Saudi Arabia: Unemployment drops to five-year low | Current Affairs in Commerce and Economics

The decline is partly caused by people leaving the entire workforce, which is not the best news for Crown Prince Mohammed bin Salman, who has vowed to make job creation for young people a priority.

Di Bloomberg

Unemployment among Saudi citizens has fallen to its lowest level in nearly five years, but the decline has been partly driven by people leaving the workforce, unwanted news for a hereditary prince who has laid off job creation for a young population at the center of their agenda.

The unemployment rate fell to 11.7% in the first quarter compared to 12.6% in the fourth quarter, continuing a strong downward trend after setting a record high for the pandemic, according to data from the General Authority for Statistics. However, labor force participation for citizens also declined, from 51.2% in the fourth quarter to 49.5% in the first three months of the year – the sharpest decline since an economic recession in 2017.

Job creation is a major consideration for Crown Prince Mohammed bin Salman, the country’s de facto leader, as it reshapes an economy dependent on oil exports and the importation of foreign labor. The global health emergency has exacerbated the scale of the problem, pushing unemployment among citizens to 15.4% during the kingdom’s coronavirus block last year.

Officials have limited a multitude of professions to the Saudis only and have introduced taxes for companies that hire foreign workers – part of a broader effort to replace employees from Asia, Africa and other parts of the Arab world. with citizens. Prince Mohammed is also in the process of renewing regulations to try to boost entrepreneurship and attract more foreign investment, hoping that both will eventually create more jobs for the Saudis.

In an interview with local television in April, he predicted that the unemployment rate will fall below 11% this year, reflecting a “V-shaped recovery”, ending its target of 7% by 2030.

Some economists say the prince’s goal is unrealistic since a demographic decline of young people enters the labor market, necessitating the creation of at least 150,000 new jobs each year to keep unemployment steady.

In the first quarter, male unemployment rose slightly to 7.2%, while in women the rate fell to 21.2% from 24.4%, following a trend of more women working during social restrictions. in the conservative Islamic country they are loosening.

The data released Wednesday does not include the number of employees by sector and nationality – indicators that have been reported by statistical authorities for years – making it difficult to track job creation. In the fourth quarter, the number of Saudis employed in the private sector was down even when the number of foreign workers in the sector fell by more than 100,000.

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