Saudi Affairs
The government has started to recognize that the unemployment of hundreds of thousands of young Saudis presents Saudi society with social nightmares that require more drastic measures than the ones taken so far. Most of the foreign employees and laborers in the country are employed, while most young Saudis are not.
Every year more than 150,000 Saudis enter the job market, mostly lacking the skills required by the employers.
Employers do not seem enthusiastic to be made responsible for problems outside their own interests, especially since the government in its desire to expand the domestic private market accepted that foreign recruitment should continue. But now the government is establishing training programs for Saudis in direct collaboration with the private sector.
These programs, like the Human Resource Development Fund, take into consideration the needs of the employer and the employee. However, more needs to be done. Our annual rate of population growth exceeds 3.75 percent, which is considered the highest in the world. The educational system does not produce enough people who can use their brains and hands to be productive.
For this country to figure in the list of competitive international investment opportunities, it needs to be truly friendly to foreign investors. The Saudi manufacturing sector desperately needs to move up the value chain with an ever more skilled and sophisticated workforce. The current slow investments in productive projects are not a cyclical phenomenon that will turn around as soon as world recovery sets in. Apart from oil and pilgrimage, the current Saudi economy is mainly consumer import orientated. But it has enormous investment opportunities.
Sharply lower labor and production costs force international operators either to close down or shift to areas of low-cost production.
Over the longer term, little short of a complete transformation in the skills and quality of the local domestic workforce is required. Current arrangements merely provide patches on the face of the national economy until the government improves the budget allocation for technical training from two thousandths of one percent of the total education budget to a full-fledged training budget.
It becomes a logical development for technical training to be considered a profitable investment activity. Private schools and universities are spreading across the country.
Foreign training institutes should be encouraged to investigate profitable opportunities for providing the Saudi economy with the right skills to prosper. The size of the market may be no less than three million candidates in no less than twenty-five specializations. I cannot think of a better Saudi win-win economic activity than private joint ventures in training Saudis. Furthermore, I can guarantee the support of the Saudi training authority. Tell me how this dream can be realized and greater prosperity will become visible.
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