Saudi’s Shoura Council Criticises Nitaqat System

Saudi Arabia’s Shoura Council members have criticised the labour ministry’s Nitaqat programme and said that it has failed to reduce the rate of unemployment among citizens.

“Companies manipulate the system to give the impression that they have helped Saudis get employed,” Saeed Al-Asheikh, a member of council was quoted as saying in Arab News.

He also said that the Human Resource Development Fund’s (HRDF) achievements have been unsatisfactory.

“Unemployment rates rose to 12.5 per cent in 2012 despite huge amounts of money (SAR12 billion) invested with the fund,” he said.

The HRDF is an independent body that was established by the government to facilitate the employment of Saudis into the country’s private sector.

Another Shoura Council member, Fahd bin Juma, said that benefits of the employment programme are heavily concentrated on major cities and are yet to trickle down to smaller cities.

The council members have also said the fund’s investments, which exceeded SAR12 billion, have provided poor returns.

The HRDF has spent around SAR90 million on plans and studies, according to Arab News.

The Nitaqat system, a scheme that penalises companies based on the percentage of its expatriate employees, has also been subject to criticism by economic experts.

Juma said in an interview with Al Arabiya last year that Nitaqat’s existence is important but not sufficient to create employment among locals.

“These jobs are always there for Saudis anyway, and they don’t desire them.”

The Kingdom’s official unemployment rate is said to be around 11.8 per cent, but economists estimate that only 30 to 40 per cent of working-age Saudis hold jobs or actively seek work.

Nearly one million foreign workers, out of roughly nine million, are estimated to have left the Kingdom from March to November 2013, due to the non-renewal of visas and a crackdown on illegal workers. The initiative reportedly resulted in the creation of 600,000 jobs for Saudi nationals.

Saudi Arabia recently announced a decision to penalise companies that practice fake nationalisation to avoid being charged under the Nitaqat system.