Saudi Arabia’s Unemployment Rate Expected to Maintain

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SEATTLE, Washington — The COVID-19 pandemic has impacted economies worldwide, and as a result, countries are experiencing high unemployment rates, diminished productivity and growing national debts. The combination of layoffs, a bleak job market and a lack of government assistance are putting many at risk of falling into poverty. Moreover, those already living in poverty are in danger of falling into extreme poverty. Even developed countries’ economies are not immune. For instance, the unemployment rate in the United States sits at 13.3% as of June 2020. Saudi Arabia is among these developed countries experiencing an economic decline, with a national GDP of approximately $749 billion. However, Saudi Arabia’s unemployment rate presents an interesting case in that, although not immune to the effects of the novel coronavirus, it does not seem to be affected. It is actually expected to maintain amid the pandemic.

COVID-19 in Saudi Arabia

Like nearly every country worldwide, Saudi Arabia has been affected by COVID-19 and is currently experiencing a strong second wave of the virus, with more than 321, 450 confirmed cases as of September 7. Aside from the heartbreaking loss of human life, one of the main concerns for governments worldwide is how the virus and its containment measures will impact the economy. With so many people quarantining and thus unable to go to work, production rates are falling. As a result, companies are forced to lay off workers, and unemployment rates worldwide are steadily climbing. These harsh economic conditions threaten those living in poverty worldwide, but especially in Saudi Arabia, where there is a sharp socio-economic division.

The Departure of Foreign Workers Opens Opportunities for Local Workers

However, a silver lining has emerged for Saudis regarding their national job market in the wake of COVID-19. Before the coronavirus crisis, an estimated 10 million expatriates lived in Saudi Arabia, making up 30% of the country’s population. As a result of the COVID-19 pandemic, many foreigners living abroad are returning to their home countries. Yet, while overseas workers’ departure may have harmed the economies of some countries, it actually may end up helping Saudi Arabia’s by keeping the unemployment rate from growing. An estimated 1.2 million foreigners, making up 9% of the labor force, will leave the Saudi job market in 2020, and approximately 323,000 foreign workers have already departed.

With the departure of overseas workers, Saudi Arabia will experience a rise in new job vacancies. Moreover, with state support for local businesses, unemployed Saudi citizens who would have otherwise been at risk of falling into poverty will have significant job opportunities.

Saudi Arabia’s Economic Goals

This economic opportunity for Saudis correlates with the government’s Saudi Vision 2030 plan for economic growth. The 2030 initiative includes “Saudization,” prioritizing Saudi jobs for Saudi workers rather than expatriates, particularly in the private sector. The ambitious goals outlined in “Saudi Vision 2030” will reduce poverty by providing affordable housing solutions and stimulating job creation.

A growing unemployment rate is antithetical to these goals. Thus, the stagnation of unemployment rates triggered by the departure of so many foreign workers will, hopefully, bode well for the country and its most vulnerable communities.

Humanitarian Organizations Aiding Employment Efforts

Along with the state’s goals, there are nonprofit organizations in place that work to combat unemployment, particularly for youths. One such organization is MiSK, established in 2011 by Prince Mohammed bin Salman, with the goal of building a “knowledge-based economy through discovering, developing and empowering young talent.” MiSk responded to youths’ concerns about the lack of job opportunities in Saudi Arabia and is actively working to improve the nation’s youth employment rate. MiSK serves 70% of the Saudi population under the age of 35 and often partners with the Saudi government and private sector firms to provide job opportunities to talented young people. The organization also brings youths’ voices to the forefront of domestic and international conversations on business and job creation.

While COVID-19 has heavily impacted Saudi Arabia, a closer examination of the nation’s job market makeup yields hope for the future. With the mass departure of overseas workers and expatriates, Saudi Arabia’s unemployment rate will likely maintain. This phenomenon, coupled with the Saudi government’s “Saudi Vision 2030” program and NGOs’ efforts, is creating job opportunities for Saudis as the country and world transitions out of a difficult time.

– Addison Collins
Photo: Flickr

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