Riyadh – Mubasher: Saudi Arabia has started nationalising jobs in its retail sector in a bid to raise the number of Saudi citizens working in the country and reduce expat numbers.
Analysts forecast that the retail sector, whose Saudisation follows the telecom sector’s, is just the beginning of a move that could reach other segments in the country.
Earlier this month, the kingdom began Saudising parts of the retail sector including household utensils, furniture, clothes shops, and car dealerships.
It is forecast that 70% of hires in the sector’s shops will be Saudis, according to Bloomberg.
In November, the rich-oil nation will Saudise electrical retailers, opticians, and watch sellers, while in the beginning of 2019, it will extend its drive to shops selling spare car parts, medical equipment, building materials, carpets, and confectionary.
Despite the move, several business owners have expressed fears, including one Mohanad Faham, foreign investor who wonders whether the furniture showroom he manages in Riyadh could come out unscathed by Saudisation and the need to get more Saudis to work, the news agency added.
Faham noted that he had trained several Saudi salesmen, but they all left after a few weeks. “Everything came at the same time, we have high rent in this area, demand is low in the market and costs are high,” he went on.
Meanwhile, senior analyst in Dubai-based Control Risks Graham Griffiths highlighted that small retailers were facing difficulties from the Saudisation scheme, noting that several may close their shops in the near future.
“The Saudi private sector is in a very difficult position,” Griffiths said. “The economy is under strain, taxes and fees have increased, and costs - from labour to utilities - are rising.”
Previously, Khalid Aba Al-Khail, a spokesperson for the Saudi Ministry of Labor and Social Development, said that Saudisation would offer around 60,000 job opportunities for citizens.
In the previous week, the kingdom unveiled plans to Saudise 43 types of jobs across four retail sub-sectors namely utensils and home goods, car and motorbike showrooms, places that sell home and office furniture, and ready-to-wear clothes.
During February, Saudi inspection campaigns showed that 94.5% of gold shops apply nationalisation.
