Saudi Arabia needs to overhaul its labor market if it wishes to reach its goal of increasing competitiveness and diversifying the economy, said a senior executive of Manpower, a global employment services provider. Like several Gulf Arab neighbors, Saudi Arabia uses a sponsorship system - called Kafala - to regulate the inflow and residency of foreign workers, said David Arkless, the executive in charge of government relations at Manpower. “Without wholesale reforms to its labor market, including sponsoring, Saudi Arabia cannot increase its competitiveness,” he said. “The sponsorship system ... doesn't work, so we need to reform the labor policy,” Arkless said at Fourth Global Competitiveness Forum in Riyadh. “Saudi (Arabia) is developing a lot of individual bilateral treaties to bring the right kinds of skilled workers,” Arkless said. “But the 19th century labor construct in the country is doing the country no favors from a competitiveness point of view.” Bahrain abandoned the system last year.
