The Saudi Ministry of Labour has reported that more than 1 million Saudi nationals are now receiving unemployment benefit under the “Hafiz” programme, which pays unemployed Saudis SR2,000 ($533) a month for up to one year. The welfare scheme was announced by King Abdullah during the Arab uprisings last spring and introduced in late 2011.
“The number of beneficiaries this month rose by 40% from last month and by 170% from December when the programme started to pay the monthly subsidy,” said the official Saudi Press Agency quoted Khaled al-Ajmi, the Labour Ministry official in charge of Hafiz, as saying.
Saudi Arabia has benefitted from decades-long population boom but the government is no longer able to cut down unemployment by creating public sector jobs. One of the major reasons of last year’s revolutions in Egypt, Tunisia, Libya, Yemen and Syria have been attributed to some high youth unemployment figures.
The kingdom’s official unemployment rates hover around 10.5% but critics insist this figure does not include a large number of working-age Saudis who are not counted as part of the labour force.
Many economists pointed out to the recent government figures that reveal labour force participation rate, meaning people who are in jobs or who say they are looking for work, is around 36.4%, which is about half the global average.
Jeddah-based Arab News on Wednesday quoted the head of a parallel unemployment programme run by the Labour Ministry as saying that joblessness costs the government SR5.5bn annually.
Around 90% of Saudis work for the government, while 90% of jobs in private companies are filled by over 8 million foreigners.
Expatriates either fill the higher-paying technical roles or low-paying jobs. Many Saudis cannot fill in these jobs due to lack of technical expertise or consider them menial.
Labour Minister Adel al-Fakeih said in January the kingdom needed to create 3 million jobs for Saudi nationals by 2015 and 6 million jobs by 2030, by pushing the “Saudisation” drive – meaning substitution of expatriates with local people.
Critics of the government’s generous welfare programme insist that the Hafiz programme discourages Saudis from seeking work in the private sector where salaries are sometimes lower than the unemployment benefit.