Saudi plans to relax foreign workers’ sponsorship terms will benefit Pakistanis — envoy

An Asian laborer climbs a ladder as he works at the construction site of a building in Riyadh, Saudi Arabia. (Reuters/File)
Short Url
Updated 07 November 2020
Follow

Saudi plans to relax foreign workers’ sponsorship terms will benefit Pakistanis — envoy

  • Kingdom has announced new plans to ease foreign laborers’ contractual restrictions, abolishing a seven-decade-old sponsorship system known as kafala
  • The plans, to take effect in March 2021, will grant foreign workers the right to change jobs and leave the country without employers’ permission

ISLAMABAD: Pakistan’s top diplomat in Riyadh, Raja Ali Ejaz, on Thursday praised recently announced Saudi labor reforms that will ease foreign workers’ contractual restrictions, saying they would significantly benefit Pakistani workers in the kingdom.

Saudi Arabia announced this week that it would abolish a seven-decade-old sponsorship system known as kafala. The reforms, to take effect in March 2021, aim to make the Saudi labor market more attractive by granting over 10 million foreign workers the right to change jobs and leave the country without employers’ permission.

Saudi Arabia, which chairs the Group of 20 major economies (G20) this year, is seeking to boost its private sector as part of an ambitious plan to diversify its oil-dependent economy.

“The reforms are expected to benefit Pakistani workers and we congratulate the Ministry of Human Resource and Social Development,” Ejaz told Arab News on Thursday.

The new initiative will base the relation between employers and workers on a standard contract that needs to be certified by the government, and will allow workers to apply directly for services via an e-government portal, instead of a mandatory employers’ approval.

The ministry aims to certify the contracts of all foreign workers by the end of the first quarter of 2021.

Ejaz said the reforms were grounded in best international practices, and the new system would activate the employer-employee contractual agreement through digital documentation, which would resolve administrative glitches.

“The new initiative will alleviate the problems of those workers who sign work agreements in Pakistan and are then asked to sign another agreement in the kingdom,” Ejaz said, adding that the new system would also help Pakistani workers search for new jobs on the expiry of their contracts while still residing in the kingdom.

“We all have a sense of freedom and empowerment now,” said Javed Chaudhry, a Pakistani expatriate from Gujrat who has been working in the kingdom for the last four decades. “I have worked in Saudi Arabia for the last 40 years. It was our dream to get such a facility.”

“For the first time, I will not be under any obligation to seek approval from anyone to visit my family in Pakistan,” Chaudhry told Arab News via phone from Jeddah. “I will be able to travel more freely to see them and perform my job without undue pressure.”

Another Pakistani worker, Syed Qamar Abbas, who works in an electric equipment factory in Dammam, said the new labor policy promised more rights to workers.

“It will give us more rights and freedom. Until now, we were at the mercy of our sponsor for everything,” he said. “Now the sponsor’s name will be removed from iqama [work permit] … We will also be able to take up another job once our contract with our company comes to an end.”

Saudi Arabia’s Vision 2030 reform plan is a package of economic and social policies designed to free the kingdom from reliance on oil exports.

The currently applicable kafala system generally binds a migrant worker to one employer, a system that rights groups say leaves workers vulnerable to abuses.


Pakistan drops 8,000 MW power procurement, claims $17 billion savings amid IMF-driven reforms

Updated 18 January 2026
Follow

Pakistan drops 8,000 MW power procurement, claims $17 billion savings amid IMF-driven reforms

  • Government says decision taken “on merit” as it seeks to cut losses, circular debt, ease consumer pressure 
  • Power minister says losses fell from $2.1 billion to $1.4 billion, circular debt dropped by $2.8 billion

ISLAMABAD: Pakistan has abandoned plans to procure around 8,000 megawatts of expensive electricity, the power minister said on Sunday, adding that the decision was taken “purely on merit” and would save about $17 billion.

The power sector has long been a major source of Pakistan’s fiscal stress, driven by surplus generation capacity, costly contracts and mounting circular debt. Reforming electricity pricing, reducing losses and limiting new liabilities are central conditions under an ongoing $7 billion IMF program approved in 2024.

Pakistan has historically contracted more power generation than it consumes, forcing the government to make large capacity payments even for unused electricity. These obligations have contributed to rising tariffs, budgetary pressure and repeated IMF bailouts over the past two decades.

“The government has abandoned the procurement of around 8000 megawatts of expensive electricity purely on merit, which will likely to save 17 billion dollars,” Power Minister Sardar Awais Ahmed Khan Leghari said while addressing a news conference in Islamabad, according to state broadcaster Radio Pakistan.

He said the federal government was also absorbing losses incurred by power distribution companies rather than passing them on to consumers.

The minister said the government’s reform drive was already showing results, with losses reduced from Rs586 billion ($2.1 billion) to Rs393 billion ($1.4 billion), while circular debt declined by Rs780 billion ($2.8 billion) last year. Recoveries, he added, had improved by Rs183 billion ($660 million).

Leghari said electricity tariffs had been reduced by 20 percent at the national level over the past two years and expressed confidence that prices would be aligned with international levels within the next 18 months.

Power sector reform has been one of the most politically sensitive elements of Pakistan’s IMF-backed adjustment program, with higher tariffs and tighter enforcement weighing on households and industry. The government says cutting losses, improving recoveries and avoiding costly new capacity are essential to stabilizing public finances and restoring investor confidence.