With fall in oil prices, good times over for expats in Saudi Arabia?

February 24, 2017

Riyadh, Feb 24: Seventeen years after first setting foot in Saudi Arabia, Dominic Steck shipped his two cats and returned to Germany with his wife and school-age children, who hardly know their homeland.

Riyadh

As Saudi Arabia steps up efforts to employ more of its own people, and with economic growth slowing, the ranks of well-paid white-collar expatriates like Steck are thinning.

For them, the good times are over.

Steck said that to reduce costs, his employers "sent the Westerners" away.

"I have to admit, they will save a lot," he said with a chuckle.

Cost-cutting, financial problems and a drive to employ more Saudis have all led to a noticeable reduction in expatriate employment as the Arab world's largest economy adjusts to lower crude prices.

Saudi Arabia, which exports more oil than any other country, since last year has pursued its "Vision 2030" economic diversification effort to broaden its investment and business base, while placing more Saudis in the private sector.

The drop in global oil prices by about half since 2014 left the kingdom with a huge budget deficit and billions of dollars in debt to private firms, chiefly in the construction business.

Saudi Binladin Group alone laid off around 70,000 expats from poorer countries, but the impact of slower economic growth has gone further and left many Western expatriates also saying goodbye.

Latest official figures showed almost nine million foreigners employed in the kingdom but that was before the worst of the economic pain struck, sending home expats like Steck.

"People are leaving because there's not enough business for their contract to be renewed," said a foreign manager in the consumer electronics sector whose business is down 10 percent.

"Everybody's margins are seriously under pressure. There's not a business out there that's really doing well," he said, declining to be named.

More pain is expected come July when the government plans to impose a levy on foreign workers with dependents.

The fee will start at 100 riyals ($27) a month, rising to 400 riyals monthly by 2020, according to a government document seen by Bloomberg News.

The electronics manager said his company will make its nearly 300 expatriates, largely Indians, Pakistanis and Filipinos, pay these charges themselves.

With most of them earning less than 10,000 riyals monthly, this will encourage them to either send their families home or quit — creating space for hiring Saudis, he said.

According to the document seen by Bloomberg News, the government will also raise monthly fees paid by employers who hire more foreign workers than Saudis as part of a programme to encourage local hiring.

Abdulrahman al-Zamil, chairman of Saudi Arabia's Zamil Group which employs thousands of foreigners, said the government will continue to increase such fees if necessary "because they need to be fair to the country" and ensure jobs for locals.

The new levies add to rising costs including water and electricity bills as the government cuts subsidies, noted a foreign diplomat.

"The cost of doing business is so expensive," he said, speaking on condition of anonymity.

Western expatriates, often more highly paid than their Asian or Arab counterparts, said they could afford the new family levies, but admit that the lucrative packages that drew them to the kingdom are becoming harder for companies to maintain.

These include housing allowances worth thousands of dollars each month, family flights home and, in many cases, international school fees.

There is no income tax in the kingdom although it plans to introduce taxes on some consumer items this year.

"Budgets are getting tighter and I don't think it's as lucrative as maybe it was" for expats, said an Australian engineer, lured to the kingdom with his family, partly out of a sense of adventure but also because of the financial benefits.

Three years later, he is going home, with his firm still "owed a lot of money" by its Saudi contractor.

"I've actually been made redundant but I was going to leave anyway," the engineer, who also declined to be named, said.
Dozens of expatriates of various nationalities had already been let go by his firm and others will follow, he said.

The Australian leaves with mixed feelings, having made friends and enjoyed his expatriate housing compound complete with a swimming pool and other diversions hard to come by in Riyadh, where alcohol is banned and there are no public cinemas or theatres.

A foreign fund manager with several years in the kingdom said the good times are over for expensive Western labour.

"In 10 years I don't think there will be expats, because they have to get the Saudis to work," he said.

The foreign diplomat said the departing workers were often replaced by less expensive hires including Portuguese, Greeks and, increasingly, Arab nationals.

Steck, who flew home in early February, had planned to stay another year.

He was the last of several Western managers let go by his firm.

The company, a subsidiary of a German multinational working for a major local telecommunication firm, had been under-bid by China's Huawei.

With a company car, the house and school fees all paid for, he had hoped for a final boost to his savings.

"Leaving, I'm happy, (but) not for my salary in the future," he said.

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News Network
March 27,2024

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Gokarna (Uttara Kannada): Karnataka Deputy Chief Minister D K Shivakumar on Wednesday said the Congress will decide about making him the Chief Minister in future, bringing to the fore again the issue of leadership change.

There was stiff competition between Siddaramaiah and Shivakumar for the Chief Minister's post after the Assembly election results in May last year, and the Congress had managed to convince the latter and made him the Deputy Chief Minister.

There were some reports at the time that a compromise had been reached based on a "rotational Chief Minister formula," according to which Shivakumar will become CM after two-and-half years but they have not been officially confirmed by the party.

During a temple visit here, a priest prayed that God's blessings may be showered on Shivakumar, and he became the Chief Minister.

Speaking to reporters here in Uttara Kannada district, Shivakumar, who has in the past made no secret of his ambition to become Chief Minister, amid speculations of change in guard mid-way of the Assembly term, responded to talk in some political circles about the leadership issue.

"What's wrong if a priest expresses his desire before God while praying? The priest has expressed his desire. Now Siddaramaiah is the Chief Minister, I'm working as Deputy Chief Minister under him, also as party's state President. People speak about it and desiring it (Shivakumar should become CM) is a different matter, it will be decided by our party," Shivakumar said.

"Now we are all working under the leadership of Siddaramaiah, and our desire is that the state should progress further under his leadership," he said.

"There will be people including supporters and priests, who pray for us, they will express their opinion. Can we stop them from doing it? At the temple it is between God and his disciple, they have expressed their feelings to God," Shivakumar added. 

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News Network
March 25,2024

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Bengaluru, Mar 25: Former Karnataka Minister and mining baron G Janardhana Reddy on Monday rejoined the BJP ahead of the 2024 Lok Sabha polls.

The Gangavati MLA, who is an accused in an illegal mining case, had formed the 'Kalyana Rajya Pragati Paksha' (KRPP) ahead of the state assembly polls last year, snapping his two-decade-old association with the BJP.

Reddy today merged his KRPP with the BJP as he, along with wife Aruna Lakshmi and some family members, joined the party in the presence of its veteran leader and former Chief Minister B S Yediyurappa, state President B Y Vijayendra, and others.

Reddy had recently met Union Home Minister Amit Shah in New Delhi.

However, in the February 27 Rajya Sabha polls he had extended support to the Congress candidate.

Calling it a "home coming", Reddy explained that the move to merge KRPP with the BJP is to "make Narendra Modi the Prime Minister a third time".

"Amit Shah had invited me to Delhi and told me that -- there is no question of extending outside support (KRPP supporting BJP in LS polls) and instead I should join the BJP and work for it, as I took my political birth in the party. Accepting it, I'm joining the party," he said.

Praising Yediyurappa and the leader's contribution in his political growth, Reddy said he is happy that he will be working in the party now with the veteran leader's son Vijayendra.

"I will work as a common party worker along with other leaders under the leadership of Vijayendra. I have not come with any conditions or expectations. Whatever responsibility the party gives me, I will honestly work.

"BJP was always there in my blood, but due to some reasons I had gone out, but today I feel I have come back to my mother's lap. Looking at my brothers here, I don't feel like I'm coming back to the BJP office after 13 years," he added.

Welcoming Reddy back into the party, Vijayendra said his joining will strengthen BJP in the Kalyana Karnataka region.

"Liking Narendra Modi's leadership and accepting BJP's ideology, Reddy has rejoined the party. Reddy has said that Karnataka should have a larger contribution in making Modi PM once again -- to ensure that BJP and JD(S) alliance win all the 28 Lok Sabha seats in the state, he is merging his KRPP with BJP and is joining the party," he said.

Before the assembly polls last year, Reddy had been largely politically inactive for nearly 12 years since his arrest by the CBI for an alleged role in a mining scam. During this period, he had a brief stint ahead of the 2018 assembly polls when he campaigned for his close friend and former Minister B Sriramulu in Molakalmuru Assembly segment.

In the run up to the 2018 assembly polls, the then BJP national president Amit Shah, in response to a reporter's question, had distanced the party from him and stressed that "the BJP has nothing to do with Janardhana Reddy." Accused in a multi-crore illegal mining case, he has been out on bail since 2015. Several conditions were imposed by the top court in its order which includes prohibiting him from visiting Ballari in Karnataka and Ananthpur and Kadapa in Andhra Pradesh.

Because of these restrictions, he had to contest the 2023 Assembly polls from Gangavati in Koppal district.

Expressing his displeasure about the way BJP had ignored him, Reddy had announced a new party last year and also took a dig at his brothers -- Karunakara Reddy and Somashekar Reddy -- and Sriramulu, as they remained with the BJP.

The three of them had unsuccessfully contested the Assembly polls, with Reddy's new party said to have impacted their performance in the election.

Sriramulu, a ST community leader and former Minister is now the BJP's candidate from the Bellary (Ballari) Lok Sabha constituency.

Reddy had played an instrumental role in strengthening the BJP in the Ballari district and is still believed to enjoy a considerable clout there as well as in adjoining districts like Chitradurga, Koppal and Raichur, which could be useful for the BJP in the Lok Sabha polls.

Reddy and his brother-in-law B V Srinivas Reddy, managing director of Obalapuram Mining Company (OMC), were arrested by the CBI on September 5, 2011.

The company is accused of changing mining lease boundary markings and indulging in illegal mining in the Ballari Reserve Forest area, spread over Ballari in Karnataka and the Anantpur district of Andhra Pradesh.

Reddy first came to political limelight during the 1999 Lok Sabha elections, when he campaigned for BJP leader, the late Sushma Swaraj, who had contested against Congress' Sonia Gandhi from Ballari.

Former Congress Minister T John's son Thomas John also joined the BJP today.

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News Network
March 28,2024

Mangaluru, Mar 28: Dakshina Kannada deputy commissioner Mullai Muhilan MP has warned the individuals and political parties against the poll code violations during private events. 
 
“Private events such as marriages, birthdays, housewarming ceremonies, and other non-political programmes do not require any permission. However, one should ensure that there is no violation of the model code of conduct (MCC) at these functions. Permission is needed if the events are attended by politicians or candidates,” the DC said. 

He said that these gatherings will be under the surveillance of MCC teams, as there are chances of luring voters by campaigning and supplying food, said the DC. The district has 38,386 new voters, of which, 19,619 are men.

He said that the notification of election in Dakshina Kannada Lok Sabha constituency will be issued soon, and the filing of nominations will be held between 11 am and 3 pm till April 4. 

Only five persons, including the candidate, will be allowed to enter the returning officer’s chamber to submit the nominations. A facilitation centre will be opened at the DC’s office. 

The expenditure of the candidate will be counted from the day the candidate files the nomination.

The DC said that the district is not an expenditure-sensitive constituency. Assistant expenditure observers and expenditure observers will monitor the expenditure of the candidates. An expenditure book will be provided to the candidate to record expenditure incurred, he explained.

Further, he said that no election materials can be printed without the name and address of the publishers, and the number of copies printed. Separate permission should be availed for procession prior to the submission of nomination papers from the ARO office, through the single-window system.

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