740c422896de6011a0898dc1bf9da9e0f2e6fb3d
Before the Campaign
In the beginning of 2013, the total labor force was 11,286,744, with employed being 10,634,733, and non-Saudi employees were 6,003,616, which is 56,45% of the total employees.class="squire-citation ltx_cite" class="ltx_cite" data-bib-text="@misc{_labour_aaaa,
title = {{Labour {Force} {Survey} 2013 {Round} 1}},
url = {http://www.cdsi.gov.sa/english/index.php?option=com_docman&task=cat_view&gid=233&Itemid=162},
publisher = {Central Department Of Statistics \& Information},
annote = {Saudi Population ( 15 Years and Over ) By Administrative Area and Sexand Employed (15 Years and Over ) By Age Group and Main Occupation Groups},
}
" data-bib-key="_labour_aaaa" contenteditable="false" style="cursor: pointer"> contenteditable="false"> href="#_labour_aaaa">_labour_aaaa Consistent with our description of the political economy of Saudi, these employees are concentrated in the private sector, in which 99% of the expatriate workers are employed. It can observed that the educational level of their majority is low, as 62.3% are below high school level, therefore 59% are in “support engineering” and “services” occupations; and by sector 26%.5 are in construction, 22.3% in wholesale, and 15% in domestic jobs. In fact, three quarters of jobs created by the Saudi market in the three years between 2009-2011 were fulfilled by foreign workers.
Apparently, most of the the jobs created by the Saudi markets does not require high levels of education. Statistics point to weak qualification of labor force as the working permits for professional occupations that require “high or very high qualification” were only 12% of the total permits.class="squire-citation ltx_cite" class="ltx_cite" data-bib-text="@misc{_labour_aaaa,
title = {{Labour {Force} {Survey} 2013 {Round} 1}},
url = {http://www.cdsi.gov.sa/english/index.php?option=com_docman&task=cat_view&gid=233&Itemid=162},
publisher = {Central Department Of Statistics \& Information},
annote = {Saudi Population ( 15 Years and Over ) By Administrative Area and Sexand Employed (15 Years and Over ) By Age Group and Main Occupation Groups},
}
" data-bib-key="_labour_aaaa" contenteditable="false" style="cursor: pointer"> contenteditable="false"> href="#_labour_aaaa">_labour_aaaa
Stances of Stakeholders
Interests of business persons and firms are represented through the Chambers of Commerce in 28 cities/provinces across the kingdom, under the umbrella of Council of Saudi Chambers. Chambers of Commerce are one of the few lobbies in Saudi, where two-thirds of the members of Board of Directors are elected every four years, and the remaining third are appointed by the Ministry of Commerce and Industry. Business persons and firms were cautious at best, and alarming and condemning at worst, while trying to show up supportive of enforcing the Residency Laws and Law of Workmen and Work, and ending unemployment among Saudi youth.
On the highest level of business owners, after more than a year of expiry of extended grace period, Abdulrahman Al-Zamil, Director of Council of Saudi Chambers, was careful to appear in support of the correction campaigns undertaken by the Ministries of Labor and Interior to regulate the saudi markets and end the violations of the foreign labor, emphasizing the importance of enforcing regulations. ...
year = {2013},
file = {Snapshot:/Users/alialsaffar/Library/Application Support/Zotero/Profiles/xhxkxl3g.default/zotero/storage/VR7GGJMA/deported-yemenis-thrown-into-trucks-like-sheep-in-saudi-foreign-labour-crackdown.html:text/html},
}
" data-bib-key="al-masmari_deported_2013" contenteditable="false">Al-Masmari 2013Muneer Al-Bashiri complained that they were “thrown into a truck like sheep.” Najeeb Al-Udaini, head of Yemeni Migrants Organization states, “our problem is not with the Saudis; it’s with the Yemeni government, whose embassy is impossible to reach.” An investigation in Al-Arabi Al-jadeed newspaper affirms the statement of Al-Udaini, as consensus from migrant Yemenis in Saudi emphasized the absence of any positive role by the Ministry of Migrants Affairs and the Yemeni embassy in Riyadh. Riyadh.Al-Ahmadi 2014 The secretary of the Yemeni community in Riyadh was reported saying, “the Ministry of Migrants Affairs does not want real representatives of migrants, but rather clients serving as tribal sheikhs.”
Field sheikhs.”Al-Ahmadi 2014
Field Results of the Security Campaign
With the end of grace period announced by the King, Ministry of Interior started it field campaign to punish violators of Residency Regulations and Law of Workmen and Work, and it has not stopped until the writing of this paper in April 2015. Ministry of Interior publishes on a daily basis statistics on the results of the field security campaign on its website. By the end of March 2015, the number of violators forcibly deported amounted to one million and fifty thousands, thousands,_security_???? but these numbers are not broken down by nationality, as they are always referred to as “from different ages and nationalities.” Asked by the former newspaper on whether the campaign targets Yemenis disproportionately, a former official in Saudi embassy in Yemen answered, “if the correction campaign targets Yemenis and exclude others, the process of issuing new work visas would have not continued daily in the embassy.”
Other embassy.”_11_2015
Other statistics issued by the Ministry of Interior might be utilized to gauge the degree of nationality community was affected, without implying that the campaign targeted specific nationalities. According to statistics of immigrants caught at the Saudi borders for Shawwal 1436 AH (May - June 2014), the overwhelming majority (99%) are the Saudi-Yemeni border. The number of immigrants caught at the Saudi-Yemeni border only (Asir, Najran, and Jizan provinces), amounted to 27,043 while all other provinces (al-Madinah, Tabuk, al-Jouf, Northern Area, and Eastern Area provinces) were 7 immigrants only. only._statistics_???? Statistics of ther months do not differ much, where the number of caught immigrants ranged from 44 thousands to 19 thousands during the months of the 1435 AH (November 2013 - October 2014).It 2014).Al-Khamisi 2015It can be assumed that a not very low percentage of those who try succeed into getting into the kingdom, otherwise no one would try.
These statistics are not surprising when considering the wall installed on the Saudi-Iraqi border, and the difficulty of crossing the sea, “because of the advanced techniques and radars that the guard borders possess enabling them to detect crossers by sea” as the spokesperson of Border Guard, General Mohammed al-Ghamdi puts it, and the absence of push factors in other neighboring GCC countries. countries.Al-Khamisi 2015 Thus, Yemenis remain more likely than others to enter Saudi illegally, immediately being in violation of the Laws of Residency, in contrary to, for instance, South Asians, who enter the country legally and then violate the the law in later years. If can be assumed, cautiously, that the Yemeni immigrants (in addition to African immigrants) that cross the Southern borders were disproportionately affected. affected._there_???? Before even the the beginning of the security campaign that followed the end of the grace period that ended in November 2013, the number of deported Yemenis in March 2013 totalled about 130 thousands, and security Yemeni officials expected the deportation of additional 80 thousands with the beginning of the security campaign in November 2013.
Thus, even though the correction campaign has not appeared to target specific nationalities, it probably affected disproportionately the labor of a country that tied to Saudi culturally, socially, and geographically, yet with much lower income. The negative ramifications has probably started even before the end of the correction campaign. Abdulqader Ayedh, deputy Minister of Immigrants Affairs, has warned of decreased remittances of Yemeni immigrants working in Saudi in June 2013. Warning of worsening unemployment rate in Yemen (World Bank estimates it 17.7% in 2012) and deterioration of economic conditions increases the probability of civil unrest. unrest._yemen_2012 This seems logical as the Yemen is sliding increasingly towards a civil war that prompted a Saudi-led military coalition of ten countries. It is worthing noting that the elimination of the exclusion of the Sponsorship System granted to Yemenis in 1990, with the resulted deportation of one million Yemenis had been followed by a civil war between the north and the south in 1994.The 1994.Al-Kebsi 2013The ramifications of the correction campaign might go beyond the borders of the Kingdom, affecting the internal situation in Yemen, which does not seem to be a considered consequence of decisions-makers.
There are no available data from the Ministry of Labor or Ministry of Interior on the breakdown of deported labor by sector and professional occupation. However, labor-intensive sectors would be the most negatively affected, when 84.5% of the labor of the private sector are concentrated in construction, wholesale and retail, manufacturing, agriculture, forestry, hunting and fishing industries. industries.Abdullah 2013 Construction sector seems to be hit hardest given the its high number of foreign labor. Moammar Al-Atawi, Director of Contracting Committee in Jeddah Chamber of Commerce and Industry, clarifies that nationalization (Saudization) percentage in the construction sector does not exceed 10.12%, with around 4 million and 270 thousands working at its 270 thousands small-size enterprises. enterprises._taraju_2014 According to Raed Al-Aqeeli, the member of National Committee at the Saudi Chambers of Commerce, 36% of construction projects has stopped because of the correction campaign. campaign._labor_2013 Director of Contractors Committee at Jeddah Chamber of Commerce and Industry, Abdullah Radwan, said that “labor market is in chaos because of the large number of deported foreign labor during the correction campaign,” and “firms and contractors are facing incomplete projects, with high wages and weak demand being imposed.”
According imposed.”_labour_2013
According to the census of private establishments in 2010 undertaken by the Central Department of Statistics, the number of private establishments amounted to one million and 300 thousands establishments, 71% of them are operating, numbered at 919,078 establishments. establishments._economic_2010 Small establishments which employe 1-4 workers make 84%, while mid-size establishments, that employ 5-19 workers, make 13%. 13%._economic_2010 Even though there is not a new census of private establishments after the correction campaign, some date show a decrease in the number of small operating establishments in the past two years because of measures of the Ministry of Labor. Ali Al-Uthaim, Director of National Committee of Entrepreneurs in Jeddah Chamber of Commerce and Industry, claimed that the decrease percentages reached 9.04% for the number of small establishment in 2010 reached 9.04%, and 11.1% for very small establishments, and that 191 thousands very small establishments and 21 thousands small establishments were driven out of the market.
The market._taraju_2014
The Peculiarity of the Campaign
Announced goals of the campaign do not differ substantially from the Saudization policies undertaken by the government since the 90s as a solution to the problem of increasing unemployment among Saudis. But this large-scale campaign seems to be conducted in the frame of “imposing and enforcing the law,” in contrary to previous approaches that relied on general public policies and incentives. In other words, the campaign was an indicator of governmental direction that deals with unemployment -with the cause being foreign labor- as a security problem that threatens citizens and the state. This is evident in the wide media coverage of the public raids carried by the Ministry of Interior and the closing of violating firms and the rampant checkpoints in cities, and the horror and feeling of insecurity that prevailed among the irregular foreign labor with the advent of “law and order” phase.
The force used by the Saudi authorities prompted condemnation from western human rights organization. Joe Stork, deputy director of Human Rights Watch's Middle East and North Africa division, stated that “Saudi authorities have spent months branding foreign workers as criminals in the media, and stirring up anti-migrant sentiment to justify the labor crackdown. Now the Saudi government needs to rein in Saudi citizens who are attacking foreign workers.”The workers.”_saudi_2013 The organization documented the violence witnessed in Manfouha neighborhood south of Riyadh, where many numbers of Ethiopians reside.
On the other hand, official authorities justified the campaign by promising that it will provide jobs for Saudis, and Ministry of Labor announced that it will contribute to the opening of thousands of jobs for citizens, male and female, but economic reasoning and statistics show that these promises have not been achieved.
According achieved._60_2013
According to the numbers of the Central Department of Statistics and Information, unemployment rate amongst Saudis for June 2013 was 11.7%, compared to 11.8% at the beginning of 2013, and 11.7% midyear 2013.Then, 2013._labour_2014Then, overall, the campaign didn’t help to substantially decrease the unemployment rate among Saudis, and the high levels of unemployment persisted in the youth category (25-29 year-old) that it reached 38.9% in 2014. The likely explanation for the failure of the campaign in decreasing the rate of unemployment is that most of the unemployed are Bachelor's degree holders, with 51%, followed by high school certificate holders, with 34.4% while the majority of deported foreign labor possess low educational qualifications.
Economics of foreign labor
To prove the positive outcomes of the campaign on employment of Saudis, Adel Faqeeh, the Minister of Labor affirmed that 250 thousands took advantage of the employment services during the campaign. campaign._250000_2013 In May 2015, Mufrij Al-Haqbani, Deputy Minister of Labor, announced that the correction period increased the employment from 35 thousands to 65 thousands monthly, and the number of Saudis in the private sector increased from 700 thousands to 1.5 million after the correction period. period.Al-Haqbani 2014 Then, Ministry of Labor implies that the presence of this foreign labor is harmful to the interests of Saudi citizens and aggravates the problem of unemployment, and deporting them -through these campaigns- will result in substituting them with local labor. But how accurate are these claims/expectations from an economic point of view?
The argument that states deported foreign labor will be replaced by local labor ignores the slopes of supply and demand. For the sake of simplicity, we can assume that, without foreign labor, the supply of local labor will be weak with high wages (“Local demand” in the graph). However, with the presence of foreign labor, the supply curve will shift to the right with a change in its slope (“Total Demand including Foreign Labor” in the graph), as the number of workers will increase substantially (Column N2) -taken into consideration the difference in wages and the number of willing citizens to take on these jobs- with a big decrease in wages (Line W2). When all foreign labor is deported, the number of workers will be limited to the local demand with higher wages as the slope of the curve of local supply is higher (Point B) Then, in the most extreme case, deporting all foreign labor will not result in replacing them with local labor, but rather will the number of local workers will increase with a lesser number, with an increase in wages in elimination of many jobs occupied by the foreign labor.
Thus the claim that deporting irregular foreign labor with result in replacing it with local labor seem far-fetched under current market circumstances. But what is the effect of foreign labor on the general level of wages in the local economy?
Theoretically, on the short-term, immigration or foreign labor decreases the wages of workers they are in competition with and increases the wages of complementary workers. workers.Borjas 2013 Low-wages foreign labor increase competition on low-skilled jobs. In the same time, high-wages local labor are benefited because they will pay less in return of services that low-wages foreign labor provide, which enable them to specialize in the jobs that suits their skills and educational levels.
For levels.Borjas 2013
For instance, the immigration of one million elementary-school-educated workers might result in a severe competition with the elementary-school-educated local workers. In the United States of America, for example, wages of high-school dropouts are negatively affected by immigration as their wages decreased by 6.2%, while it would have been 1.7% at the abscence of immigrants because most of immigrants -especially illegal immigrants- occupy jobs that are competed over by American high-school dropouts. However, since the jobs occupied by the irregular workers almost entirely do not require high skills, the logical outcome of deporting them will be an increase in prices and elimination of many jobs.Even jobs._according_2013Even if there is partiality for local workers in foreign-labor-intensive sectors, the new laws such as the minimum wages for nationals will make the former safe from such negative effects of completion and the wage decrease it causes.
The unintended consequences such as increase in prices and the elimination of numerous jobs, were evident in the construction and contracting sector, where newspaper reports talked about a 150% increase in wages with the start of inspections that followed the end of the grace period. period.Al-Mani 2013 The food sector witnessed a similar result as the prices of food commodities increased by 20% in the same period. period._rtifa_2013 General analysis shows that the effects of the irregular workers correction campaign had a negative effect on consumer of goods and services provided by the foreign labor, as wages increased and operations decreased. While the employers were negatively affected as the return on capital and investment decreased which might drive many of them out of the market, which explains the complaints expressed by many employers in sectors as non-foreign-labor-intensive as the healthcare sector.
Albeit the results above, the Ministry of Labor shows sign of being in preparation of renewal of the correction campaign, as Adel Faqeeh, Minister of Labor, has stated that at the end of 2014, “the correction campaign will return strongly because there is no justification for any violator of this country’s laws to stay, and only those who obey its laws and regulations should stay. stay.Al-Qarni 2014 Enterprises that are working regularly can satisfy its needs according the regulations of Ministry of Labor, and we should not let any talk about negative consequences of the campaign to serve as a justification for allowing violators to work under any circumstances.” Okaz newspaper published a report on a plan by the Ministry of Labor to relaunch the campaign, that includes interviews with some of the foreign labor and a director of a recruitment office, unanimously agreeing on the positive results of the campaign, and emphasized the need to abide by the Laws of Residency and Law of Workmen and Work. Work.Al-Jasir 2015 It the genuinity of this report cannot be independently verified, the statement of Minister of Labor and the published interviews all point to the “necessity to abide by the laws” to work in the Kingdom, not to the alleged positive effects on the economy particularly or its alleged positive effect on unemployment rate, especially with the promises made by the ministry officials before the start of the first campaign, highlighting again the security footprint that shaped the campaign. It can be observed that ABdulrahman Al-Zamil, the Director of Saudi Chambers of Commerce, also focused on this security side in his statement to the media, where he said that “enforcing the regulations is a must on all levels, whether it’s against irregular foreign labor, businessmen or Saudi individuals,” adding that the campaign is beneficial to the private sector.
Conclusion
After sector.al-Kahfi 2015
Conclusion
After more than year of the end of comprehensive campaign carried by the Ministry of Labor and Ministry of Interior to correct the status of irregular workers, and deporting more than a million, numbers do not show an improvement in unemployment rate, as it has been hovering slightly below 12% despite the many promises officials made. On the contrary, the campaign has resulted in the increase of prices of many goods and services and negatively affected the ordinary Saudi citizen - the primary consumer of such goods and services, in the first place. The direct economic outcomes have not differed from the compulsory Saudization policies adopted by the government since the 90s, which indicates the unlikeliness of finding a solution for unemployment without reducing the dependence on oil as an engine for economic growth. Indeed, if the goal of the campaign is finding a solution for the Saudi national having troubles getting a job -despite having high educational qualifications-, it has failed to achieve that until the writing of this paper in April 2015. This is unexpected to change since the answer of this dilemma requires creating new job opportunities that suits the education levels of nationals through a comprehensive economic strategy that works on finding projects that exploit the human resources of the young generation of thee Saudis and the economic peculiarities of the regions. regions.Al-Khalifa 2013 A sustainable developmental policy in light of a durable knowledge-based economy is the only way to guarantee a solution for the problem of unemployment, in contrary to the security campaigns that portray foreign labor as the source of troubles and that deporting violators will be the fast solution for a long-term deep-rooted problem.