Deputy Labor Minister tells G-20 summit Saudi economy is strong
April 22, 2010
Saudi Arabia is one of the countries least affected by the international financial crisis thanks to its expansionist economic policies and structural reforms, Deputy Minister of Labor Dr. Abdulwahed Alhumaid declared Tuesday at the Group of 20 (G-20) Ministers of Labor Summit in Washington, DC.
Heading the Saudi delegation to the summit, Dr. Alhumaid delivered a speech in which he noted that the Kingdom has experienced an economic renaissance since 2004 and, as a result, has seen huge budgetary surpluses. The extra funds, he explained, have been used on numerous developmental projects and to build up financial reserves, which have helped the national economy withstand unexpected external shocks. The minister cited the appropriation of $70 billion for developmental projects in 2010 (out of $144 billion allocated for gross expenditure in the year’s budget) as evidence of the Kingdom’s commitment to growth.
Regarding the negative impact of the global financial crisis on Saudi employment, Dr. Alhumaid described the effect as limited, citing the absence of lay-offs in the public sector, the continuation of demand for laborers by the private sector and an increase of new visas issued for foreign laborers. Unemployment is not a result of the national economy’s difficulty in producing new job opportunities, he explained. Rather, it is caused by other factors, including the gap between the requirements of the private sector and the level of national education and training, low wages caused by the flow of cheap laborers into the Saudi labor market, the significant dependence of the private sector on foreign laborers and the preference of Saudi nationals to join the governmental sector, where job opportunities have dramatically decreased over the last few years.
Dr. Alhumaid described the Saudi employment strategy approved by the Cabinet in July 2009, which focuses on increasing high-skilled job offers for Saudi nationals, improving the productivity of laborers through education and training and matching human resources training programs with the requirements of the labor market. He defended the government policy not to disburse unemployment benefits, suggesting instead that premiums be offered for job-seekers who enter training courses. Saudi Arabia’s “somewhat high” rate of unemployment is a priority to labor market planners, Dr. Alhumaid concluded.
Text of speech