In era of cheap oil, Saudi loses shine for foreign workers

Wed Mar 23, 2016 6:55am EDT
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By Marwa Rashad and Reem Shamseddine

RIYADH/KHOBAR, Saudi Arabia (Reuters) - Mobarak Musa, a mobile telephone salesman from Syria, has spent 10 years working in Saudi Arabia, sending part of his wages back home to support his parents and three brothers. A shift in Saudi labor policy means he won't be able to do so for much longer.

In early March, the Ministry of Labour announced that within six months foreigners would be banned from selling and maintaining mobile phones and accessories for them, in an effort to keep open more jobs for Saudi citizens.

So Musa became one of hundreds of thousands of foreign workers in Saudi Arabia who may lose their jobs and be sent back to their home countries this year, as low oil prices slow the kingdom's economy and prompt the government to restrict employment opportunities for expatriates.

“I don’t know where else can I go - I don’t know any other job to do," Musa, in his 30s, said in his small shop at a mobile phone market in downtown Riyadh.

Millions of foreigners from south Asia, southeast Asia and elsewhere flocked to work in Saudi Arabia during the economic boom of the past decade, filling relatively low-paid posts in the oil industry, construction and services as well as many middle-management and professional positions.

Foreigners accounted for 10.1 million of the total population of 30.8 million in 2014, according to the latest official data. The money they sent home was important for their home countries; they remitted $9.1 billion out of Saudi Arabia in the third quarter of 2015, central bank data shows.

The inflow of people may now go into reverse. Saudi economic growth is slowing as low oil prices produce a state budget deficit that totaled nearly $100 billion last year, forcing the government into spending cuts.

Many analysts expect gross domestic product growth, which averaged over 5 percent annually between 2006 and 2015, to fall well below 2 percent this year. Partly because labor rules make it hard and costly to fire Saudi citizens, layoffs in the early stages of a downturn tend to hit foreigners almost exclusively.   Continued...

A Saudi vendor speaks on his phone as he waits for customers at a mobile shop in Riyadh, Saudi Arabia March 21, 2016. REUTERS/Faisal Al Nasser