What's good about Saudi Arabia

Saudi Arabia

Sebastian Sons

To person

M.A., born 1981; Scientific department head at the German Orient Institute; Editor-in-chief of the trade journal "Orient"; PhD student at the Institute for Asian and African Studies at the Humboldt University in Berlin, Invalidenstr. 118, 10115 Berlin. [email protected]

With the start of oil production over 75 years ago and the associated export income, the former Bedouins of Central Arabia and the settled tribes in the south and on the coasts of Saudi Arabia experienced a socio-economic change through state welfare services that radically transformed social structures. The Saudi "rentier state" [1] built institutions that absorbed the rapidly growing population. A national education and health system as well as a nationwide infrastructure were created. This also required millions of mostly male foreign labor migrants, who to this day often come to the kingdom from poorer strata of neighboring Arab countries and from South Asia in order to work on construction sites, in shopping centers, educational institutions, in the health sector or in private households. Thus, these have been the backbone of the economic upswing in Saudi Arabia for decades.

But the system of the pension economy is increasingly shaky: The population has been growing for years, which means that the state is no longer able to generate enough jobs in the public sector. Also, more and more Saudi graduates from schools and universities are entering the labor market, for which there are no adequate jobs in the private sector either, especially since private companies tend to employ lower-income migrant workers than locals. This leads to rising unemployment, which has long been a cultural, economic and social problem for the Saudi population and the royal family. More than 30 years ago, the first concepts were developed to integrate more Saudi workers into the labor market - but so far without sustainable success. This increases the social pressure on the young generation, which is increasingly suffering from a lack of prospects. The Saudi royal family must therefore offer solutions in order not to come under criticism itself. Above all, with the increased opportunities for women to get involved in work, the challenge of effectively combating unemployment on the one hand and reducing the number of migrant workers on the other is growing.

Social transformation

When the commercial exploitation of oil deposits began in 1938, the rapid process of transformation of Saudi society began. Before the oil concessions were signed, only about 50 non-Muslim foreigners had been in the kingdom. Now thousands poured into the country to work in oil fields and in refineries. With the rapid increase in oil production and export income, the need for foreign workers also grew, who were now employed in all areas of administration and industry. [2] Initially mainly unskilled workers came from Yemen, Sudan and Somalia, but in the 1950s and 1960s the royal family recruited teachers, civil servants, doctors, engineers, traders and craftsmen from Egypt, Syria and Lebanon in particular. In 1964, 33 percent of the city's workforce came from abroad; by the early 1970s it was well over 70 percent. [3]

Due to the oil embargo as a result of the Yom Kippur War in 1973, income from oil exports rose again rapidly, so that more foreign workers were needed to implement the state's massive investment programs. However, the royal house increasingly perceived the Arab workforce as a political threat. The radiance of Egyptian pan-Arabism under Gamal Abd al-Nasser and the sympathy of many Arabs for socialism increasingly questioned the legitimacy of the Gulf monarchies. The royal family then decided to expel most of the Arab migrants. Instead, workers from Asian countries such as Pakistan, India, Bangladesh, the Philippines, Indonesia and Sri Lanka were recruited because they remained largely inactive politically, had to leave their families at home and demanded less wages. [4] Today, around 70 percent of all migrant workers in Saudi Arabia come from Asia. [5]

With the help of the oil revenues, the local population was supplied and supported for a long time: Subsidies, free education and health care, a professional perspective in the public sector and far-reaching social services became the political means to secure the legitimacy of the royal family, to silence demands for political participation and to co-opt the opposition. At the same time, a sense of entitlement developed in Saudi society with regard to a well-paid job in a government agency with family-friendly working hours. Instead of accepting a lower-paid job in the private sector or in the low-wage sector, more and more Saudis consciously opted for unemployment because the state provided them without employment. These "Mudir-Mentality "[6] (Arabic for" director "," superior ") increased the need for migrant workers.

In the meantime, however, the Saudi royal family is no longer able to integrate or support the 100,000 school leavers and 40,000 university graduates annually in the labor market. [7] For one thing, many young Saudis are still striving to work in the public sector. On the other hand, a private sector has developed in the past few decades, in which, however, mostly foreign workers are still employed: While Saudi nationals make up 95 percent of the workforce in the public sector, their share in the private sector is only around 13 percent. [8] Above all, private employers criticize the low work motivation, the excessive wage expectations and the inadequate training of Saudi applicants and therefore prefer to employ foreign workers. These are usually four times cheaper than locals, require less vacation and no family-friendly working hours. Although the Saudi state has invested billions in education in the past, the national level of education usually does not convince private companies operating in international competition. In addition, greater emphasis was placed on higher academic training, so that the actual needs of the economy for workers in the low-wage sector or in the craft sector remained unfulfilled.

This leads to the paradoxical situation that Saudi workers are increasingly confronted with real unemployment. In 2013 unemployment was officially 12.7 percent, youth unemployment even at 29.2 percent. [9] Young job seekers in particular must slowly move away from the traditional one Mudir- Say goodbye to mentality in order to be able to secure their livelihood. This also has an impact on the social situation of young Saudi men: Many cannot find a job, which leads to a loss of social respect. In a still patriarchal society, husbands and fathers are expected to be able to support the family. The fact that more and more men can no longer perform this traditionally assigned function leads to frustration, rising suicide rates and depression. In the meantime, drug addiction and alcohol consumption - strictly prohibited socially, religiously and legally - have become serious problems. At the same time, the state expects private companies to provide and pay better for Saudi workers, but this has not yet been done.

In addition, the demographic development is leading to serious socio-economic problems in the labor market: Saudi society is one of the youngest in the world. Although the birth rate has decreased significantly, the average age is 25.3 years. [10] Between 1950 and 2013, the population grew from 3.2 million to just under 28 million, [11] of which 32.4 percent are of foreign origin. [12] With rising unemployment and reduced support from the rentier state, the wealth gap within Saudi society also widened: while poverty has become a social problem, wealth is concentrated in around 120,000 millionaires, who have a total wealth of 400 billion US dollars unite [13] - a fact that unmasked the reputation of the wealthy Saudi population as a myth. Instead, the wealth is distributed among a small elite that has close ties to the royal family or comes from it themselves and has built patronage and clientele networks in order to consolidate or expand their standard of living.