Expat workers rejoice as Saudi Arabia’s labor reforms usher in new era
Under changes to kafala sponsorship system, foreign workers in private sector will have improved job mobility
Ten million migrant workers are expected to benefit from changes under the kingdom’s Labor Reform Initiative
Updated 14 March 2021
Hebshi Al-Shammari & Hala Tashkandi
RIYADH: Saudi Arabia has ushered in a new era with historic labor reforms offering greater freedom to millions of migrant and expatriate workers taking effect on Sunday.
Under changes to the kafala sponsorship system, foreign workers in the private sector will have improved job mobility, and be able to change jobs and leave the country without employers’ consent.
The dramatic overhaul — part of the Kingdom’s efforts to build an attractive jobs market — also will allow expat workers to apply directly for government services, with their employment contracts documented digitally.
As many as 10 million migrant workers are expected to benefit from changes under the Kingdom’s Labor Reform Initiative (LRI), intended to foster “a competitive and fair working environment.”
The initiative will help foreign workers acquire residency status that is not tied to a specific employer, and will allow job mobility as well as exit and re-entry visas while protecting the rights of both employee and employer.
Expat workers have greeted the reform package enthusiastically, saying it offers them greater choice and support in employment.
“This is one of the best things to have happened since I came to work in Saudi,” Imroz Abdulrahman, an Indian expat who has been living in the Kingdom for five years, told Arab News.
“I remember four years ago, when I wanted to leave my former employer and go to work for another family, the process was very complicated and difficult for everyone involved. The problems took months to resolve.”
He added: “This is a great development and will help a lot of people. I am happy to have more control over where I can work and knowing that people like me will have more support in future.”
However, Abdulghani Al-Ansari, chairman of information technology firm Bayt Al-Edarah, said that the labor reforms are a “big challenge” for private sector SMEs (small and medium-sized enterprises), adding that the government sector is leading the overhaul as part of the Vision 2030 objectives.
As many as 10 million migrant workers are expected to benefit from changes under the Kingdom’s Labor Reform Initiative (LRI), intended to foster ‘a competitive and fair working environment.’
“The private sector is still absorbing the changes,” he told Arab News.
Employers will be required to digitally document employee contracts to reduce the disparity between Saudi and expat workers.
“Today there is a big challenge ahead of us in terms of developing the human resources in SMEs, which are finding it difficult to absorb the concepts and mechanisms of the initiative easily.”
Al-Ansari said that he hoped SMEs will be given six months to adapt to the new rules.
“SMEs do not have laws protecting their secrets, meaning that the secrets of a company will go to another competitive company,” he said.
Al-Ansari, who led the human resources committee at the Madinah Chamber of Commerce, said the labor market is changing dramatically.
“However, minds and skills do not have a nationality or a race, and the private sector believes in profitability and competency, meaning that diversity is a good thing and will benefit the national economy,” he said.
Gloria Calinao, a domestic worker who has lived Saudi Arabia for 10 years, said: “I remember how complicated the kafala process was. I wish the new rule applies to domestic workers too so that they can also enjoy job mobility.”
Two government portals, Absher and Qiwa, have been designated for the reform procedures.
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Uzbek president performs Umrah during official visit to Saudi Arabia
The Uzbek president had arrived in Jeddah on Wednesday
Was received by Saudi Crown Prince Mohammed bin Salman
Updated 19 August 2022
MAKKAH: The President of the Republic of Uzbekistan Shavkat Mirziyoyev performed the Umrah pilgrimage on Thursday, the Saudi Press Agency (SPA) reported.
The president was received by several officials from the General Presidency for the Affairs of the Grand Mosque and the Prophet’s Mosque and from the Special Force for the Security of the Grand Mosque upon his arrival.
Mirziyoyev’s official press service shared photos from the president’s pilgrimage on Twitter.
The Uzbek president had arrived in Jeddah on Wednesday, where he was received by Saudi Crown Prince Mohammed bin Salman.
The pair held a meeting and discussed bilateral relations and cooperation in various fields, in addition to reviewing a number of issues of common interest.
IMF sees Saudi inflation contained at 2.8% as GDP growth hits decade-high
Increase in interest rates is expected to have only a limited impact on the Saudi economy, says IMF
Saudi Arabia is taking impressive steps to improve the business environment - says global lending body
Updated 18 August 2022
RIYADH: Saudi Arabia’s gross domestic product is expected to grow at the fastest rate in almost a decade at 7.6 percent with inflation likely to remain at 2.8 percent in 2022, the International Monetary Fund’s Article IV Consultation report has predicted.
Saudi Arabia is rebounding strongly from the pandemic-induced recession, driven by the Kingdom’s pro-business reforms and higher oil prices, it said.
Despite higher prices for imported commodities, the inflation rate in the Kingdom will be contained at 2.8 percent in 2022, as the central bank tightens policy in line with the US Federal Reserve, the report added.
“Liquidity and fiscal support, reform momentum under Vision 2030, and high oil prices and production helped the economy recover with robust growth, contained inflation and a resilient financial sector,” the IMF said in a press release.
The proportion of Saudi women in work has doubled in the past four years to 33% in the first quarter of 2022.
83 percent of the adult population now own a bank account as of 2021, up from 71 percent in 2019.
At a press conference on Wednesday, Amine Mati, assistant director of the IMF, predicted that Saudi Arabia is expected to attain a budget surplus of about 5.5 percent of its gross domestic product, as its surplus in the second quarter hit $21 billion.
Mati elaborated that effective utilization of the Kingdom’s growing surplus will be achieved by making sure that the budget allocations are respected. He added that social spending should remain in line with the increase in surplus, which would then be re-injected into the economy.
“Implementing a fiscal rule will help sustain a fiscal anchor over the medium term and integrated asset liability management framework will help the government assess Saudi Arabia’s fiscal stance and position,” said Mati.
The IMF report added that the increase in interest rates is expected to have only a limited impact on the Saudi economy.
When addressing the rising inflationary pressures, Mati stated that “the exchange rate peg to the US Dollar continues to serve Saudi Arabia.”
“Inflation is contained, despite increased international commodity prices, because of low pass through,” said Mati. “The external position is expected to strengthen substantially, with the current account surplus reaching levels not seen in a decade.”
The IMF report added that the increase in interest rates is expected to have only a limited impact on the Saudi economy.
Mati explained that the increase of the value-added tax from 5 percent to 15 percent in the middle of the COVID-19 pandemic was essential in promoting non-oil revenue growth, and noted that tax administration measures also help sustain and accelerate tax revenues.
According to the report, the Public Investment Fund should focus on high return projects with private involvement, as it continues to implement giga-projects.
The report added that Saudi Arabia is taking impressive steps to improve the business environment, which will attract foreign investments.
It further stated that the proportion of Saudi women in work has doubled in the past four years to 33 percent in the first quarter of 2022, exceeding the 30-percent target set under the Vision 2030 plan.
Improvements in tax policy and revenue administration to raise more taxes from non-oil activities will help support fiscal consolidation in the Kingdom.
“Priorities to foster a more inclusive and green economy include increasing further women labor force participation, making sure PIF interventions play a catalytic role, strengthening governance, and rolling out the Saudi green initiative,” the IMF said in the report.
The impressive pace of digitization in the Kingdom has the potential to boost productivity and overall growth, it added.
“The surge in digital account openings and online mobile financial transactions during the pandemic has helped in improving financial inclusion — 83 percent of the adult population now own a bank account as of 2021, up from 71 percent in 2019,” it said.
Speaking at the conference, Mati stated that the advancement of digitalization translates to a more educated workforce that is better equipped for following up on future developments, which positively impacts the future of FDI.
According to the IMF, the Saudi Green Initiative, which was launched in 2021, requires policy measures to reduce greenhouse gas emissions and support greener growth.
The report concluded that Saudi Arabia’s economic outlook is strong, and the Kingdom’s long-term prosperity strongly depends on sustaining the reform momentum.
Saudi-US military exercise ‘Native Fury 22’ continues in the Kingdom
The exercise, involving the Royal Saudi Armed Forces and the US Marine Corps, began several days ago in the western city of Yanbu
It includes a number of scenarios and drills focusing on mobilization, deployment and logistics operations
Updated 18 August 2022
RIYADH: Native Fury 22, a military exercise in the Kingdom involving the Royal Saudi Armed Forces and the US Marine Corps that began several days ago in the western city of Yanbu, continued on Wednesday, the Saudi Ministry of Defense said.
It includes a number of scenarios and drills focusing on mobilization, deployment and logistics operations. It also includes communications, field medicine, a life-saving combat exercise, shooting with live ammunition, and supply and evacuation operations.
The exercise is hosted by the Kingdom with the participation and support of several ministries and other official organizations. The aim is to give personnel an opportunity to practice and train in the implementation of bilateral military, operational and logistical plans; strengthen Saudi and American military coordination and partnership; improve joint-working capabilities; and gain experience in the use of the Kingdom’s military bases and road networks, the ministry said.
“It also aims to train in the integrated government work to implement mixed military exercises,” it added.
Native Fury 22 is one of several military exercises conducted by the Saudi Armed Forces throughout the year with allies to raise levels of combat efficiency, gain field experience, and work on standardizing military concepts and terminology among the participants.
INTERVIEW: Saudi Arabia, Uzbekistan have ‘similar clear visions for progress,’ Uzbek Deputy FM Furqat Sidiqov tells Arab News
Saudi Vision 2030 plan and ‘New Uzbekistan’ road map have many similarities, says Furqat Sidiqov
Sidiqov spoke to Arab News in Jeddah ahead of President Shavkat Mirziyoyev’s state visit to Saudi Arabia
Updated 18 August 2022
JEDDAH: There are striking parallels between Saudi Arabia’s Vision 2030 reforms agenda and the Uzbek government’s bold transformation plan, New Uzbekistan, according to Furqat Sidiqov, the Uzbek deputy foreign minister.
Speaking a day before the arrival on Wednesday of Uzbek President Shavkat Mirziyoyev in the Kingdom for a state visit — the first by a leader of the country since Islam Karimov’s visit in 1992 — he said that these shared visions augur well for the future of bilateral trade and cooperation.
“Saudi Arabia has the capabilities to achieve its Vision 2030 goals,” Sidiqov told Arab News ahead of Wednesday’s meeting of the Saudi-Uzbek Business Council, hosted by the Uzbek consulate in Jeddah.
He added that the reforms and road maps the two nations have developed are similar, representing clear visions for progress, as are the young and dynamic populations of the countries.
“Both nations are working closely and moving forward in joint cooperation within the framework of our strategies,” Sidiqov said. “We are closely following the Kingdom’s ambitious Vision 2030 strategy and we support its bid for Expo 2030.”
Over the past five years, he explained, Uzbekistan has implemented a domestic development strategy aimed at easing its transition to a market economy, which has offered fertile ground for the growth of small- and medium-sized enterprises and a more diversified economy.
He said the strategy echoes that of Saudi Vision 2030, which has opened up the Kingdom’s economy to capitalize on new sectors beyond hydrocarbons and actively encourages entrepreneurism, along with the development of technical skills and creativity among its young population.
For decades, Uzbekistan relied heavily on just a handful of staple exports, including cotton, gold, oil and gas. Eager to diversify its sources of revenue, the country has opened up to foreign investment in agriculture, food security, energy, information technology and other sectors.
On Wednesday, in keeping with their complementary visions, Uzbekistan and the Kingdom signed more than 10 investment agreements worth SR45 billion ($12 billion).
Among them was a 25-year deal, worth $2.4 billion, for Saudi utility developer ACWA Power to build a 1,500-megawatt wind-power project in Uzbekistan, to help the country achieve its goal of sourcing 40 percent of its electricity needs from renewable sources by 2031.
Uzbek officials said that in recent years, Saudi investments in various sectors of the Uzbek economy have increased significantly. There are now 38 joint ventures, 20 of which involve direct Saudi investors. Still, Sidiqov said, there is the potential for even closer business cooperation, particularly in food processing and distribution.
“The numbers don’t reflect the capabilities of the two countries,” he said. “We’re working with the Kingdom to raise the number of joint ventures.
“Agriculture plays an important role in Uzbekistan’s economic development and we’re one of the top nations in food production, food security and we have the capabilities to export food products, organic fruits and vegetables to the Kingdom.
“The plan is to have the Kingdom become a midway station for food processing and packaging, to ready them for export to other countries.”
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Although they do not share a border, Saudi Arabia and Uzbekistan have been linked by religion, knowledge and culture for hundreds of years. Among the historical figures who traveled and studied across the Arab and Muslim worlds are four who hailed from places that are part of modern-day Uzbekistan: physician Ibn Sina, mathematician Muhammad ibn Musa Al-Khwarizmi, and Islamic scholars Imam Al-Bukhari and Imam Al-Tirmidhi.
The exchange of ideas and cultures continues in the modern era thanks to the expansion of air travel between Uzbekistan and Arab countries, notably Saudi Arabia, and more flexible visa rules.
“To further boost the exchange of cultures, direct flights will begin in October, via Flynas and Uzbekistan Airways, and Saudis will be exempt from entry visas for a 30-day stay,” said Sidiqov.
Present-day Saudi-Uzbek cooperation extends far beyond trade and cultural exchange into the diplomatic sphere, guided by shared interests in security and humanitarian efforts across the wider region.
In the year since the Taliban returned to power in Afghanistan following the US military withdrawal from the country, regional powers such as Uzbekistan have sought to engage with the new government in Kabul to assist the Afghan people in their time of hardship.
“The humanitarian crisis in Afghanistan is among the highest priorities and our government has set up various initiatives and programs to support Afghanistan,” said Sidiqov.
“In the spirit of neighborly solidarity, we ensured that our relationship is of continued support. By working closely with the government, we want not only to provide humanitarian assistance, but also help them provide job opportunities to their youth and to be a gateway for Central and South Asia.”
He added that in the southern Uzbek city of Termez, for example, the government has established centers to help young Afghans receive an education and develop their skills to prepare them for the job market.
“We’re working to help reconstruction programs and developing its economy to help turn it into a country of opportunities,” said Sidiqov. “Our allies are helping us and supporting us in this endeavor.”
Prince Faisal bin Farhan, the Saudi minister of foreign affairs, took part in an international conference titled Central and South Asia: Regional Connectivity. Challenges and Opportunities in the Uzbek capital, Tashkent, in July last year.
In July this year, a Saudi delegation also attended the international Afghanistan: Security and Economic Development conference, also in Tashkent, during which the Kingdom reaffirmed its commitment to the promotion of regional cooperation.
In June, Saudi Arabia announced a $30 million grant to support the Afghanistan Humanitarian Trust Fund, which operates under the umbrella of the Islamic Development Bank in coordination with the Organization of Islamic Cooperation, of which both the Kingdom and Uzbekistan are members.
“As a neighbor to Afghanistan, our main aim is to provide safe passage of aid to those in need in Afghanistan,” said Sidiqov.
“We are working closely with the Afghan government to develop a food-security road map and to provide youth job opportunities. We serve as a broker between the world and the Taliban, and as ‘the voice of Central Asia’ we have encouraged the Afghan government to commit to their promises.”
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