No Easy Answers for Saudi Unemployment Problem


Despite the rapid economic growth in Saudi Arabia in recent years, the government has failed to keep the unemployment rate down. Actually, recent stats show that the employment rate is rising. Abdel Aziz Aluwaisheg tries to explain:

What happened since 2009? Economists are fond of saying that rising tide lifts all boats. According to this theory, the invisible hand of economics would automatically translate high rates of economic growth into higher employment levels. But we just saw that that we have had the opposite: Higher rates of economic growth coincided with high rates of unemployment.

It seems that the proverbial invisible hand has lost its touch in our case. Many Saudis believe that there are other forces that have prevented it from doing its magical work. First, laissez faire labor policies have ensured that whatever jobs are created are claimed by non-nationals, easily brought in from neighboring countries. Second, universities and technical schools are behind the times in providing the kind of skilled and semi-skilled labor that the new Saudi economy requires. Third, rising expectations have priced Saudis out of the labor market, as employers choose cheaper imported labor. Fourth, many Saudis prefer to work in government jobs and would rather wait for a civil service job than accept low-paying work in the private sector.