Young Saudi job seekers face grim future

RIYADH • Saudi engineering graduate Marwan turned down a job from General Electric to hold out for a better salary. It was a decision he now regrets.

The 24-year-old native of the port city of Jeddah has now been applying for jobs for a year with no luck.

As the kingdom grapples with low oil prices, he worries whether he will still be employable when the economy recovers. "Will companies hire the new graduates, or us, the forgotten generation?" he said, declining to use his full name to share his experience.

More Saudis, who watched their parents reap the benefits of the oil boom, are struggling to find work as the government trims its bloated payroll and businesses reel under a slowing economy.

Creating jobs for them is one of the toughest challenges facing Deputy Crown Prince Mohammed bin Salman, who is pushing efforts to end the economy's addiction to oil.

In April, he unveiled a plan dangling the promise of long-term prosperity if Saudis like Marwan can endure the initial pain of austerity.

  • 12.1% Unemployment among all Saudis in the third quarter.

    25% Saudis under 30 who are unemployed.

Saudi Arabia faces a demographic time-bomb. Nearly half of all Saudis are younger than 25, and this bulge could almost double the size of the labour market by 2030, according to a study by the McKinsey Global Institute.

Failure is "unthinkable", said Dr Ihsan Bu-Hulaiga, a Saudi economist and former member of the Shura Council, a consultative body. "We cannot continue like this; we cannot afford it."

A quarter of all Saudis under 30 are unemployed, while foreigners make up more than half of the labour force.

To absorb new job seekers, the kingdom would have to create almost three times as many opportunities for citizens as it did during the oil-boom years of 2003-2013, the McKinsey study found.

But an austerity drive to repair public finances, which includes scaling back state largesse, has pushed companies to fire, not hire.

Unemployment among all Saudis rose to 12.1 per cent in the third quarter, the highest since 2012.

Among the unemployed is Anas, a 26-year-old chemistry graduate who has been applying for jobs "in any field" for a year and a half. To cover his expenses, he works seasonal gigs during the haj and drives his car as an unregistered taxi. 

If the employment initiatives fail, joblessness among Saudis could soar to 22 per cent by 2030, the McKinsey report forecast.

Replacing foreign workers with Saudis has been a national policy objective for decades, with little success. The majority of graduates opt for government jobs that offer fewer hours and stable benefits.

Others had little incentive to work at all, relying instead on generous unemployment benefits and family support.

Efforts picked up in 2011, when the government launched a quota programme called Nitaqat. 

Entire job categories have been nationalised, including lingerie and make-up sales filled by Saudi women workers.

Mr Tameem Alyahya, a 23-year- old industrial engineering student, said he would consider a job in neighbouring Qatar. Some of his friends are looking into migrating to Canada. "You (the government) are saying something, but we're seeing something else," he said.

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A version of this article appeared in the print edition of The Straits Times on November 28, 2016, with the headline 'Young Saudi job seekers face grim future'. Print Edition | Subscribe