Saudi Arabia to Expats: ‘There’s Not Enough Oil for Both of Us’

Saudi Arabia to Expats: ‘There’s Not Enough Oil for Both of Us’

Ashraf, with his handsome features and candid smile, has become the target of accusations among his friends of being the harbinger of bad luck to every expatriate in Saudi Arabia. His friend, Firas, mock-apologizes to every expat worker in the kingdom for ever having helped Ashraf.

“I never expected that he would bring his bad luck with him and inflict it on the whole country and its people,” Firas jokes.

Firas (33) has worked in Saudi Arabia since 2008, when the price of oil hovered around $100 per barrel.

As for Ashraf (34) he left Jordan for Saudi Arabia in 2015, in the midst of the plunge in oil prices that began in 2014 and saw the kingdom’s source of income shed half its value. This in turn gave birth to a running joke among Firas and Ashraf’s friends; the former was dubbed a good luck charm, while the latter earned the nickname “the jinx”.

The mushrooming unemployment rates in Jordan drove the young Ashraf to emigrate in search for sustenance. He was no longer able to secure employment in his home country where the unemployment rate had soared to 15.8% in 2016, and salary rates had plummeted due to the influx of a new labor force from neighboring conflict zones, such as Iraq and Syria.

Jordan is not an exceptional case; the situation there echoes across the Arab countries, from which thousands have migrated in search of work opportunities in Saudi Arabia and other GCC states.

Since the 1970s, Saudi Arabia has been the land of opportunity for millions of expats.

Today, over 11 million expats live in Saudi Arabia, constituting 37% of the population, which registered 31.74 million, according to official data in 2016. Though, in its own right, the oil-rich kingdom has suffered its own chronic unemployment crisis among its own citizens, registering 12.1% in 2016.

Due to the rise in oil prices in 2005, the kingdom was able to abate the issue of unemployment through spending on social and leisure projects and boosting government employment, as well as educational opportunities at home and abroad.

Nonetheless, the more recent decline in oil prices, as well as the war in Yemen and the unmitigated crises and conflicts in a number of “Arab Spring” states—in which Saudi Arabia has helped prop up either their governments or their opposition—have all contributed to decreased spending and crippled efforts toward expanding government employment. Moreover, thousands of private sector workers, including Saudis, lost their jobs due to the suspension of their dues.

Saudi Arabia and World Populism

College student Ibrahim Bin Fahad (22) is calling for the deportation of immigrants from Saudi Arabia, believing them to be an obstruction to Saudi welfare, as he claims that they monopolize employment opportunities and pose a social and security threat. “What need do we have for a vendor or driver or teacher? Saudi Arabia belongs to Saudis,” he says.

His voice is not unique; animosity toward expats searching for work opportunities has become widespread, even among elite circles.

In one example of this growing sentiment, London-based Saudi newspaper Al-Hayat published a comic in January that was described by the Saudi National Society for Human Rights as violating the provisions of the Shariah and detracting from human dignity. The comic depicts foreign workers as a rat nibbling away at a tightrope on which a Saudi citizen is attempting to balance out the challenges of the market.

c0935c1f-b0ef-4808-9203-127316bd1943-1Moreover, renowned journalist and writer Jamal Khashoggi published a book entitled The Invasion of the Saudi Market, in which he calls for the liberation of the Saudi job market from the foreign workforce.

Moreover, the Saudi Shura Council discussed a proposal to impose a tax on foreigners’ remittances abroad, which recorded an average of SAR 123 million per year over the past five years.

Fadl Al-Buainain, an economist focusing on the employment market, describes this wave of animosity toward foreigners as an international phenomenon.

“You hear the opinions of the American elite, including current US President Trump, on Mexicans and immigrants in general. Moreover, the main cause behind the Brexit was the depletion of job opportunities for citizens due to the large number of immigrants,” he notes.

“The country cannot dispense with expats and the skills and expertise they offer, but quantity and quality are the crux of the matter,” he adds.

Economic expert Mohamed Al-Omran divides the types of services offered by expats in Saudi Arabis into office and administrative work (white-collar jobs), and labor work (blue-collar jobs). He believes the former should be nationalized immediately and restricted to Saudis alone, while the latter would be difficult to restrict.

Moreover, there is a third category, which is that of critical jobs, i.e. those which require unique skills and expertise. “For this final category, there needs to be a gradual plan to nationalize it while maintaining the use of foreign expertise and competencies,” he states.

‘Robbing their Future’

Hisham Saeed received his medical permit from an Egyptian university before he returned to Riyadh, where he had been raised by his father, a pharmacologist, and his mother, a pediatrician in a private hospital, since the ‘80s.

“Times have changed. I still feel welcomed by the people here, but some of them make me feel as though I’m robbing them of their future,” he says.

While there are no official statistics on the types of jobs occupied by expats in Saudi Arabia according to sector, the medical sector in the kingdom is known to be largely dependent on foreign talent.

Quotes

Share TweetIs the spike in anti-immigrant sentiment in Saudi Arabia caused by high unemployment or a surge in populist rhetoric internationally?

Share Tweet"Saudi Arabia belongs to Saudis"... the end of an era of foreign labor?

According to a report issued by the Saudi Ministry of Health in 2015, Saudis in the medical profession constitute 26% of the total number of professionals, while they comprise 38.3% of the nursing staff, and 21% of pharmacologists.

Al-Buainain describes this status quo as catastrophic, as on the one hand there is a degree of unemployment amid Saudi medical graduates. On the other, the health sector is exposed to certain pitfalls, as the vast majority of the nursing profession is occupied by Filipino nationals, while medical professionals are made up primarily of three nationalities. “If a crisis crops up between Saudi Arabia and one of these nations, the entire health sector can collapse in a day,” Al-Buainain says.

The ‘Waiter’ Minister

After he was appointed as Minister of Labor in 2004, Ghazi Al-Qusaibi embarked on the first battle towards “Saudization”; that is, imposing a quota for Saudi employees in the private sector.

Unemployment rates were steep and state funds were scarce due to the drop in oil prices and the security instability in the kingdom due to increasing terror attacks.

International pressure on Saudi Arabia was at a peak in the aftermath of the September 11, 2001 attacks, calling for the expansion of freedoms, education, and rights.

In this context, it was unprecedented for a minister to call on young Saudis to work in the services industry, as Al-Qusaibi did. Such professions had long been perceived as “beneath” the locals, who preferred stable, comfortable government positions. Yet, Al-Qusaibi took the initiative himself by working a full day as a waiter in a Fuddruckers in Jeddah, where he personally served customers.

Businessmen clung to the low-cost foreign labor force, while religious clerics waged a holy war on Al-Qusaibi for venturing into “women’s work”.

The battles continued between the minister and his opponents, until a new surge in oil prices appeared on the horizon. By June 2005, the price of oil had surged to over $60 per barrel, continuing its upward trajectory until it peaked at $147 per barrel in 2008.

However, Al-Qusaibi’s initiative had succeeded in offering private-sector job opportunities as an alternative to young Saudis’ traditional choices.

For example, Nawaf, 26, was unable to secure a governmental posting after he was forced to give up his university studies, where he had been a physics major. He was pressured by his parents to make the choice between finding a job and estrangement, and so he did not hesitate when he saw an ad for a restaurant looking to hire Saudi nationals. “I applied for the job and got it on the same day.”

Nawaf feels satisfied with his new job, particularly as it is in an international brand hotel, which could enable him to work abroad in the future.

He is one among about a million Saudi nationals who have begun working for private companies between 2011 and 2015. Statistics from the Saudi Ministry of Labor have indicated that the number of Saudi nationals working in the private sector has grown by 142%, registering 1.7 million employees, up from approximately 700,000 in 2011.

Moreover, the number of Saudi women working in the private sector increased ninefold within the same period, registering 477,000 workers by the end of 2015, compared to no more than 50,000 in 2011.

“I never imagined that there would be Saudi nationals working alongside me to serve customers,” says Shams, a Pakistani national who went to Saudi Arabia 17 years ago and currently works as a concierge at a luxury hotel in Riyadh. “Saudis constitute half of the hotel’s workforce, and are increasing daily. They carry the guests’ luggage and work in the kitchen and in room service, including the principal managers.”

At First, There Was Shock

In the 1970s, the price of oil rose from approximately $3 to $14, after the Saudi government decreed an oil embargo to pressure Israel’s allies to accept Security Council resolutions. As a result, Saudi Arabia’s national income more than tripled, rising from $10 billion to $34 billion per annum. This became known as the “first oil shock” and marked Saudi Arabia’s initial boom.

The kingdom's financial surplus accumulated in Western banks. Fearing the erosion of its value, the Saudi government set forth on a number of development projects. Subsequently, the kingdom became a hub for companies and investors all the way from Korea to the US.

The gains were quick and easy. The abundance of projects meant there was plenty to go around for everyone, while local law stipulated that all projects required a Saudi partner or sponsor, ensuring that a share of the profits would go to the citizens.

However, in the ‘80s and ‘90s, oil prices declined, adversely affecting the Saudi economy. The financial problems were exacerbated by the Gulf War, and government spending was at an all-time low, impacting everyone.

Finances were scarce, though legislations brought about gains of a different kind. The authorities had permitted those with means to trade in entry visas to the kingdom, which resulted in an enormous number being granted to foreigners. They relied on a model wherein they would sell the entry visa to workers in their countries of origin, and once the workers arrived in the kingdom, they could work freely, provided they paid a fixed monthly sum to their sponsor. The trade generated millions for sponsors, and contributed to the spread of workers of different nationalities who had arrived with no view to a specific profession or type of work.

The Era of Abundance

In 2006, the Saudi government declared the end of austerity, and announced its sizeable budget, resuming spending on development projects that had been suspended for nearly 20 years.

The government expanded into building universities and employed more people, as well as sending students on scholarships abroad. This was accompanied by flexible policies for entry or work permits for foreigners introduced by Al-Qusaibi, out of fears that development might otherwise be impeded. Thus, foreign experts and workers flooded back into the kingdom.

However, Mohamed Al-Omran does not predict that Saudi Arabia will resume the same policies if oil prices resurge to record highs. “The situation is different now. Unemployment among citizens is high, and there are 900,000 university students in Saudi Arabia and abroad who will be searching for jobs when they graduate,” he says.

Al-Buainain partially concurs, contending that the government’s Saudi Vision 2030—a set of economic and social goals that the kingdom has set to reduce dependence on oil—pledges not to repeat the same mistakes.

However, he adds: “If we try to predict the future by looking back, the rise in oil prices will translate to increased projects, which will require more labor.” The Saudi Vision 2030 does not target a specific quota of foreign labor, but the government has imposed monthly taxes starting in mid-2017 on all foreign workers and any of their dependents. The return from these taxes is expected to generate SAR 65 million for the state treasury.

Holy Blessings and Farewells

Traditionally, religious clerics have defended the rights of foreign workers. Nasser Al-Omar, a prominent sheikh and major opponent of women’s employment in mixed-gender environments, believes that foreign workers are perhaps the reason for the “blessings” that Saudi people have enjoyed.

In a sermon published on YouTube, he said that the presence of so many foreigners in the country is considered an opportunity to lead them to the correct doctrine of Islam, which they will in turn transfer back to their home countries.

Addicted to Oil

Ashraf still works in Saudi Arabia. Despite the economic conditions, he views living there as a better option than looking for work in Jordan, where businessmen inflate their profits on the backs of refugees who have suffered the ravages of war and so suffice to work for a fraction of the salaries that the locals demand. As for Nawaf, his eyes sparkle when he speaks of his plans to leave Saudi Arabia and work in an international hotel branch abroad.

The details may change, but the story remains the same. The entire region is wracked by political insecurity, oil prices have deteriorated again, and the future is unpredictable. Meanwhile, the Saudi government has declared that it will not fall hostage once again to the fluctuations in the price of oil, repeating the same slogans of the ‘80s.

Perhaps a third boom is necessary to ascertain the Saudi government’s commitment to ending its addiction to oil and addressing its internal and foreign crises.

Ibrahim Al-Mutawa'

Ibrahim Al-Mutawa' is a Saudi economic journalist who worked as a correspondent for Reuters in Riyadh and a contributing editor at Forbes Middle East. He has written several articles on the interdependency of capital and cultural norms, as well as reports on Saudi Arabia's economic history.

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