Saudi gold and jewellery sector hit hard after expat ban

The kingdom banned the employment of expatriates in the sector in December 2017

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Saudi Arabia’s gold and jewellery sector has been hit hard by the lack of skilled Saudi nationals following the localisation of jobs in the industry, according to local media reports.

The kingdom banned the employment of expatriates in the sector in December 2017, warning shops that they will be fined SAR20,000 ($5,330) per expat worker.

It was estimated at the time that 35,000 expatriates were working in 6,000 gold and jewellery shops across the country.

However, a senior official said that the sector was affected because of the “rarity of qualified Saudi craftsmen”.

Jewellery making is generally an ‘inherited art’ and the children of Saudi goldsmiths do not have the “desire or patience to sit for eight hours or more to work on a piece of jewellery”, Abdul Ghani Al-Mahana, chairman of the gold committee in the Eastern Province Chamber of Commerce and Industry, told Arabic daily Al-Watan.

He also alleged that some expatriates were continuing to operate gold shops by resorting to “tasattur” arrangements – under which Saudis operated the stores on paper.

He claimed that Saudi shop owners supervised operations while expatriate goldsmiths worked nights “without any fear of raids by the ministry’s inspectors”.

Mahana said that tasattur in the gold sector had been going on for many years.

Read: Saudi regions commit to localisation of gold and jewellery market

He also said the Saudisation process varied from one area to another, noting that it was high in the Eastern Province while it was extremely low in Riyadh, Jeddah and Makkah.

The official also confirmed that in the past six months, the ministry uncovered up to 3,452 violations in gold and jewellery shops.

Also read: Saudi landlords go to court after several expats ‘shut shop’ and leave

Saudi Arabia has announced the localisation of several sectors in the country including in several retail and wholesale industries as it seeks to reduce unemployment among its nationals.

Read: Saudi to apply job restrictions for expats in five retail roles this week

The number of expatriates working in the kingdom reduced by close to 3 per cent in the third quarter of 2018, compared to the previous quarter, according to official data released last month.

Research by the General Statistics Authority (GASTA) found that the number of employed expatriates fell from over 9.8 million in the second quarter to over 9.5 million in Q3. That’s down from 10.18 million in the first quarter.

Read more: Saudi expat workforce shrinks in Q3 as local unemployment rate drops