In an effort to provide more jobs to Saudi Arabian citizens, the kingdom will ban foreign workers from selling and maintaining mobile phones and accessories for them.
Stores selling mobile communications devices will have to ensure that at least 50 per cent of staff doing such work are Saudi citizens in three months’ time, the ministry said. Six months from now, the required ratio will rise to 100 per cent.
Minister issues orders
Minister of Labor Mufrej Al-Haqbani issued orders on Tuesday for the total Saudization of all sales outlets and maintenance shops of mobile phones and their accessories within a period of six months, the Saudi Press Agency reported.
According to the new directive, the mobile shops will start implementing Saudization from March 10.
All mobile sales and maintenance shops have to replace 50 per cent of expat workers with Saudi men and women within three months, beginning from June 6 and 100 per cent within six months, starting from Sept. 3.
Al-Haqbani said the new decision will be implemented in cooperation with the ministries of commerce and industry, municipal and rural affairs, and communications and information technology.
The ministry said that Saudization of mobile phone outlets will be implemented in all the regions and cities of the Kingdom without any exception and it will be applicable to all sizes of shops.
Policy to improve local employment rates
The government is under heavy pressure to create more jobs for Saudis as the economy slows because of low oil prices, threatening to boost unemployment, which was officially 11.5 per cent among local citizens last year.
Young Saudi men and women will be provided training in taking up jobs in mobile sales and maintenance during the grace period, the ministry said.
Some jobs such as human resources managers and security officers have long been reserved for Saudi nationals, but the ministry’s decree suggests the government is now willing to intervene more aggressively in the labour market to get Saudis into work.
Indians to be affected most
The vast majority of jobs in Saudi Arabia’s retail and services sectors are currently held by foreign workers from South-east Asia and the Indian subcontinent; they are generally paid much lower wages than Saudi citizens.
Indians in particular will be amongst the most affected, as mobile phone sales and repairing is one of their major domains.
With low-profit margins and a larger number of people opting to buy from high-end supermarkets, the smaller mobile phone shops in GCC are already facing a challenging time.
The expatriate employees working in such small shops are mostly paid low salaries ranging from SAR 1000 to 3000. Since it is impossible to hire a Saudi for such salary, a number of shops owners, mainly Indians, would rather opt to shut down the business.
The new law does not specify what will happen to the existing workers. It is likely that most of them will have to leave the country, unless they manage to find another job.
Earlier, hundreds of thousands had lost their jobs after introduction of ‘Nitaqat’ policy.
Big blow after Nitaqat
Enacted in 2011, the Nitaqat law makes it mandatory for all businesses in the private sector to reserve at least 10 percent of jobs for Saudi nationals.
The ones most affected were small businesses like groceries and cafeterias who could not afford to employ a national. A Saudi worker expects wages that are at least three times higher than those paid to an expatriate worker.
As per government estimate, around 1.41 lakh Indians left Saudi Arabia between April 6 and November 3, 2013, following the enforcement of Nitaqat law.
Saudi Arabia says that it has completed regularisation of nearly four million foreign workers in the second quarter of 2013 as part of Nitaqat programme, with 1.18 million expats choosing to change their profession.
Saudi Arabia has always depended on foreign labour for decades. The private sector in particular has preferred to hire foreigners. This has left a large number of its own nationals unemployed.
Indians, who constitute 20 per cent of the expatriate population in Saudi Arabia, are understandably worried about the impact this law will have on their lives. Many have been working here for years and support large families back home.