Saudi Arabia’s enforcement of labor localization rules has sent many Indian workers hurrying home. How severe will the impact be?
Saudi Arabia’s Nitaqat law, designed to localize labor, could cost hundreds of thousands of expatriates their jobs. The prospect of unemployment and even deportation has triggered a wave of anxiety among Indian expatriates in the desert kingdom.
Last month, airports in the southern Indian state of Kerala – the majority of the Indian workforce in Saudi Arabia is from this state – saw hundreds of downcast Indians returning home with their personal belongings.
Among them was Ashraf Ubaidullah (name changed on request), who was running a small grocery shop in Jizan that is “sponsored” by a Saudi. “I was unable to implement the Nitaqat law as I could not afford to hire Saudi workers,” he told The Diplomat on his return to India. A Saudi laborer expects wages that are at least three times higher than those paid to an expatriate worker.
Following the Saudi police crackdown on business establishments late last month, Ubaidullah decided to leave the country, “rather than face deportation.” “There are many more Indians like me in Saudi Arabia,” he said, warning of “an exodus” from there in the coming months.
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. Based on their level of compliance, establishments are categorized into Blue, Green, Yellow and Red groups – with Blue and Green businesses having the highest localization ratios, Yellow falling in the intermediate range and Red the least compliant. While Blue and Green establishments are being rewarded and Yellow given more time to implement the changes, companies in the Red zone are under pressure.
According to unnamed official sources cited in the Saudi media, “there are 340,000 businesses in the market with zero Saudization.”
Alwyn Didar Singh, secretary-general of the Federation of Indian Chambers of Commerce and Industry pointed out recently that if each of the 340,000 businesses were to hire an average of two or three Saudis it could result in “displacing some half to one million expatriates, if more jobs are not simultaneously created.”
Many of those “displaced” by the Saudization could be Indians, who constitute the largest group among the expats in Saudi Arabia.
Saudi Arabia has depended on foreign labor for decades. This has left a large number of its own nationals unemployed. The private sector in particular has preferred to hire foreigners. According to figures provided by the Saudi Ministry of Labor, the kingdom’s private sector provides employment for 6.5 million expatriates, compared with 700,000 Saudis.
It is to tackle unemployment by forcing the private sector to hire locals that the government enacted the Nitaqat law three years ago, and is now acting to enforce it.
Indians, who constitute 20 percent of the 7 million-strong 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.
Photo Credit: Flickr (moaksey)
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http://www.indian-affair.blogspot.com/
An absolute morachy needs to keep its subjects happy. Whether the locals work or not is secondary. What matters is that they get a salary so that they can spend on basic needs and can buy petrol at 20 cents a liter.
aady
Ahmado Khan u stay in ur home lazy guys dont talk about us u dont deserve to say anything to us k just see dont argue.Well as far as americans are concerned they just need to be care full from you guys gulf and other areas full of perpetrators
Schminner
Just wait until the Saudi oil are dried up….
mj
ok we wil wait
wisecounsel
Hi Guys, I have been to Saudi myself albeit for a short span of time. Its because of expats that the Saudis are enjoying their petro dollars.Even the locals dont trust the Saudi taxi drivers who are known to drive rashly and also have a bad habit of short changing customers or worse.. even robbing/killing them.
There is a law where Saudis are supposed to employ locals in all business establishments. However, these guys dont work and just sit for 7-8 hours… I have observed it and take home the salary.
In the end, its their country and its not a one wa street as mentioned.The Saudis need Indians as much as Indians need the Saudis.
As a parting shot to my erudite Americans and Europeans, We Indians have not sought favours from you and have come to your country and contributed to the growth. In fact we are among the richer class in your countries due to our honesty,work ethics,intelligence and abiding the rule of law.You can see that in NASA,most of the scientists are Indians.
In case you dont give us H1B visas, no probs, all the IBM's and Microsofts of the world will lose their competitive advantage to the Japanese and Koreans as is happening to Apple now..Silicon Valley will lose its sheen if it were not for us hardworking Indians.
But that is another argument that I will keep for later.
Kanes
If this doesn't happen by end June 2013, it will certainly happen sometime soon. Better to be prepared than face it.
US American
Obama are you taking notes? We need a similar law here in the states to stop the Indian H1B invasion.
Uminngrad
What you need is the so called Local Americans finishing their college with some respectable degrees (Not some lame degrees/courses like Philosphy, Art history, American studies etc). I am an Immigrant with thriving Orthodontic practice in California and I did not steal an opportunity from the local students. I put in 8+ years in school and it is paying off now. Remember, flipping burgers is not a career.
Cat Carpenter
I can well understand the need for labor localization. I live in USA, State of Texas. There is an all out war going on between Mexico and U.S. border states. Mexicans have been coming over the border illegally for years. The problem is so bad it is threatening our financial future. Many are pregnant and come here to have the babies and are given financial assistance. Our Texas law enforcement officers are risking the lives to stop the Mexican drug cartel
But….
@Cat
It's clear you do not care for Mexicans.
—
The Diplomat censored my original post. It's probably best to move on. Thanks to all!
Ahmado Khan
It's their nation. It's up to them to provide jobs for their own citizens. Indians, stay in India.
The researcher
Who are you to tell us where to stay?? They have just changed a law they didnt ask Indians to leave their country!! Keep your personal emotions to yourself!!