Dhahran, Saudi Arabia
For every two jobs in Saudi Arabia there is one Saudi Arab available to fill them. Reducing that margin presents one of the Kingdom's most serious development challenges in the 1980s.
Fueled by enormous infrastructure and industrial diversification plans paid for from swelling reserves of petrodollars, business is booming throughout the oil-rich kingdom.
Inherent in the boom is a commitment by government, business, and industry to create a Saudi work force capable of leading a nation whose grandfathers were Bedouin sheep herders into the ranks of the industrial world.
The plan is to achieve the "Saudization" of sectors of the economy historically dominated by foreign expertise, management, and labor. This is to be done through education, job-training programs, and by incorporating Saudi nationals into all levels of every company operating here until they become 75 percent of each company's work force.
The intent is to fully utilize the work force of a country where now only 15 percent of the population is literate -- much as the kingdom's planned industrial network of gas-powered generators, petrochemical complexes, and refineries is intended to maximize the utility of a single barrel of crude oil.
The difficulty, however, in establishing full Saudization of existing operation and completion of facilities under construction or still on the drawing boards is that the number of new jobs is apparently growing faster than the number of Saudis who will be entering the work force in the next five years.
At present there are 2.5 million jobs in the Saudi job market and it is estimated that 1.1 to 1.7 million expatriates are working in the country. The exact expatriate population is a well- kept secret but it is estimated that this population includes 800,000 from Yemen, 350,000 fom other Arab countries including Palestinians, 140,000 from the Philippines, Sri Lanka and Bangladesh, 100,000 from India and Pakistan, 80,000 from South Korea, 45,000 from America, 30,000 from the United Kingdom and about 15,000 from Western Europe.
The total Saudi population has been estimated at 5.5 million.
Between 300,000 and 700,000 new jobs are expected in the period between 1980 and 1985. during that time, 129,000 Saudi men are expected to enter the work force.
Even considering a migration of foreign workers into Saudi Arabia and the government-forecasted shift of up to 155,000 Saudis from agriculture and construction into the new job sectors, some observers here are projecting a significant shortfall in manpower during the present five-year development plan and beyond.
shortfall is expected by observers to lead to greater competition among major employers, who may soon be scrambling to attract employees from a limited pool of acceptable citizens to satisfy required Saudization programs.
In addition, the government may have to rethink the stated policy in its "third development plan" of limiting the growth of the expatriate labor force to 9,000 during the five-year period.
Independent sources suggest that if Riyadh attempts to limit the amount of expatriate growth by keeping it to about 1 million (as is called for in the third plan) it will cause a decline in the kingdom's growth rate, and delay -- perhaps by decades -- the emergence of Saudi Arabia by the year 2000 as a modern , manufacturing-oriented economy.
Part of the government's hope of keeping the number of new jobs down was based on achieving a 27.2 percent increase in productivity during the five years as workers shift to modern, capital-intensive production methods. This is expected to save the economy 700,000 jobs.
Nonetheless, it appears to some that the government's two major development goals -- Saudization of the work force and rapid modernization of the economy -- are on a collision course.
One independent survey suggests that if the Saudis pursue development while continuing to increase the expatriate population, the relative proportion of foreigners will not begin to decline until the year 2015. In addition, the study projected that total Saudization will not occur for another 70 years.
An additional obstacle to rapid Saudization is the disparity in the distribution of foreign workers who in 1979 made up more than 75 percent of the work force in the industrial-commercial sector, the sector where most of the development is taking place. It will be especially challenging to reverse the 3 -to-1 foreign-to-Saudi worker ratio in that sector, because the analysts expect that sector will swell to 4 million workers by the year 2000.
The Saudi government, conscious of the situation, has invested heavily in capital-intensive, highly automated plant facilities for its planned steel, fertilizer, petrochemical, and petroleum-products industries under construction at Yanbu on the Red Sea and Jubail on the Gulf. The facilities, expected to establish an industrial base from which a new manufacturing sector will blossom, will require 12,000 to 13,000 workers, according to government officials.
Officials say they want 65 to 70 percent of the workers to be Saudi at the time the plants come on stream in the mid-1980s.
In an effort to meet this deadline, the government is matchin its heavy investment in capital-intensive equipment with equally heavy investment in training and manpower development.
The government appropriated $7.83 billion of its $88.9 billion 1981-82 national budget for education and manpower. Approximately $6.75 billion was earmarked for manpower development in last year's budget.
According to the latest budget, some of the funds will be used to construct 600 schools, 26 intermediate colleges, 18 health units, 16 public libraries, 26 education administration buildings, and eight student sports complexes.
Some government officials expect that the government's emphasis on education will eventually allow it to tap into a pool of 100,000 students at government literacy schools.
Another aspect of the Saudi manpower shortage is that, according to custom, few Saudi women (approximately 6 percent) hold jobs, and those who do work are extremely limited in the kinds of jobs they are permitted to take.
Young Saudi males, on the other hand, particularly those with good high-school grades, have become increasingly valuable assets to companies and can select from a wide range of careers. Some will choose to stay in very lucrative family businesses.
In an effort to attract educated Saudis, the Arabian American Oil Company (Aramco) offers generous wage and benefit packages plus extras like a program in which high-school graduates with good grades who join the firm will be eligible for a full scholarship and salary to attend an American university after completing a three-month training course in Dhahran. In addition, Aramco, which produces 97 percent of the kingdom's oil, maintains a career development department that monitors the advancement of Saudis and assists and encourages rapid promotions.
This year approximately half of Aramco's 59,000 workers are Saudis. Aramco executives expect that the its work force will remain approximately 50-percent Saudi, assuming the firm is able to hire the equivalent of 22 percent of all Saudi males entering the job market during the present five-year plan. From 1975 to 1980 Aramco hired 15 percent of Saudis entering the labor force, competing primarily with the government for Saudi workers.
In 1981 both Aramco and the government will find themselves facing stiff new competition for workers.
Aramco is also planning to step up its advertising compaign and to open recruiting offices throughout the nation rather than just in the oil-rich Eastern Province. It is also rapidly expanding its training programs and facilities to accomodate 21,200 newly hired Saudi trainees and Saudis switching careers by 1982.
As the kingdom's industrial sector emerges from its infancy and the oil and government sectors continue to grow, it appears that Saudi unemployment lines may be even more scarce than water in Saudi Arabia.