It’s been almost two years since thousands and thousands of expats in Saudi Arabia started making their exit due to the Kingdom’s newest Saudi Nationalisation Scheme (also known as Nitaqat). According to the saudization policy implemented by the Ministry of Labour & Social Development, companies must hire Saudi nationals and expats on a quota basis, which favours the former. Almost two million expats have left Saudi Arabia since 2017 within the scope of a 2020 National Transformation Program, with no signs of an end to the mass exodus.
Why this loss of expat workforce
Even though the campaign of saudization has been active since the mid-1980s, it is over the past five years that the Saudi government, under Crown Prince Mohammed bin Salman, has taken strict measures to make specific job sectors exclusive to Saudi nationals. Seventy-two professions have been reserved for Saudis, including human resources roles, jobs in the financial services, and in sales. The objectives behind saudization are to reduce unemployment among Saudis and to diversify the Kingdom's economy, which is vastly dependent on oil.
To discourage expats from staying in or coming to Saudi Arabia, the government has imposed on international employees monthly fees ranging from $26.7 to $107 per dependent. Besides, companies that employ more expats than Saudi nationals are required to pay a penalty charge between $107 to $213 per employee.
Mohammed from Yemen was an expat in Saudi Arabia for four years — between 2014 and 2018. He was working as a food photographer in Riyadh for a marketing company of 120 employees. Now, he runs his business in Rwanda, and comments on the mass exodus of expats from Saudi Arabia: “Employees are forced to leave or leave voluntarily due to the fees that the government has imposed. Before the new scheme, employers used to pay these fees, which were up to $500 per year. Now, every month, an employee must pay for every member of their family. And they are not allowed to leave the country until they have paid all the amount due. In my opinion, this policy isn't for the government to make money, but an indirect way to put pressure on expats and immigrants to leave Saudi Arabia and for the King to show his people that he looks after them.”
The consequences of the mass exodus
Having been given very few incentives to stay, expats continue to leave Saudi Arabia in herds. However, many of the job positions they vacate aren't taken up by Saudi nationals and remain unoccupied either because Saudis aren't willing to undertake non-white-collar jobs or they aren't qualified for certain types of employment in medical, accounting, and IT sectors. So, while expats feel no longer wanted in Saudi Arabia, businesses fear that to meet the quota set by the government, they will fill many positions with unqualified employees. To tackle this problem, the Saudi Arabian government has implemented new eligibility requirements on its international scholarship programs for Saudi nationals who wish to study abroad and has started taking measures to encourage women to enter the workforce.
Mohammed says: “Depending on their country of origin, expats in Saudi Arabia specialise in different fields. For example, Syrian people are mostly known for their businesses in the hospitality industry; Indians and Egyptian are usually working as physicians and technicians, Sudanese are into farming, Lebanese are skillful constructors, and Yemeni are into trade. Who will take all these jobs now?”
Also, many shops and small businesses for gold, cell phones, and perfumes have been forced to shut down as part of the effort to restrict access of certain sectors to Saudi nationals. Last but not least, the real estate market is suffering from decreasing prices, especially rentals in compounds and blocks of flats, which are predominantly preferred by expats.
The future of expatriation in Saudi Arabia
For many years, Saudi Arabia has been a popular expat destination for workers from around the world. According to UN data, in 2017, immigrants in Saudi Arabia made up 37% of the total population.
Mohammed comments: “The good thing about Saudi Arabia was that if you had a job, the money was enough also to start saving. And the benefits such as health insurance, accommodation, and transportation are excellent. My salary was enough to save money and send it to my family in war-torn Yemen. In the last half year in Saudi Arabia, I saved money to move to Rwanda.”
With the saudization policies and the newly launched online e-Visa valid for visitors from 49 countries, Saudi Arabia is willing to shift from an expat destination to a hospitable tourist hub. The country is making efforts towards opening itself to the world by tapping into new sectors such as the entertainment and sports sectors. But is Saudi Arabia prepared to respond to all the needs stemming from its diversification without the international expertise and workforce?
