Thanks to their double-digit growth over past many years, remittance inflows from the Kingdom of Saudi Arabia (KSA) have been commanding dominant share in Pakistan’s overall remittances. According to latest data released by the State Bank of Pakistan, overseas Pakistanis remitted $12.76 billion back home in eleven months ending May 2013, out of which $3.75 billion (nearly 30 percent) were received from the desert kingdom.
There are fears that the ongoing jobs localization drive in the Kingdom, dubbed Saudisation, might jeopardize the rising remittance inflows to Pakistan. However, there is uncertainty over how the Saudi Minister of Labour’s (MoL) recent actions would affect Pakistani expatriates working in the kingdom. Neither the foreign office nor the central bank has come up with any impact assessments so far.
Amidst the flux that has followed Saudi MoL’s enforcement of Nitaqat Law (which mandates companies of different sizes to employ certain percentage of Saudi nationals on their payrolls), Monis Rahman, the Chairman and CEO of ROZEE.PK, has some insights to offer. His Company recently acquired Saudi Arabia’s leading jobsite Mihnati.com.
“The Saudi MoL started this campaign after the employment of Saudis in the private sector fell from 13 percent in 2008 to 10 percent in 2010. So, the primary objective behind this campaign is to provide more employment opportunities to Saudis, especially youth who are now graduating in increasing numbers, and also to females,” he said while talking to BR Research.
Monis estimates suggest that out of the estimated 1.5 million Pakistanis employed in KSA, about 80 percent are blue-collar workers, 5 percent are highly skilled professionals, and 15 percent are early to mid-tier professionals.
He suggests that those Pakistanis in Saudi Arabia, whose skill set competes directly with jobs that the Saudi labour force desires and is skilled to undertake, are particularly vulnerable. “It will be safe for Pakistani expats at the high end and low end of the Saudi job market–-however, the middle professional tier will be vulnerable,” he submitted his assessment of the developing situation.
“Expat Pakistani white collar workers at the entry and middle-level would be affected in both private and public sector jobs in fields like finance & accounting, IT, manufacturing, medicine and academics,” he said.
However, the high-end of skilled, experienced, professional jobs would be shielded from Saudi competition “because those skill sets are highly specialized and not readily available amongst the local population”.
Monis noted that there will be little threat to blue-collar jobs in the long run. These jobs dominate Pakistani employment in the Kingdom in sectors such as construction, masonry, plumbing, tailoring and maintenance/repair services. He is confident that even though there is a shakeup in Saudi labour market right now, things will settle as companies begin to adapt to the new laws.
“The Saudi market needs blue-collar workers and labours. So, even if some of these workers are being sent back to their home countries due to enforcement of the Nitaqat Law, they will most likely be able to reapply and reenter the Saudi job market, through proper documentation this time.”
But, if things pan out the way Monis has described, hundreds of thousands of workers will soon be booking a one-way ticket back home. It is still difficult to quantify the impact–-yet one thing seems certain: rising remittance inflows from KSA may soon be a thing of the past.