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Indian workers hit by Nitaqat programme in Saudi Arabia

Riyadh, Saudi Arabia
Indian workers threatens with Saudi Arabia bringing in a new labour law that requires companies to hire one Saudi national for every 10 expatriate workers. The Nitaqat programme that came into force recently will hit an estimated 1.5 million Indians working in the West Asian nation the hardest.

The Saudi labour ministry plans to set up a commission to oversee the work of contractors and introduce some amendments next month to the Nitaqat system by reducing the required Saudization percentage for contracting companies implementing government projects, Saudi Gazette has reported. The move, which comes in response to criticisms by municipalities that complained about faltering projects, is expected to solve the problem of delayed projects in the country.

According to US government Saudi Arabia has an oil-based economy with strong government controls over major economic activities. It possesses about 17% of the world’s proven petroleum reserves, ranks as the largest exporter of petroleum, and plays a leading role in OPEC. The petroleum sector accounts for roughly 80% of budget revenues, 45% of GDP, and 90% of export earnings. Saudi Arabia is encouraging the growth of the private sector in order to diversify its economy and to employ more Saudi nationals. Diversification efforts are focusing on power generation, telecommunications, natural gas exploration, and petrochemical sectors. Over 5 million foreign workers play an important role in the Saudi economy, particularly in the oil and service sectors, while Riyadh is struggling to reduce unemployment among its own nationals. Saudi officials are particularly focused on employing its large youth population, which generally lacks the education and technical skills the private sector needs.

Riyadh has substantially boosted spending on job training and education, most recently with the opening of the King Abdallah University of Science and Technology – Saudi Arabia’s first co-educational university. As part of its effort to attract foreign investment, Saudi Arabia acceded to the WTO in December 2005 after many years of negotiations. The government has begun establishing six “economic cities” in different regions of the country to promote foreign investment and plans to spend $373 billion between 2010 and 2014 on social development and infrastructure projects to advance Saudi Arabia’s economic development.