Posted on 11/11/2002 2:52:07 PM PST by knighthawk
RIYADH, 11 November 2002 — There are over 490 dependents for every 100 Saudi workers at present, which is 2.4 times higher than the world average, a new study shows.
“With Saudi Arabia’s population growth at three percent per annum, assuming the average GDP growth rate over 1980-2000, GDP per capita will drop to less than SR10,000 per year by 2020 unless action is taken to address the growing unemployment problem”, warned the study, conducted by the Saudi British Bank.
“Any major decline in income per worker could have a dangerous effect on living standards” the study warned.
Some estimates suggest that the unemployment rate in Saudi Arabia is as high as 27 percent, whereas the Manpower Council puts it at 14 percent and the Saudi American Bank at 15 percent.
The gas initiative, even if fully implemented, will not provide more than very partial solution to the unemployment problem, said the study, adding that the government, however, is paying serious attention to the problem.
“Why is Saudization so slow and why are only an estimated 30,000 to 40,000 Saudis finding jobs each year out of a new entrant level to the work force of up to 130,000 per year?
The Seventh Development Plan offers two main answers or reasons for the unemployment problem. The relatively high cost of Saudi manpower is one answer, compared to foreign workers and the continuous inflow of foreigners into the country, whose numbers increased by 1.5 percent over the Sixth Development Plan period despite government policy to reduce this dependency.
On the other hand, the Manpower Council says that the inadequate qualifications of Saudi nationals, reluctance of Saudis to work in the private sector, difficulty in sacking Saudi workers, poor communication skill in English language often required in the private sector and reluctance of Saudi workers to change job locations are some of the major obstacles in the process of Saudization.
The study said that the solution to this problem is in part driven by market forces. “Over time there will be a need for Saudi nationals to be more realistic in their wage demands and in their conditions of employment, while working for private sector enterprises”, said the study, adding that the public sector cannot afford to absorb more Saudi workers on the existing higher wages and benefits.
The study has also identified two major problems, which have handicapped Saudi youngsters to find suitable employment. The education and training systems to meet the needs of the economy have been a failure with half of the Kingdom’s eight universities focussing on religious studies. It said that only 8.8 percent of Saudi students graduate in engineering and 42.2 percent graduate in social studies or religious education.
This is in addition to the failure of the Kingdom’s technical institutes, which are grossly undersubscribed and their links with the private sector still need to be developed. They need to update their syllabi and introduce practical lessons at par with the lessons of reputed international institutes. Also, Saudi Arabia needs to make employment policy much more sector specific and less general.
Duh... Was there really anyone who thought that per capita income would increase if unemployment stagnates?
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