Saudi: Private sector to blame ‘for rise in unemployment’

June 9, 2015

Jeddah, Jun 9: Despite increased spending on education and training, the private sector was unable to provide sufficient jobs to absorb skilled national employees with high levels of education.

unemploymentAn official report from the Ministry of Planning and Economy cited two main reasons for the private sector’s failure in solving the unemployment problem. First are the limited opportunities for females in the sector; second, the majority of jobs provided by the private sector are non-skilled and do not require high levels of education, thus making the replacement of expatriate workers with citizens limited.

The ministry’s report indicated that Saudization increased in 2014 in the water, manufacturing, financial activities, telecommunications, and the wholesale and retail sectors, but rates declined in the electricity, mining, real estate, agriculture, health, transport, and hotel and restaurants sectors.

Out of a population of about 30.7 million people, including 20.7 million Saudi nationals and more than 10 million non-Saudis, an estimated 13.5 million Saudis are of official working age. More than 237,000 men and women entered the work force in 2014, while about 99,000 exited the same year, according to the report.

This growth in the proportion of workers entering the labor market poses demographic pressures, as it is not commensurate with the number of jobs available in the economy, the report revealed.

Furthermore, the rate of growth has accelerated in private sector employment in 2014, as its growth rate amounted to 14.18 percent as compared to13.5 percent the previous year. Government sector employment has grown at a rate of 3.28 percent in 2014, as compared with 6.4 percent in 2013.

However, employment growth in the private sector did not lead to a reduction in the unemployment rate among Saudis, as unemployment in 2014 remained at 11.7 percent.

Meanwhile, the number of Saudis unwilling to work in 2014 increased by 297 percent due mainly to the reluctance of young Saudis to take on unskilled jobs that are offered by companies in the private sector, which are not commensurate with their qualifications and are not suitable for those with a university education.

The report also revealed that 88 percent of new entrants in the private sector labor market in 2014 are male, while only 12 percent were female. The unemployment rate is higher among females, at 32.8 percent, while unemployment for males registered 5.9 percent in 2014.

The issue of unemployment in the Saudi economy is a sensitive and controversial matter of public opinion. The government has prioritized the issue and has launched multiple strategies to reform the labor market and increase the employment of Saudis in the private sector, as well as increase productivity.

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News Network
April 11,2020

Dubai, Apr 11: Saudi Arabia has reported another 382 new cases of coronavirus, bringing the total number of infections in the country to 4,033, the Ministry of Health announced on Saturday.

The ministry also confirmed five more deaths from the virus, pushing the death toll in Kingdom to 52.

A total of 35 people has made full recovery from the deadly disease, taking the tally of patients recovered to 720.

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News Network
April 13,2020

Dubai, Apr 13: The UAE plans to impose "strict restrictions" on countries reluctant to take back their nationals working in the Gulf country in the wake of the coronavirus outbreak and restructure its cooperation and labour relations with them, a state-run media report said on Sunday.

Indian expatriate community of nearly 33 lakh is the largest ethnic community in UAE constituting roughly about 30 per cent of the country’s population. Among the Indian states, Kerala is the most represented followed by Tamil Nadu and Andhra Pradesh.

The options being considered by the Ministry of Human Resources and Emiratisation include "imposing strict future restrictions on the recruitment" of workers from these countries and activating the "quota" system in recruitment operations, state-run WAM news agency reported, citing an official.

It said the options also include suspending memoranda of understanding signed between the ministry and concerned authorities in these countries.

Citing the unnamed official, it said these options are being considered after many countries did not respond to requests by their nationals to return home following the coronavirus outbreak.

The official made it clear that all countries of foreign workers in the UAE should be responsible for their nationals wishing to return to their countries as part of the humanitarian initiative launched recently by the ministry.

Earlier this month, the ministry launched the initiative to enable residents who work in the UAE and wish to return to their countries to do so during the period of precautionary measures undertaken in the UAE to contain the spread of the coronavirus.

Employees will be asked to submit their annual leave dates or agree with their employers on unpaid leave.

UAE's Ambassador to India Ahmed Abdul Rahman Al Banna has said that the Ministry of Foreign Affairs and International Cooperation (MOFAIC) had sent out a “note verbale” to all the embassies in the UAE, including the Indian mission, during the past couple of weeks on the issue.

“We have sent the note verbale and all the embassies have been informed including the Indian embassy in the UAE and even the Ministry of External Affairs in India,” Al Banna told Gulf News over phone on Saturday.

He said the UAE has offered to test those who want to be evacuated.

“We are assuring everybody that we have the best of the facilities, the best of the testing centres and we have tested more than 500,000 people,” he said.

“We are assuring them also of our cooperation to fly those who got stranded in the UAE for some reasons. Some got stuck because of the lockdown and closure of airports in India. Some were visiting the UAE.”

“We are offering our system and making sure that they are good (to fly) by doing all the tests and transport them according to the request of their own government,” he said.

The envoy said those who test positive for COVID-19 will remain in the UAE. “They will be treated in our home facilities,” he added.

The Kerala High Court on Saturday sought the central government's response to a petition seeking a direction to bring back Indians stranded in the UAE in view of the coronavirus outbreak in the gulf nation.

Considering the plea by Kerala Muslim Cultural Centre (KMCC) in Dubai, the court directed the Centre to file an affidavit on the steps taken by it to ensure the safety of Indians living there and bring back those stuck in the Gulf countries.

In its plea, KMCC, the organisation for non-resident Indians from Kerala, sought directions to the Ministries of External Affairs and Civil Aviation to provide exemptions in the international air travel ban to bring back those Indians stranded in the UAE.

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Agencies
June 9,2020

Dubai, Jun 9: Dubai's Emirates airline has begun laying off employees to reduce cost and save cash as the carrier looks to rightsize its workforce.

"We at Emirates have been doing everything possible to retain the talented people that make up our workforce for as long as we can. However, given the significant impact that the pandemic has had on our business, we simply cannot sustain excess resources and have to rightsize our workforce in line with our reduced operations. After reviewing all scenarios and options, we deeply regret that we have to let some of our people go," the spokesperson said in the statement.

Citing sources, Reuters and Bloomberg earlier reported that a majority of those being made redundant are cabin crew workers as well as a minority of its engineers and pilots, including those flew the Airbus A380.

"This was a very difficult decision and not one that we took lightly. The company is doing everything possible to protect the workforce wherever we can. Where we are forced to take tough decisions we will treat people with fairness and respect. We will work with impacted employees to provide them with all possible support," said the statement.

The spokesperson, however, didn't disclose how many employees are being made redundant in this latest round of rightsizing the workforce.

Emirates on Sunday confirmed that it extended the period of reduced pay for its staff for another three months till September. It had previously reduced basic wages by 25 to 50 per cent for three months from April, with junior employees exempted.

The airline had employed around 60,000 people at the end of its 2019-20 financial year.

Saj Ahmad, chief analyst at StrategicAero Research, said the announced job cuts at Emirates will likely not be the last given the unprecedented damage that Covid-19 has had not just on air travel, but on the entire aviation industry as a whole.

"Emirates' massive international network means that job reductions were always a last resort option as the company staves off cash burn and expenses at a time when revenues are dried up. While Emirates SkyCargo is enjoying a resurgence in activities, the reality is that this income will never offset the lost money from passenger operations," he added.

"Whilst some salary reduction schemes have prevented bigger job cuts for now, the absence of a cure or medicinal suppressant of Covid-19 means that air travel is unlikely to even reach pre-9/11 levels within 3-5 years, let alone pre-Covid-19 levels in that same time period. For that reason, Emirates' reduction in headcount is necessary to stay competitive, agile and be ready for when air travel can resume with a degree of normalcy that we have been accustomed to for decades," said Ahmad.

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