increase the percentage of Saudization. In short, labor systems contributed significantly to the worsening unemployment problem in Saudi Arabia, which has become the most important causes.

The third cause is foreign workers. The foreign workers are cheaper and more qualified than Saudis worker, because of that many local companies and foreign investors do not want to hire Saudis. For example, many companies prefer foreign workers because of its low cost, work longer hours, and do not to ask some of the rights labor. In addition, the percentage of foreign workers in Saudi Arabia was about 31% of the total population of 27 million in 2010, and $ 29 billion were sent outside of Saudi Arabia that same year.

Therefore, Saudi Arabia is dependent on foreign workers as a labor force because they will work cheaper and do work Saudis do not want to do much like the Mexican in the U. S. In conclusion, unemployment of Saudi youth is increasing. Many companies and foreign investors do not want to hire Saudis. Local companies and government departments can cater to only so many. Foreign workers convert billions of dollars annually. The causes of the problem are education system, labor system, and foreign workers. Lastly, in Saudi Arabia we are faced with issues of foreign workers that seem never ending.