Saudi Arabia Unemployment, Case Study Example

Saudi Arabia has made tremendous strides last 20 years because they are among the fastest growing nations in the world based on population. The Saudi Arabia population grew from 7.3 million in 1975 to over 30 million in 2014(Employment Plan 2014, 2014). However, the number of Saudi Arabia population that is working in the private sector is scarce. In addition, the Saudi regime has not made a commitment to the future with improve educational opportunities and more technology career training. The Saudi of Arabia Ministry is concerned stating the International Monetary Fund(IMF )(2013),study shows the unemployment rate for Saudi Arabia population is over 12% and the youth are 30% and females have one the highest rates at 35%(Hoetjes,2013).

Saudi Arabia is one the most oil rich country in the world however, they have major problems with keeping the young population that is under 30 years of age employed. The growth of the Saudi Arabia does not translate to improve unemployment numbers because over two-thirds of their population is under the age of 30 years of age. (Hoetjes, 2013). The primary issue is education and technology of the current population of Saudi Arabia. The leaders of Saudi Arabia have not invested enough funds into education and technology for the younger generation. The have over 38% of all Saudi Arabia population is 14 years of age. They are not getting the required education to complete in for jobs in their own country. (Glum, 2015). There a not enough 14 years or those under 30 years of age in educational, lack technology programs and not present in the labor force. The job market presents Saudi Arabia as one the best hot spots in the world for jobs. However, those jobs are for people coming from all over the world to work in Saudi Arabia instead of hiring the local talent that live in the region. This phenomena contributes to the rising unemployment rate of men, women and younger generation under 30 years of age.

The overall unemployment rate for Saudi Arabia is 5.8% since 2009 while the percentage of hiring foreign workers has risen tremendously. This trend of hiring abroad has impacted the fluctuating unemployment rate including an increase in unemployment rates to 10.5% by 2012. (International Monetary Fund, 2013). The contributing factors to the unemployment rate going up is the Saudi Arabia concentration on government services and contracts that required the high end technology staffing from foreign countries. The historical trends for unemployment rates for Saudi Arabia has reflected the disparity in unemployment between genders.

The unemployment rate for by gender showing a disparity with the overall total average percentage for women at 15.7% over 15 years, however, the unemployment average rate for males was only 3.7%. In Saudi Arabia the average unemployment rate for women for 15 years was 28.3% while the males unemployment rate is 7.2 %.( See table 1). This shows that women are lagging behind the men in the employment cycle because they have not quite given the educational and business training to complete with the males. It will be necessary for Saudi Arabia to make that adjustment with the changing times to attract the educational that can help the youths of Saudi Arabia.

The gender disparity has to be addressed because the need of buy-in from other countries and excellent colleges will expect that gap to be addressed. The top Ivy League instructions would have a difficult time uprooting their families for opportunities that do not provide equal advancement and employment of women. The women from abroad from the educational arena will be demanding the same pay as the male professors.

In 2012, the unemployment rate for youth ages 15-24 was 28.2% and ranked 17^th in world compared to other countries such as Turkey, Sweden, Jamaica, and Puerto Rico to name a few(Index Mundi,2012).(see table 2). This is consistent with the youths of Saudi Arabia unemployment rates that indicates they need to improve their educational and technology programs to allow their youths of tomorrow the ability to compete.

The other types of unemployment rates are by male, female, and youths. The breakdown of the male and female of employed in Saudi Arabia is 7% of females foreigners, Saudi Arabia female is 8%, males in Saudi Arabia is 42% and males foreigners is 43%, respectively(International Office Labour Office,2009). It’s obvious that the government sector contributes to the type of technology workers required causing Saudi Arabia to seek the more qualified pool of applicants from abroad. This impact can be seen in the comparison of the Gulf Cooperation Council (GCC) versus the overall unemployment rate. The lack of educational and technology training for the youths of the future for Saudi Arabia clearly demonstrates that primary business agendas for Saudi Arabia do not include youths. The countries that make of GCC are Saudi Arabia, Qatar, Oman, Kuwait and Bahrain. In the GCC regions the unemployment rate are double that of overall unemployment rates (World Economic Forum, 2015).

The solution for the unemployment in the Kingdom of Saudi Arabia can began with not just spending the money towards education and improve technology programs but to get the youths involved with the process. One of the causes is the college and education opportunities for the local Saudi Arabia population is not being utilize cause them either join the unemployment ranks or find work outside of Saudi Arabia. The truth of the matter is the under 30 population of Saudi Arabia is not being educated and even if they have the education they not chosen for employment.  A possible fix is make business deals with the corporations that want to do business in Saudi Arabia hire a set percentage of Saudi Arabia applicants to ensure those with the skill set do not get over looked. In addition, provide additional tax benefits and rewards for businesses that hire women or any Saudi Arabia that is qualified.

The educational system needs to be revamped to complete with the other countries in technology, sciences and computer technology.  In addition, the Saudi Arabia economy and business climate is depended on foreign labor making it difficult to make the transition to building a better pool of technology and business talent locally. The Saudi Arabia government needs to address the problems with increasing unemployment rates by creating more local jobs for those that graduate from college. They can utilize new strategies that would help with solving the broken labor market and change to the emphasis of employment for the Saudi Arabia population that are under 30 years of age. The educational system needs to adapt a successful program such as the Ivy League schools in the United States and encourage those Ivy League and MIT schools to teach programs in Saudi Arabia. The Saudi Arabia leaders have the resources to solicit the educational schools to build programs in Saudi Arabia but it has to become a major priority for the entire GCC not just a few. There are several models that Saudi Arabia can follow that would lead to a more educated and prepared workers, however, the overall goals for all of the GCC must be on the same page. They must come together in some kind of educational summit to build the new foundation for the youths of tomorrow.

References

Central Department of Statistics Information. (2015). Labour force. retrieved from http://www.cdsi.gov.sa/english/index.php?option=com_docman&task=cat_view&gid=85&Itemid=113

Employment Plan 2014). The Saudi Arabia Employment Plan: 2014. Retrieved from https://g20.org/wp-content/uploads/2014/12/g20_employment_plan_saudi_arabia.pdf

Glum, J. (2015, Jan).Sauda Arabia’s youth unemployment problem among King Salman’s many new challenges after Abdulla.

Hoetjes, G. (2013).Unemployment in Saudi Arabia: A ticking time bomb. Retrieved from http://muftah.org/unemployment-in-saudi-arabia-a-ticking-time-bomb/#.VZAIOEZP850

Index Mundi. (2012). Country comparison. Retrieved from http://www.indexmundi.com/g/r.aspx?c=sa&v=2229

International Monetary Fund (IMF). (2014).Youth unemployment in Euro area requires multipronged solution. Retrieved from http://www.imf.org/external/pubs/ft/survey/so/2014/RES120914A.htm

International Office Labour Office: Saudi Arabia. (2009).G20 Stasticial Update: Saudi Arabia: Economic weakness in 2009 reflected changes in Saudi Arabia’s external trade position. Retrieved from http://www.dol.gov/ilab/diplomacy/G20_ministersmeeting/G20-SaudiArabia-stats.pdf

World Economic Forum. (2015).Introduction. Retrieved from http://reports.weforum.org/rethinking-arab-employment/introduction/