Saudi Arabia, with its GCC neighbors, is pushing economic diversification with some success. Arab News reports on a study showing that the GCC is increasing intra-GCC trade and, by building new rail networks, port facilities, and airport infrastructure, are aligned to see the diversification grow.
Although Saudi Arabia is the Middle East’s largest goods exporter, accounting for a third of total goods exported in 2013, only 5.3 percent of these were destined for other nations within the region, according to a new report by ICAEW.
According to Economic Insight: Middle East Q3, 2014, the GCC nations are leading the region’s current rail and aviation investment boom as they race to encourage more cross-border trade and address increasing congestion issues in the face of rampant population growth and rapidly-developing tourism markets.
Saudi Arabia is leading the charge with investment plans worth $45 billion in a bid to boost freight and passenger capacity, followed by Qatar and the UAE with investment plans worth $37 billion and $22 billion respectively.
The planned GCC Railway, a 2,177 km project, which will link the networks of the six GCC countries, represents the most ambitious aspect of the region’s railway infrastructure plans. With the Middle East set to become one of the world’s most important aviation centers, expansion of airports in all the major GCC cities has also become a priority.
Along with diversification of the national economy, economic conditions for individual Saudis also seem set to improve. Arab News reports:
Nitiqat is the most recent iteration of “Saudization,” the effort to convert jobs held by expat workers into jobs held by Saudis. The programs has seen considerable succes, Nathan Field writes for the Saudi-US Trade Group. Structural reforms in employment have taken place — though other changes are still necessary. Employers are now facing real consequences when they try to skirt employment law; salaries have risen; companies whose existence depended on hiring low-wage, low-skill expats have been shuttered.
Over the past three years, the number of Saudis employed in the private sector has doubled; the number of women working has increased by a multiple of seven. Attitudes about manual labor seem to be changing as well. Saudis are beginning to accept jobs that were once — with no factual reason — deemed to be beneath them. This is helped by increases in salaries paid to those doing those jobs.
The factors that have led to the problems of employment developed over decades. Their solutions will, hopefully, not take as long. Those problems absolutely need to be solve, though, so what improvements have happened should be embraced.
Nitaqat Three Years On: A Summer 2014 Report Card
Four years into the Arab Spring, Saudi Arabia has been an oasis of relative calm and stability in an otherwise tumultuous Middle East region. This is partially because the perceived social, economic and political dysfunction resulting from Arab Spring reform movements has had a sobering effect on Saudi perceptions. In fact, many Saudis consider the chief consequence of the Arab Spring to be unprecedented “Fowda” (chaos). As a result, the government’s Edmund Burkian message that sudden, radical reform leads to traumatizing political and economic instability is widely accepted.
However, the sobering reality of regional instability has not been the only brake on pressure for political reform in Saudi Arabia. Meaningful domestic reform undertaken by the government since 2011 has also had an effect.
In particular, the Ministry of Labor has been leading an aggressive labor reform campaign that has begun to re-balance the labor – employer relationship in ways that are more favorable to normal, average Saudis. In December 2012, the Saudi-US Trade Group (SUSTG) published Nitaqat: Towards a Saudi New Deal, my analysis of the Nitaqat initiative up to that point. My assessment was that, based on the available information at the time, some significant results had been achieved in Year One following the Arab Spring. This article will evaluate the progress of the labor reform program based on the data that has emerged in the ensuing eighteen months.
As of summer 2014, three years into what must be understood as a long-term project, the available evidence suggests the Ministry of Labor is progressing towards its goals, meaningful progress is occurring and that the foundations of longer-term sustained success are in place.
Today’s Arab News carries several articles that bear on the Nitiqat process:
On the Question-and-Answer website Quora, Saudi national Osama Natto points out the problems Saudi would-be entrepreneurs face in trying to start up a business. Part of the problem is generational, but the biggest issue is that those with money to invest are very conservative and risk-averse. It’s an interesting read, complete with infographic.
Why Start-ups Don’t Get Funding in Saudi Arabia
If you have ever wondered why it’s so difficult for Saudi start-ups to find funding, this infographic is about to open your eyes.
Based on one of my more controversial blog posts, Why Start-Ups Don’t Get Funding in Saudi Arabia, this infographic includes extra information on some of topics covered in that earlier article, all presented in a fun visual format.
The full text of the infographic is available below for those who prefer text.
In 2002, a fire at a girls school in Mecca claimed the lives of 15 students. An investigation into the event identified several contributing factors. Among them was the fact that many girls schools were being operated, not out of purpose-build schools, but in rented facilities that had been constructed for other purposes, often as apartments.
The situation hasn’t changed a great deal over the past decade, according to a report in Saudi Gazette. Parents of girls attending schools in Jeddah are pointing out the sub-standard buildings into which they entrust their daughters. They’re not happy about it, reasonably enough. The schools may have desks and blackboards, perhaps even computers, but they’re sorely lacking in even basic safety measures.
2,000 girls in Jeddah face danger of school collapse
Saudi Gazette report
JEDDAH — There are concerns that a two-story rented building in north Jeddah that has been converted into a government school poses a serious threat to the lives of the 2,000 girls that use it, reported Makkah daily.
The building in the Hamadaniyah area looks perfect from outside but inside it lacks all safety measures, parents and teachers claimed.
Though the building bears a signboard saying it is the 96th elementary school for girls, in fact it has also been made into an intermediate and secondary school.
The 800 elementary students come to school early in the morning and leave about at 11 a.m.
The 1,200 intermediate and secondary students will come immediately after that and remain until around 6 p.m. There is no other government school for girls in the neighborhood, which is why it looks after so many students.
The King Fahd Causeway, a 25km/16mi. combination of bridge and roadway connects the Eastern Province of Saudi Arabia with the island state of Bahrain. Annually, some 12 million people use the road to travel between the two countries, often to take advantage of their different legal and social situations. The current volume of traffic is at the point of breaking the system of customs and immigration and hour-long backups are not infrequent.
Now, approaching 30 years after the causeway first opened, a second, parallel causeway is being planned to handle the large and increasing amount of traffic. According to this Asharq Alawsat report, the new causeway will include railroad lines, part of a GCC-wide effort to develop a rail network linking all member countries.
Manama, Asharq Al-Awsat—Saudi Arabia and Bahrain have announced plans to construct a second cross-sea bridge linking the two Gulf kingdoms.
The announcement was made following a meeting on Friday in Jeddah between the Custodian of the Two Holy Mosques, Saudi King Abdullah Bin Abdulaziz, and Bahrain’s King, Sheikh Hamad Bin Isa Al Khalifa.
Bahrain’s Minister of Transportation Kamal Bin Ahmad told Asharq Al-Awsat the 15-mile-long (25-kilometer-long) bridge will run parallel to the King Fahd Causeway—the existing bridge linking the two countries—but will, in addition to a lane for cars, also include two rail lines: one for passengers and another for cargo.
He said the new bridge would be named the King Hamad Bridge, after Bahrain’s monarch, a “generous gesture” from King Abdullah as a sign of the continued friendship and cooperation between the two countries.
He added that the Saudi and Bahraini ministries of transport and finance, as well as the King Fahd Causeway Authority—the joint Saudi–Bahraini body overseeing the bridge—had carried out, alongside an outside consulting firm, initial technical and environmental studies for the project last July.
In its report, Arab News focuses on the US $5 billion price tag for the new causeway:
Several years ago, there was talk of building an Egypt-Saudi causeway across the northern part of the Red Sea. I’ve not heard anything about that recently, but given the recent disruptions in Egyptian politics, that doesn’t particularly surprise me.
While they can’t drive cars in the Kingdom, Saudi women drive themselves toward success, a report from Oxford Strategic Consulting says. Al Arabiya TV extracts this from a press release by the group that notes Saudi women’s achievement in academics, but also their uphill struggles against societal barriers. An interesting data point pulled out of the study is that Saudi men are more motivated by religion or beliefs than by achievement for its own sake.
Neither link goes to the study itself. Just how questions were phrased and interpreted is not made clear. The overall results, however, confirm my own experience with Saudi women: they are truly interested in showing that they can manage for themselves and they do — when given the chance.
A considerably larger proportion of Saudi females are more likely to “strive to achieve” than their male counterparts, a survey found earlier this week, putting the figures at 35 percent and 20 percent of respondents respectively.
The survey, which was commissioned by Oxford Strategic Consulting, and released by the UK/Dubai-based HR consultancy, and polled nearly 1,000 Saudi nationals living in kingdom, asked respondents to list three things that most motivated them and three things that most discouraged them.
The survey indicated that Saudi women were also markedly more prone than men to feel discouraged by their own negative feelings (49% cf. 35%) and lack of personal achievement (24% cf. 14%), the report said.
Saudi Arabia is making its negative stance toward IS and other extremist groups clear. In Arab News, there’s a report about the sentencing of a cleric who preached support as well as provided monetary support for jihadists. He received a five-year jail sentence and travel ban.
Riyadh’s special criminal court has sentenced a Saudi preacher to five years in prison for praising and supporting terrorist groups, such as the Islamic State (IS), during an Eid sermon at a local mosque in Riyadh in August 2013.
The defendant was also slapped with a five-year travel ban. The defendant was convicted of using Friday sermons to provoke and encourage dissidence, while glorifying terrorist groups and extremist ideas propagated by Al-Qaeda terrorists.
He was also convicted of financially supporting terrorism with more than SR1 million and harboring wanted terrorists. The defendant had previously received a letter from the Ministry of Islamic Affairs ordering him to stop delivering sermons at the mosque.
Saudi Gazette reports on the disquiet following the discovery of pro-ISIS graffiti on the walls of schools in eastern Riyadh. The article suggests that this is vandalism, but also that there is concern that the group’s appeal to young men is something to watch.
IS slogan found on school walls in Riyadh
Saudi Gazette report
RIYADH — The residents of Al-Naseem neighborhood, east Riyadh, were shocked when they saw the slogans of Islamic State (IS) on the walls of some schools, Al-Hayat daily reported.
A number of residents who spoke on condition of anonymity said they suspect that a group of young men were behind it.
The young men did not look religious but used to stay up till late on the streets near the schools, the residents said.
Sulaiman Al-Battah, sociologist, blamed social media for publishing inaccurate news reports and deviant ideas.
Saudi Gazette translates a piece from the Arabic daily Makkah reporting that over 200,000 Saudis have obtained American citizenship (the time period involved is not stated). The numbers come to light as the Internal Revenue Service tries to track down 30,000 who have defaulted on their taxes.
The article notes that Saudi Arabia does not acknowledge dual-citizenship except in extraordinary circumstances. One has to choose to either be Saudi or to be some other nationality. Choosing another nationality (by going through whatever country’s nationalization process) means that one loses Saudi citizenship and all accompanying rights and privileges.
I suspect that most of these Saudi-Americans are actually people who were born in the US. The US grants citizenship automatically to any who are born in the US, with some exceptions, like diplomats. In the Middle East, but also in other places, it’s not at all uncommon for people to seek a second nationality if for no other reason than to have a place to go if things should go badly at home. At the very least, one does not end up a stateless refugee.
Contrary to the writer’s fears, though, I don’t think that the Saudi scholarship program is generating masses of new Saudi-Americans. Except, of course, for those who deliver babies while they’re studying in the US.
Why do so many Saudis become US citizens?
Abdullah Al-Tuwairgi | Makkah daily
There are more than 200,000 Saudis who have become US citizens and most of them still maintain their Saudi citizenship. The Internal Revenue Service (IRS) in the US pursues some of these people for failing to pay taxes as American citizens. About 30,000 Saudis, who are tax defaulters, are in the Kingdom and it seems that they are not serious about settling their tax obligations. Normally, no US citizen can evade paying taxes.
What concerns me is the large number of Saudis who have US citizenship. The Kingdom does not recognize dual nationality, but Saudi law allows a citizen to hold the citizenship of another country in exceptional situations but only with the permission of the Council of Ministers. If a Saudi becomes a citizen of another country, the Kingdom will cancel his Saudi citizenship and all of his rights and privileges as a citizen. When I was a foreign scholarship student in the US in the late 1980s, I noticed that most Arabs who acquired US citizenship were from countries where the political and economic conditions were poor. During those days, only a limited number of Saudis and citizens from other Gulf states applied for US citizenship, and this was usually due to their emotional attachment to the US.
An article in Arab News points to the lamentable waste of energy — particularly electricity — by Saudis. While Saudi Arabia is one of the world’s top energy producers, it is also one of its top consumers. Saudis are using as much natural gas as they are producing, the piece says. It is also using petroleum at a higher-than-sustainable rate. Most of the energy used is in the form of electricity to run desalination plants, domestic use, and industrial use. Transportation and industry use petroleum and its byproducts. According to the article, Saudis use, per capita, the equivalent of 40 barrels of oil per year.
Solar energy production is needed to help fill the demand, as well as finding new sources from which to import natural gas.
Energy waste costs local economy SR135bn annually
JUBAIL: SULTAN AL-SUGHAI
Although the Kingdom has the largest oil reserves in the world and occupies the fifth place in terms of natural gas reserves, yet according to a report by oil specialist the Kingdom faces many challenges as a result of a number of different factors, including its need to meet the requirements of development.
Oil and gas being non-renewable resources, the Kingdom requires the ideal utilization of these resources to diversify the economic base, provide new sources of income and achieve sustainable progression.
According to the report issued by the Kuwaiti Diplomatic Center, the Kingdom’s annual rate of energy consumption exceeded 5 percent while the economic growth rate reached 4 percent.
The total of energy consumption accumulated to what equals 3.8 million oil barrels per day considering the apparent disparity in consumption rates during different seasons of the year.
Statistics show that rate of consumption will reach 8.4 million oil barrels if the issue is not dealt with properly.
Saudi Gazette reports on a new regional survey conducted by a Singapore-based social media agency. The report indicates that Saudi Arabia is fully wired (or wireless) and connected. Interestingly, the data suggest that Saudis own 1.9 cell phones each.
Singapore-based social media agency, We Are Social’s (http://wearesocial.sg) report, “Digital Landscape: Middle East, North Africa and Turkey” offers an in-depth review of statistics of importance to understand the social, digital and mobile landscape in the region in 2014. The 20 countries covered include Algeria, Bahrain, Egypt, Iran, Iraq, Israel, Jordan, Kuwait, Lebanon, Libya, Morocco, Oman, Palestine, Qatar, Saudi Arabia, Syria, Tunisia, Turkey, the United Arab Emirates and Yemen. The report begins with a review of global and regional statistics and then drills down to the individual country data. Saudi Gazette presents here the data for the Kingdom. To review the full report and compare how all the countries stack up, go to: http://www.slideshare.net/wearesocialsg/social-digital-mobile-in-the-middle-east-north-africa-turkey/download
Young Saudis are changing their expectations about work, Al Arabiya TV reports. Rather than waiting around for high-status/low-productivity jobs in the public sector, they are now looking at and taking jobs in the service sector. They are bucking this (recent) historical social disdain for these jobs because they realize that any moral job that pays a salary is a respectable job and that earning a salary is much better than not earning a salary. Saudi males are starting to catch up with the women, who have had far more pragmatic ideas about work.
A large number of young Saudis have joined jobs that were considered beneath them in the past and are proving that such negative traditions and norms are not an obstacle to their ambitions.
It has become normal to see young Saudis working in men’s fashion shops, restaurants and coffee shops, serving customers to acquire the experience and work culture that will allow them to achieve higher goals.
These Saudis are reflected in the recent data released by the Ministry of Labor that showed the number of Saudis working in the private sector has reached 1.47 million in 2013, representing a 332.2 percent increase from 2012.
This increase was also helped by the ministry’s Saudization efforts and the security campaigns that were conducted against illegal workers, Al-Hayat daily reported.
A piece in the Arabic daily Okaz — here translated by its sister paper Saudi Gazette — calls attention to the widely disparate verdicts given out by Saudi courts. Three crimes, ranging from ‘celebrating Valentine’s Day’ to child rape, with support for terrorism in between, led to sentences ranging from one to 15 years, but not as you might expect, given the severity of the crimes.
This is nonsense, the writer says. Worse than the injustice meted out to the perpetrators, it calls the entire legal system into disrepute. The problem was supposed to be addressed starting 12 years ago, when the Council of Ministers called for documenting cases and verdicts and to make them known across the land. It hasn’t happened, clearly. And until it is done and until uniformity is required across the courts, the parody of law will just continue.
Confusing court rulings
Mishal Al-Sudairy | Okaz
I LEAVE it to the discretion of the reader to make their own mind up about three court verdicts issued by judges in different areas of the Kingdom.
These rulings, in my mind, amount to nothing more than black comedy.
The first judge was in Buraidah, Qassim province. He sentenced three young men who celebrated Valentine’s Day to prison terms from eight to 15 years. He also ruled that each of them be given 800 lashes.
The second judge was in Riyadh. He sentenced four defendants from four to 34 months in prison and banned them from traveling abroad after they served their prison terms. They were convicted of issuing forged passports to Saudi citizens to enable them to go out and join the fighting in Syria and Iraq.
The third judge was in Taif. He sentenced an Afghan expatriate to one year in prison, fined him SR1,000 and gave him 50 lashes. The man was convicted of dragging children out of their homes to sodomize them. He was also filming them.