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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News Network
April 20,2020

Sharjah, Apr 20: Air Arabia announced on Monday it will operate new repatriation flights from four cities in India to Sharjah carrying UAE nationals back home.

The special flights will operate from Mumbai and Delhi to Sharjah International Airport on April 20 while special flights will operate from Kochi and Hyderabad to Sharjah International Airport on April 22.

Air Arabia remains committed to bring stranded citizens back home as well as supporting requests to operate repatriation flights and is working closely with UAE authorities in this regard, the airline said.

Air Arabia announced earlier that it’s operating a mix of repatriation flights as well as cargo flights during the month of April to multiple destinations.

Further information about the repatriation and cargo flights is available on the website or can be obtained by contacting the Air Arabia call centre on 06 5580000 or respective travel agent.

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News Network
May 7,2020

Dubai, May 7: Saudi Arabia will emerge as the victor of the oil price war that sent global crude markets into a spin last month, according to two experts in the energy industry.

Jason Bordoff, professor and founding director of the Center for Global Energy policy at New York’s Columbia University, said: “While 2020 will be remembered as a year of carnage for oil nations, at least one will most likely emerge from the pandemic stronger, both economically and geopolitically: Saudi Arabia.”

Writing in the American publication Foreign Policy, Bordoff said that the Kingdom’s finances can weather the storm from lower oil prices as a result of the drastically reduced demand for oil in economies under pandemic lockdowns, and that it will end up with higher oil revenues and a bigger share of the global market once it stabilizes.

Bordoff’s view was reinforced by Sir Mark Moody-Stuart, former chairman of Royal Dutch Shell and one of the longest-standing directors of Saudi Aramco. In an interview with the Gulf Intelligence energy consultancy, he said that low-cost oil producers such as Saudi Arabia would emerge from the pandemic with increased market share.

“Oil is the only commodity where the lowest-cost producers have contained their production and allowed high-cost producers to benefit. When demand recovers this year or next, we will emerge from it with the lowest-cost producers having increased their market share,” Moody-Stuart said.

Bordfoff said that it would take years for the high-cost American shale industry to recover to pre-pandemic levels of output. “Depending on how long oil demand remains depressed, US oil production is projected to decline from its pre-coronavirus peak of around 13 million barrels per day.

“Shale's heady growth in recent years (with production growing by about 1 million to 1.5 million barrels per day each year) also reflected irrational exuberance in financial markets. Many US companies struggling with uneconomical production only managed to stay afloat with infusions of cheap debt. One quarter of US shale oil production may have been uneconomic even before prices crashed,” he said.

Moody-Stuart said that recent statements about cuts to the Saudi Arabian budget as a result of falling oil revenues were “an important step to wean the population of the Kingdom off an entitlement feeling. It means that everybody is joining in it.”

The former Shell boss said that other big oil companies would follow Shell’s recent decision to cut its dividend for the first time in more than 70 years. But he added that Aramco would stick by its commitment to pay $75 billion of dividends this year.

“When a company looks at its forecasts it looks ahead for one year, so for this year it (the dividend) is fine,” he said.

Bordoff added that Saudi Arabia’s action in cutting oil production in response to the pandemic would improve its global position.

“Saudi Arabia has improved its standing in Washington. Following intense pressure from the White House and powerful senators, the Kingdom’s willingness to oblige by cutting production will reverse some of the damage done when it was blamed for the oil crash after it surged production in March,” he said.

“Only a few weeks ago, the outlook for Saudi Arabia seemed bleak. But looking out a few years, it’s difficult to see the Kingdom in anything other than a strengthened position,” Bordoff said.

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Arab News
March 21,2020

Jeddah, Mar 21: Saudi government ministers on Friday announced a war chest of more than SR120 billion ($32 billion) to fight the “unprecedented” health and economic challenges facing the country as a result of the killer coronavirus pandemic.

During a press conference in Riyadh, finance minister and acting minister of economy and planning, Mohammed Al-Jadaan, unveiled a SR70 billion stimulus package to support the private sector, especially small- and medium-sized enterprises (SMEs) and businesses worst-hit by the virus outbreak.

And the Saudi Arabian Monetary Authority (SAMA) has also sidelined SR50 billion to help the Kingdom’s banking sector, financial institutions and SMEs.

Al-Jadaan said the government had introduced tough measures to protect the country’s citizens while immediately putting in place a financial safety net. He added that the Kingdom was moving decisively to address the global COVID-19 disease crisis and cushion the financial and economic impact of the outbreak on the country.

The SR70 billion package of initiatives revealed by the minister will include exemptions and postponement of some government dues to help provide liquidity for private-sector companies.

Minister of Health Dr. Tawfig Al-Rabiah noted the raft of precautionary measures that had been introduced by the Kingdom in cooperation with the private sector and government agencies to combat the spread of the coronavirus, highlighting the important contribution of the data communication services sector.

He reassured the Saudi public that the Kingdom would continue to do whatever was required to tackle the crisis.

“This pandemic has a lot of challenges. It’s difficult to make presumptions at this moment as we’ve seen; many developed countries did not expect the rate of transmission of this virus.

“We see that the reality of the situation is different from what many expected. The virus is still being studied and though we know the means of transmission, it is transmitted at a very fast rate, having spread to many countries faster than expected.

“We see that many countries have not taken the strong precautionary measures from the beginning of the crisis which led to the vast spread of the virus in these countries,” Al-Rabiah said.

He pointed out that social distancing would help slow the spread.

Al-Jadaan said the Saudi government had the financial and economic capacity to deal with the situation. “We have large reserves and large investments, but we do not want to withdraw from the reserves more than what was already announced in the budget. We do not want to liquidate any of the government’s investments so we will borrow.

“We have approval from the government after the finance committee raised its recommendations to increase the proportion of the domestic product borrowing from 30 percent to 50 percent. We do not expect to exceed 50 percent from now until the end of 2022,” he added.

The government would use all the tools available to it to finance the private sector, especially SMEs, and ensure its ongoing stability.

The finance minister said that at this stage it was difficult to predict the economic impact of the pandemic on the private sector, but he emphasized that international coordination, most notably through G20 countries and health organizations, was ongoing.

On recorded cases of the COVID-19 disease in the Kingdom, Al-Rabiah said: “Many of the confirmed cases are without symptoms, this is due to the precautionary measures being considered.

“As soon as a case is confirmed, we contact and examine anyone who was in direct contact with the patient. This epidemiological investigation, is conducted on a large scale to investigate any case that was in contact with the patient.”

Al-Jadaan also announced the formation of a committee made up of the ministers of finance, economy and planning, commerce, and industry and mineral resources, along with the vice chairman of the board of the Saudi National Development Fund, and its governor.

The committee will be responsible for identifying and reviewing incentives, facilities, and other initiatives led by the fund.

Committees had also been established, said Al-Jadaan, to study the impact and repercussions of the coronavirus crisis on all sectors and regions, and look at ways of overcoming them through subsidies or stimulus packages.

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