Labour reform, a challenge for Saudi Arabia

Sunday 17/07/2016
Khaled al-Ghefaili, executive director of Higher Institute for Plastics Fabrication, in Riyadh

Their heads bowed, young Saudi men concentrate on exam papers in a work­shop filled with industrial machines that will help them earn a living. The students at the Higher Institute for Plastics Fabrication (HIPF) learn to manu­facture plastic bags, pipes, bottles and other products, skills they im­mediately put to work in what the government says is a unique model.
Reducing the kingdom’s unem­ployment rate is a foundation — and major challenge — of the govern­ment’s wide-ranging Vision 2030 reform plan. It aims not only to have more Saudis in the workforce but also to give them vocational skills needed for a diversified pri­vate sector.
HIPF and similar institutes are a focus of the effort to transform the Saudi labour force, ending decades of over-reliance on oil exports to strengthen the Gulf kingdom’s in­dustrial base.
The National Transformation Programme (NTP), which sets five-year targets for implementing Vision 2030, calls for Saudi unem­ployment to be cut from 11.6% to 9% by 2020.
More than half of Saudis are younger than 25. The International Monetary Fund last year noted “very high and rising” youth un­employment, which it said must be tackled urgently.
Experts say doing so will be a major challenge, with Saudis long accustomed to a bloated public sec­tor, a heavily subsidised economy and a lack of incentive to work.
It is an attitude reflected in Saudis such as Hadi al-Harbi, an 18-year-old former security guard in Mecca who never finished middle school but would like to work again — as long as the job “is comfortable and with a good salary”.
More than 6.5 million foreign­ers were employed last year in the kingdom, whose Saudi population is about 21 million, according to data cited by Riyadh-based Jadwa Investment. Expatriates do every­thing from management to clean­ing the streets and waiting on ta­bles, in a society where many locals are reluctant to take jobs they con­sider menial.
Almost twice as many Saudis are employed in the public sector, where hours are shorter and leave longer, than in private firms.
By 2020 the government aims to cut its payroll to 40% of the budget from 45%, while seeking to foster “a culture of high performance” among all workers in the country.
Even in the private sector, some Saudis have jobs only on paper, re­cruited to help companies win in­centives — such as a greater ability to renew visas — or avoid sanctions established by the government to get more nationals employed.
Another goal of the NTP is to ex­pand the workforce’s number of women, whose job opportunities were traditionally restricted in a male-dominated, conservative Is­lamic society. The jobless rate for Saudi women rose slightly last year to 33.8% and the figure was nearly twice as high for women in their 20s, Jadwa said.
“In our culture it was hard for us to go to work or try to find our own way. It was not allowed,” said Sal­eema Shaker al-Malki, 30, a Riyadh mother of three who has never had a job.
Completely covered except for her eyes, according to the practice of many Saudi women, she said she hopes the NTP can help her find suitable work “so that I can escape from the routine life… and achieve my dreams”.
Improved education is a focus of the Vision 2030 plan, which calls for expanded vocational training and “rigorous standards” in basic learning.
A foreign education expert in Saudi Arabia said reforms would take years. Saudi Arabia’s well-equipped training institutes may “talk the talk” but standards still lag, the expert said.
HIPF is among the most ad­vanced of about 240 schools run by the government’s Technical and Vocational Training Corporation (TVTC). Some, such as the HIPF, are partnerships between the TVTC and the businesses that run them. The TVTC said the approach is unique because students receive a job as well as training, which is con­ducted in English.
“From day one of training” the newly arrived students, HIPF is ful­filling Vision 2030’s goal of employ­ment, said Khaled al-Ghefaili, the school’s executive director.
Each day starts with calisthen­ics and an inspection of students’ uniforms, which helps instil “dis­cipline” and a strong work ethic, Ghefaili said at the school in an in­dustrial district in Riyadh.
The course concludes with a job placement before graduates contin­ue to full-time employment.
Abdullah al-Aameri, 23, who is to graduate this year, said that aside from working in the industry many students also hope to open their own plastic businesses.
“So they will start their own jobs and give jobs to others,” Aameri says.
Established in 2007, HIPF has graduated more than 1,000 young men, about 70% of whom are em­ployed in the private sector. Ghe­faili said he is satisfied “to some extent” with that record, given that Saudi Arabia’s plastics sector has for decades relied on low-paid ex­patriates.
To succeed further, he said, the industry must evolve from a focus on consumer goods to more com­plex “higher-value” production, which would broaden job opportu­nities.