RIYADH — Several economists in the Kingdom have said the practice of Tasatur (when foreigners run a business in the name of a Saudi citizen) will drain the national economy if the practice is not stopped by authorities, Al-Madinah daily reported. The secretary general of the Committee on Banking Awareness and Media, Talat Hafiz, said Tasatur businesses are valued at billions of Saudi riyals and mostly restricted to the retail sector which is a profitable sector that attracts many expatriates. “An estimated 2.4 million expatriates work in this sector. That's why the Saudi government has decided to take drastic measures to deal with this problem,” Hafiz told the newspaper. Some of the measures taken include the enforcement of Nitaqat and Hafiz programs and setting the minimum wage for Saudi citizens in the private sector at SR3,000 a month. “Undoubtedly, these measures will combat the practice of Tasatur,” Hafiz said. Experts say the practice does not only have negative economic and social effects but also poses a security threat because many Tasatur businesses are run by foreigners who may also engage in criminal activities. Tasatur is one of the biggest obstacles facing economic growth and development, according to the University of Taif's accounting professor Salim Bajajah. He called on the Ministry of Commerce and Industry to launch an extensive campaign to curb the phenomenon and raise citizens' awareness about its negative impact on the national economy as well as society as a whole. “The fact that this practice has been on the rise shows that there are some citizens out there who agree to open a business in their names and allow foreigners to run it in exchange for a cut of the profit. These citizens are aiding and abetting these expatriates to violate pertinent laws,” he said. “Tasatur also increases the incidents of commercial fraud and drains the economy because large amounts of money, estimated to be in the billions of riyals, get remitted abroad by people who run Tasatur businesses,” Bajajah added. Secretary general of Al-Ahsa Chamber of Commerce and Industry Abdullah Al-Nashwan believes the absence of a monitoring body is the main reason why Tasatur businesses have increased. “The anti-Tasatur regulations are still new and not strict enough to stamp out this practice,” he said. In his opinion, the practice has increased the country's unemployment rate because citizens are unable to find jobs in Tasatur business. He called for revising the activities of all small and big businesses in order combat the practice and put an end to Tasatur-related violations. Economist Fadhel Al-Boainain said the practice increases the demand for cash and forces businesses to hoard money and this affects the feasibility and effectiveness of state's monetary policy because the profits earned from Tasatur get remitted abroad. “Tasatur also harms small- and medium-sized businesses. One of the reasons for this are the large number of business licenses issued all over the Kingdom,” said Al-Boainain while praising Jeddah Governor Prince Mishal Bin Majed's recent decision to set up the Chair of Tasatur Studies and Cases at King Abdulaziz University. “Tasatur has reached an alarming rate and it constitutes a serious threat to security and the economy. Also, it makes it difficult for experts to lay down accurate price indicators, unemployment and economic growth rates.”
