As the deadline for implementing the new policy called Nitaqat, ended Wednesday, labor authorities, supported by police, stepped up a major campaign to drive out 'illegal workers' as well as those involved in cover-up businesses in different parts of the Kingdom.
The move has triggered shock waves among expatriates, especially those who are not working for their sponsors.
Police have reportedly arrested a large number of expatriates for violating iqama and labor regulations during the past week, sources said.
Many shops and firms have been closed down in Riyadh, Jeddah and Dammam as they either did not have enough workers under their sponsorship or fear punitive action.
According to a report in the wake of Arab Spring uprisings, the Saudi government views unemployment among nationals as a long-term strategic challenge that needs to be handled effectively. A study by the Saudi Central Department of Statistics and Information, fixed the unemployment rate in the country last year at 12.2 per cent. That meant that more than 588,000 people were without jobs.
Other estimates suggest that an alarming 39 per cent of the youth in the 15-25 years old category, are unemployed. Consequently, the Kingdom has adopted the Nitaqat programme — a plan to push its nationals into employment in companies that are colour coded to deter expatriates from monopolising their workforce.
Thus, firms falling into the red zone are the worst offenders as they have, according to the Kingdom's grading criteria, failed to employ the minimum quota of Saudi nationals in their workforce.
Those in the yellow slot have also fallen short of their targets, but, despite their poor showing, have been recognised for their effort to employ Saudi nationals. Companies in the green zone fall in the blue chip category as they have fully complied with the Kingdom's latest labour laws. As a result they are allowed to expand their workforce by employing a larger number of expatriates. The Nitaqat programme does not cover those businesses that employ less than 10 people.
The Saudi road map of employment generation has now reached a stage when it threatens the livelihood of nearly two million expatriates, the majority of whom are Indians employed in the small and medium enterprises category. The Saudi daily Arab Newsported that “at least two million expatriates may lose their jobs or leave the Kingdom shortly as about 250,000 small and medium enterprises will be listed in the Red category of the Labour Ministry's Nitaqat system on Wednesday.”
As of now, there are no signs that the Saudi authorities are in a mood to bend the rules. “The Kingdom will not allow anybody to continue violating its regulations because it harms public interests. If the laws are not followed, the interior and labour ministries will take maximum measures by law against the violators,” Labour Minister Adel Farkeih was quoted as saying.
The affected workers in the red-designated companies are set to face considerable distress as their work permits will not be renewed — a situation that would automatically lead to the cancellation of their residency permits.
Saudi media reports warn that according to a new law passed by the Saudi, the Interior Ministry can arrest and deport the violators of the residency laws. Despite the minimum requirement of Saudi nationals in less paying jobs, observers say that the labour laws are likely to undermine the development of the Kingdom's infrastructure and real estate sectors, which employ a large number of blue collar workers.
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