Foreigner flight causes upheaval in Saudi Arabia

In Jeddah, above, and other cities, buildings are emptying and stores staffed by foreigners are struggling. Photo / Washington Post

Mohammed Iqbal joined the throng of foreign workers bound for Saudi Arabia during the oil boom of the 1970s, after recruiters from Pepsi visited his native India and dangled an opportunity in the kingdom driving a delivery truck.

The workers arrived from Asia and the Middle East, often on short-term contracts, to satisfy the Saudi Government's ambitious development plans. But Iqbal stayed, raising three children and finding work over the decades, even as the Saudi Government's priorities changed and its control over the foreign labour market tightened.

Recent shifts in government policy have forced Iqbal to consider pulling up stakes, at the age of 60.

The Government has imposed fees on the dependents of expatriate workers and restricted foreigners from working in certain sectors. Rising costs, as part of an overhaul of the economy intended to make Saudi Arabia less dependent on oil, have hit low-wage foreign workers especially hard. The result has been a massive exodus of foreigners from the labour force.

The abrupt outflow has also illustrated the steep challenges facing Crown Prince Mohammed bin Salman as he tries to remake the Saudi economy.

A central pillar of his plan involves creating employment for Saudi citizens in the private sector, where jobs are now overwhelmingly held by foreigners. In the short term, though, Saudi citizens have not filled the jobs that expatriates are leaving, adding to the pressure on business owners already struggling with an economic downturn.

Between early 2017 and the third quarter of last year, more than 1.1 million foreigners left the workforce in Saudi Arabia, according to the latest figures from the government statistics agency.

It is not the first recent large-scale exodus of foreigners: Hundreds of thousands left or were deported in 2013 and 2017. But while that exodus was largely the result of a government crackdown on people violating a work visa sponsorship programme, the latest flight appears to reflects broader hardships and unease, among foreigners and Saudi citizens alike.

The upheaval has added to a sense of uncertainty in the country as Saudi leaders grapple with a depressed economy, struggle to attract foreign investment and try to repair the kingdom's image after the murder of Jamal Khashoggi by Saudi officials in Istanbul four months ago.

An exodus of foreign workers in Saudi Arabia has added to a sense of uncertainty. Photo / Washington Post

There are signs that the exodus has caught the Government by surprise. Late last year, Saudi officials were reportedly considering lifting or easing the fees imposed on expatriate workers because of the harm the policy had caused the economy, according to Bloomberg News. But Saudi officials have yet to announce any change in the policy, and the fees remain in place.

In the long term, the flight of foreigners serves one of the Government's priorities: finding jobs for the more than half of the Saudi population that is under the age of 30 — and in doing so, staving off the kind of youth dissatisfaction that has led to protests in other Arab countries and unnerved the Saudi leadership.

But for now, a major concern has been a spike in the unemployment rate over the past two years to as high as 12.9 per cent. The increasing jobless rate is forcing the Government to revise its short-term unemployment goals and further exposing the gap between the expectations of Saudi workers and the jobs that are becoming available to them — in lower-wage construction or retail jobs, for example — as the foreigners leave.