‘Unemployment, inflation rise due to faulty policies’

False Saudization rates boost unemployment and negatively influence Saudi citizens, warned economists in the Kingdom.
Dr. Abdul Hamid Al-Omari, a member of the Saudi Economic Association, criticized decisions of the Ministry of Labor, which he claimed were difficult to understand and didn’t address the market’s situation.
“The ministry’s programs are ineffective in employing citizens, and its decisions have led some to fake Saudization,” he explained, warning of severe repercussions.
“We will move from a case of mere economic distortions to a crisis that cannot be solved in traditional ways,” he told Arab News, charging that these problems could threaten the Saudi economy over the next two years.
Al-Omari pointed out that the high salaries of the fake Saudization rates amounted to billions of Saudi riyals, which cause inflation: “The companies don’t lose anything but consumers will suffer from the rising cost of living.”
Al-Omari called upon the Shoura Council to recommend that the Custodian of the Two Holy Mosques King Salman suspend the ministry programs, open an investigation into the errors and address the problems from their core.
Others claim their financial situations will be threatened by employing unqualified Saudis. The Saudi youths are not qualified for the jobs and that employing Saudis can have financial and organizational downsides in comparison to employing non-Saudis, economist Dr. Mohammed bin Dulaim Al-Qahtani said.
He said that there’s a gap between the aims of the Labor Ministry which is to employ more Saudis and reduce unemployment rates and the companies’ goals which are mostly limited to financial profits.
Al-Qahtani said the fake Saudization kills creativity among job seekers pointing out that the market needs 25 percent of its manpower as youths but they are not working. He also said that the companies waste SR585 millions on monthly salaries without any productive returns.
“Companies will suffer over the next few years from a lack of liquidity and poor productivity,” He charged.
Al-Qahtani suggested allocating 10 percent of companies’ salaries to one company associated with the Labor Ministry. “This model exists in some European countries where this company becomes responsible for stating the needs of the labor market, preparing job seekers by giving them the needed training,” he added.
Dr. Faisal Al-Otaibi, a specialist in sustainable development issues, explained that one of the reasons for fake Saudization is the lack of comprehensive control over the wages issue: “The delayed salaries make employees leave their jobs, looking for a more secure work,” he said.
Al-Otaibi said if Saudization is to have an influence on sustainable development in the Kingdom, there is need to focus on quality and not quantity, by preparing the appropriate professional environment for workers to continue working and maintaining productivity through measures such as controlling wages and meeting the basic needs of citizens.