Saudi Gazette report JEDDAH – Starting this Hijra year (Nov. 15), private sector firms that employ more foreigners than Saudis will have to pay a fine of SR2,400 ($640) a year for each excess foreigner, the Labor Ministry said in a statement Tuesday. The money generated from the fines will go to the Human Resources Fund and will be used to train Saudi youth for jobs, Deputy Minister of Labor for Planning and Development Moufarrej Haqbani was quoted as saying in the statement. The fines, however, will not be applied for foreigners with Saudi mothers, citizens of other Gulf Cooperation Council countries or household help, the statement said. “The aim of this decision is to increase the competitive advantage of local workers by reducing the gap between the cost of expatriate labor and local labor,” it said. The Ministry of Labor is trying to change the private sector's culture from one of “importing labor from abroad to one of developing national talent that is needed by the sector,” said Haqbani. The decision will reduce the recruitment of foreign workers and curb the violation of sponsorship regulations where some workers take up various jobs, disrupting the demand and supply balance, he said. Each country gives priority to its citizens when it comes to the creation of job opportunities, Haqbani said. Roughly nine in 10 employees of private companies in Saudi Arabia are expatriates, according to official estimates. Firms reportedly prefer to hire foreigners, many from south or southeast Asia, because they command lower wages than locals. This has led to a high unemployment rate among Saudi citizens, which is about 10.5 percent. Saudi Arabia has a population of over 27 million, of which about nine million are believed to be foreigners. In order to press private firms to hire more locals, the government last year introduced a quota system which imposes minimum numbers of Saudi employees on companies depending on their size and sector. Firms which do not comply face restrictions on obtaining visas for their foreign workers. The Ministry of Labor said in September that it had created 380,000 new jobs in 10 months through that system. In January, Labor Minister Adel Fakeih said the Middle East's largest economy needed to create three million jobs for Saudi nationals by 2015 and six million by 2030, partly through localizing work now done by foreigners. – With agencies
