Private schools blame Saudization for their financial woes

February 4, 2013

saudiRiyadh, Feb 4: About 13 private schools in Jeddah laid off staff and students after experiencing significant financial hardships following the decision by the Ministry of Labor to raise minimum wage for Saudis teachers, school officials said.

The closure of private schools will increase public education costs on the government.

“Private schools save the government SR12 billion annually, given the fact one public education pupil costs the government about SR 20,000 a year,” said Othman Al-Qasabi, chairman of the committee for private schools at Riyadh Chamber of Commerce and Industry.

The Saudization quota required from girls’ schools by the Ministry of Labor led to difficulties and hardships for these schools that had to raise their fees by 50 percent, which was rejected by many parents who drew their offspring out.

Private school Principal Al Zahra Girls’ School Buthaina Al-Ghamdi said the minimum wage decision has affected the school in terms of having to bear higher expenses, but not to the extent of closing it.

She said the school did not approve any increase in fees paid by pupils, adding that Saudi teachers needed training on the new developed curriculum.

Pupils of a closed private school would turn to public schools and that means more costs for the government and would also affect the quality of education in terms of having overcrowded classrooms.

“With the increase in the salaries of teachers it is not feasible for private schools that charge a pupil SR 8,000 or less a year to stay open,” Al-Qasabi said. “And with the fact most parents won’t pay more than SR 10, 000, the schools (the ones charging less than SR 8, 000) would close and their pupils would turn to public ones.”

Al-Qasabi, however, believes that increasing teachers’ salaries was a necessity, stressing the importance of incentives and motivation for teachers. Incentives play a major role in the educational process.

He said adding private schools teachers’ salaries are the lowest in Saudi Arabia relative to other jobs. He also called on the government to financially support private schools’ pupils in a way that expands the market, improves quality and reduces costs for the government.

It was reported the National Committee for Private Schools recorded a number of withdrawals from private schools as parents could not afford increased fees and preferred to enroll their children at public schools. Most of the closed schools are girls’.

“Most private schools owners are unable to bear the increase in salary,” said Farida Farsi, chairwoman of the committee for girls’ private schools at Jeddah Chamber of Commerce and Industry. “They are small investors who rent residential buildings (villas) and opened private schools at their neighborhoods as a result of the Ministry of Education’s failure to accommodate all of a neighborhood’s pupils in its (the neighborhood’s) government schools.”

However, schools only have to pay SR 3, 100 of the SR 5,000 minimum wage as the remaining SR 2,500 is paid by the government’s Human Resources Fund.

“Many schools cannot afford the portion they have to pay, which is added to increased costs that are the result of stricter Civil Defense requirements of equipment and systems. The bankruptcy is due to several reasons not only the minimum wage decision. Some owners may have found it is the best solution.”

Malek bin Taleb, head of the national private schools committee, said the majority of private schools for girl closed their doors, while some others for boys will follow.

“Most of these schools will permanently leave the sector in the wake of the decision and the ensued regulations and instructions,” he added.

He said that more private schools will follow, given the Ministry of Education’s committee on increasing fees of private schools’ refrainment from listening to demands by the committee, stressing that the problem seems more explicit at girl’s school, where the required Saudization quota is close to 100 percent compared to boys’ schools.

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Agencies
February 27,2020

Riyadh, Feb 27: Saudi Arabia on Thursday halted travel to the holiest sites in Islam over fears about a new viral epidemic just months ahead of the annual hajj pilgrimage, a move coming as the Mideast has over 220 confirmed cases of the illness.

The extraordinary decision by Saudi Arabia stops foreigners from reaching the holy city of Mecca and the Kaaba, the cube-shaped structure the world's 1.8 billion Muslims pray toward five times a day. It also said travel was suspended to Prophet Muhammad's mosque in Medina.

The decision showed the worry about the outbreak potentially spreading into Saudi Arabia, whose oil-rich monarchy stakes its legitimacy on protecting Islam's holy sites. The epicenter in the Mideast's most-affected country, Iran, appears to be in the holy Shiite city of Qom, where a shrine there sees the faithful reach out to kiss and touch it in reverence.

"Saudi Arabia renews its support for all international measures to limit the spread of this virus, and urges its citizens to exercise caution before traveling to countries experiencing coronavirus outbreaks," the Saudi Foreign Ministry said in a statement announcing the decision.

"We ask God Almighty to spare all humanity from all harm." Disease outbreaks always have been a concern surrounding the hajj, required of all able-bodied Muslims once in their life, especially as pilgrims come from all over the world.

The earliest recorded outbreak came in 632 as pilgrims fought off malaria. A cholera outbreak in 1821, for instance, killed an estimated 20,000 pilgrims. Another cholera outbreak in 1865 killed 15,000 pilgrims and then spread worldwide.

More recently, Saudi Arabia faced a danger from a related coronavirus that caused Middle East respiratory syndrome, or MERS. The kingdom increased its public health measures in 2012 and 2013, though no outbreak occurred.

While millions attend the 10-day hajj, this year set for late July into early August, millions more come during the rest of the year to the holy sites in the kingdom.

"It is unprecedented, at least in recent times, but given the worldwide spread of the virus and the global nature of the umrah, it makes sense from a public health and safety point of view," said Kristian Ulrichsen, a research fellow at the James A Baker III Institute for Public Policy at Rice University. "Especially since the Iranian example illustrates how a religious crossroads can so quickly amplify the spread and reach of the virus." The virus that causes the illness named COVID-19 has infected more than 80,000 people globally, mainly in China. The hardest-hit nation in the Mideast is Iran, where Health Ministry spokesman Kianoush Jahanpour said 19 people have died among 139 confirmed cases.

Experts are concerned Iran may be underreporting cases and deaths, given the illness's rapid spread from Iran across the Persian Gulf. For example, Iran still has not confirmed any cases in Mashhad, even though a number of cases reported in Kuwait are linked to the Iranian city.

In Bahrain, which confirmed 33 cases as of Thursday morning, authorities halted all flights to Iraq and Lebanon. It separately extended a 48-hour ban overflights from Dubai and Sharjah in the United Arab Emirates, through which infected travellers reached the island kingdom off the coast of Saudi Arabia.

Iranian President Hassan Rouhani said there were no immediate plans to quarantine cities but acknowledged it may take "one, two or three weeks” to get control of the virus in Iran.

As Iran's 80 million people find themselves increasingly isolated in the region by the outbreak, the country's sanctions-battered economy saw its currency slump to its lowest level against the US dollar in a year on Wednesday.

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News Network
May 5,2020

Abu Dhabi, May 5: The overall real GDP (gross domestic product) of the United Arab Emirates is estimated to have grown by 1.7 percent in 2019, the country’s central bank said in a statement on Monday carried by WAM.

"The UAE hydrocarbon sector is estimated to have exhibited a growth of 3.4 percent in 2019. However, non-oil activities advanced at a softer pace growing by 1.0 percent. As a result, overall real GDP is estimated by FCSA (Federal Competitiveness and Statistics Authority) to have grown by 1.7 percent in 2019," said the financial regulator in its Annual Report 2019.

"The spread of COVID-19 is expected to impact trade and supply chain movements, coupled with travel restrictions which paves way for high volatility in capital markets and commodity prices. While the outbreak is expected to negatively affect the global and domestic economies, it is still early to gauge the scale of the economic fallout," the report added.

The report noted that the higher hydrocarbon output, as well as growth in non-hydrocarbon economic activity, supported the pace of the country's overall economic growth in 2019.

"Meanwhile, the fading effect of VAT, the appreciating Dirham, lower energy prices and decline in rents pushed inflation in negative territory. However, the employment rate registered a steady rebound. Looking ahead, the economic outlook for 2020 remains uncertain owing to the COVID-19 outbreak," the report elaborated.

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Agencies
March 15,2020

Riyadh, Mar 15: Saudi Aramco on Sunday reported a 20.6 percent drop in its net profit for 2019 due to low oil prices and production levels, the company said in a statement.

These are the first annual results to be announced by the energy giant after its historical $29.4 billion initial public offering and listing on the Saudi Tadawul market last December.

Aramco posted net profits of $88.2 billion last year compared to $111.1 billion in 2018, Monday's statement said.

"The decrease was primarily due to lower crude oil prices and production volumes, coupled with declining refining and chemical margins," it said.

The company also made $1.6 billion of impairment provisions for losses associated with Sadara Chemical Company, an Aramco subsidiary.

"2019 was an exceptional year for Saudi Aramco. Through a variety of circumstances -- some planned and some not -- the world was offered unprecedented insight into Saudi Aramco's agility and resilience," CEO Amin Nasser said.

"Our unique scale, low costs, and resilience came together to deliver both growth and world-leading returns, while also maintaining our position as one of the world's most reliable energy companies," Nasser said.

The earnings for last year are not affected by the coronavirus outbreak or the ongoing price war between Saudi Arabia and Russia that has sent oil prices crashing.

Aramco said it will distribute dividends worth $73.2 billion for 2019 but based on its commitments under the IPO, its dividends for the next five years starting this year will be at least $75 billion.

It said its capital spending last year dropped to $32.8 billion from $35.1 billion in 2018.

The company expects capital spending, which is expenditure on projects, to be between $25 billion and $30 billion this year "in light of current market conditions and recent commodity price volatility."

But it said that capital expenditure for 2021 and beyond is currently under review.

The results were announced amid a price war between Saudi Arabia and Russia after they failed to agree on additional output cuts to support prices dented by the outbreak of the coronavirus pandemic.

"The recent COVID-19 outbreak and its rapid spread illustrate the importance of agility and adaptability in an ever-changing global landscape," Nasser said.

The kingdom said last week Aramco will pump 12.3 million barrels of oil per day, boosting output by at least 2.5 million bpd.

It also announced plans to raise production capacity from 12 million bpd to 13 million bpd.

Forecasts for future crude prices and demand are also bleak.

In its latest monthly report, the Organization of Petroleum Exporting Countries lowered its forecast for global average daily demand by 0.92 million barrels to 99.73 million barrels.

Saudi Arabia is also in the midst of a royal purge that saw King Salman's brother and nephew detained after sources said they were accused of plotting a palace coup to unseat the crown prince, heir to the Saudi throne.

Aramco shares rallied immediately after the listing on December 11, rising by 19 percent to 38 riyals ($10.1) and temporarily lifting the company's valuation above the $2 trillion mark, which was sought by Crown Prince Mohammed bin Salman, Saudi Arabia's de facto ruler.

But as oil prices tumble, Aramco shares have lost 29 percent from its highest point, slipping below the listing price.

On Thursday, Aramco's market value dropped to around $1.55 trillion, but it still remains the world's largest publicly listed company.

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