Saudi Unemployment Rate Above 12 Percent, CDSI Says

The unemployment rate in Saudi Arabia has reached 12.1 percent in 2012, according to new numbers published by the Central Department of Statistics and Information (CDSI). The stats show that there are 602,853 Saudi nationals who are unemployed, 243,983 of them are men. But the unemployment rate is far higher among females (36 percent) than males (6.1 percent). CDSI says 73.3 percent of unemployed women have a college degree.

The Saudi government has worked in recent years to tackle the problem of rising unemployment by encouraging more women to join the workforce. They have limited work in some retail jobs to women and announced plans to lift the ban on female lawyers arguing cases in courtrooms. These moves were faced with resistance from religious conservatives who accuse the Minister of Labor of pushing a liberal agenda aiming to “Westernize” society through gender mixing at the workplace. Hundreds of clerics have visited the Ministry headquarters in Riyadh during recent weeks to protest women employment policies implemented by Fakieh.

“We want to open a whole new world for women, and at the same time will be in tune with our culture with how we’d like our families to continue to be,” he told the Washington Post last November. “We don’t want necessarily to copy a Western lifestyle.”

The government started last year to give unemployment benefits for those looking for work under a program called “Hafiz.” They have also tried to make jobs at the private sector, currently dominated by foreign workers, more attractive to Saudi nationals by decreasing work hours and increasing the minimum wage.

More controversially, MOL decided to fine firms with too many foreign workers, doubled the annual fees of work permits for companies who have less than 50 percent Saudization rate to SR 2,400. This resulted in a backlash from business owners who complained that the increase would hurt their interests badly. Economists are divided over the effect of this step as some of them see it necessary to push the Saudization efforts while others say it would lead to a rise in prices of consumer goods and raise the cost of government project contracts.

A recent report by Riyad Capital suggested that the work permit cost increase should be benign even in businesses with a high percentage of foreign workers. Dairy giant Almarai for example had 4,800 Saudi staff out of a total 15,000 headcount in 2011. “We estimate an increase in labor cost of about SR 6.5 million, or +0.5 percent,” Riyad Capital said.

Despite objections by some business owners, MOL is adamant that they will not reconsider the levy on foreign workers. MOL spokesman Hattab Al-Anazi said in a statement last month that “the ministry will not go back on its implementation of the Council of Ministers’ decision No. 353 concerning the higher fees on expatriate laborers when their number exceeds Saudi workers.”