News / Economy

IMF: Private Sector May Not Keep Pace with Saudi Youth Bulge

Saudi youths dance as they celebrate Eid al-Fitr in Riyadh, Aug. 19, 2012.
Saudi youths dance as they celebrate Eid al-Fitr in Riyadh, Aug. 19, 2012.
TEXT SIZE - +
Reuters
Saudi Arabia may not be able to create all the private sector jobs it needs for its rapidly growing population, which could lead to higher unemployment, the International Monetary Fund said on Wednesday.
 
The Saudi government has recognized that low employment among Saudi nationals is a long-term strategic challenge, especially after joblessness contributed to revolutions in nearby countries during the Arab Spring.
 
The world's largest oil exporter has invested in education and infrastructure, and has strict quotas regulating the number of Saudis and expatriates in private sector jobs. Saudi Arabia has more than 9 million expatriates whose remittances home provide important revenue for countries including Yemen, India, Pakistan and the Philippines.
 
Most of those expatriates work in the private sector, in retail and construction - jobs that Saudi citizens may not want or have the skills for, the IMF said.
 
“A large number of young people will enter the labor market in the next decade and beyond, and creating a sufficient number of rewarding jobs for them in the private sector will be a challenge,” the IMF said in its regular health check of the Saudi economy.
 
The Fund said recent history shows the private sector may not be able to absorb all the new job seekers. While total employment in the country has grown 8.5 percent from 2010 to 2012, employment among Saudi nationals has risen only 4.6 percent.
 
It also called on Saudi Arabia to address high unemployment among youth and educated women, which is higher than in other countries with similar incomes. Unemployment among Saudis is now 12 percent, but it is 30 percent for youth and 35 percent for women.
 
Central bank statistics from 2011 showed nine in 10 working Saudis were employed by the public sector, which is largely funded by oil revenue. The IMF said reducing reliance on public- sector jobs must be a priority, which means Saudi nationals must become more competitive and improve their skills.
 
Saudi Arabia needs to act now to boost growth in the private sector, as the oil output its economy is dependent on is likely to slow over the next five years, the IMF said.
 
The kingdom has been the third-best performer among the Group of 20 leading economies, after China and India. Its economy has grown an average of 6.25 percent in the last four years.
 
But the boom years may be behind it, as Saudi Arabia must adjust to a sharp rise in shale production in the United States, as well as the recovery of oil fields in Libya and Iraq, the IMF said.
 
The Washington-based Fund expects Saudi Arabia's economy to grow 4 percent this year and 4.4 percent in 2014, below government projections, as oil output falls 3.3 percent this year.
 
The IMF also called on Saudi Arabia to reduce its energy subsidies, as it has one of the highest levels of energy consumption in the world per person, and some of the lowest prices. The subsidies could start to bite into the government's budget and make the economy ever-more reliant on the energy sector.
 
“Staff recommended that the authorities start planning for an upward adjustment in domestic energy prices,” the IMF said.
 
The IMF has launched a big push in the past year to urge developing and advanced economies to rein in their energy subsidies in order to ease budgetary pressures and free up money to spend on education and healthcare.

You May Like

Algerians Vote in Presidential Election

There were few media reports of protests and clashes around the country, but so far no significant violence More

Sharks More Evolved than Previously Thought

The discovery could “profoundly affect our understanding of evolutionary history” More

Pakistan Military Asked to Protect Polio Workers

Request comes as authorities say a Taliban ban on vaccinations in 2012 and deadly attacks on anti-polio teams have prevented thousands of children from getting inoculated More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Google Buys Drone Companyi
|| 0:00:00
...
 
🔇
X
George Putic
April 15, 2014
In its latest purchase of high-tech companies, Google has acquired a manufacturer of solar-powered drones that can stay in the air almost indefinitely, relaying broadband Internet connection to remote areas. It is seen as yet another step in the U.S. based Web giant’s bid to bring Internet to the whole world. VOA’s George Putic reports.
Video

Video Google Buys Drone Company

In its latest purchase of high-tech companies, Google has acquired a manufacturer of solar-powered drones that can stay in the air almost indefinitely, relaying broadband Internet connection to remote areas. It is seen as yet another step in the U.S. based Web giant’s bid to bring Internet to the whole world. VOA’s George Putic reports.
Video

Video Ray Bonneville Sings the Blues and More on New CD

Singer/songwriter Ray Bonneville has released a new CD called “Easy Gone” with music that reflects his musical and personal journey from French-speaking Canada to his current home in Austin,Texas. The eclectic artist’s fan base extends from Texas to various parts of North America and Europe. VOA’s Greg Flakus reports from Austin.
Video

Video Millions Labor in Pakistan's Informal Economy

The World Bank says that in Pakistan, roughly 70 percent work in the so-called informal sector, a part of the economy that is unregulated and untaxed. VOA's Sharon Behn reports from Islamabad on how the informal sector impact's the Pakistani economy.
Video

Video Passover Celebrates Liberation from Bondage

Jewish people around the world are celebrating Passover, a commemoration of their liberation from slavery in Egypt more than 3,300 years ago. According to scripture, God helped the Jews, led by Moses, escape bondage in Egypt and cross the Red Sea into the desert. Zlatica Hoke reports that the story of the Jewish Exodus resonates with other people trying to escape slave-like conditions.
Video

Video Police Pursue Hate Crime Charges Against Kansas Shooting Suspect

Prosecutors are sifting through the evidence in the wake of Sunday’s shootings in a suburb of Kansas City, Missouri that left three people dead. A suspect in the shootings taken into custody is a white supremacist. As VOA’s Kane Farabaugh reports, he was well-known to law enforcement agencies and human rights groups alike.
Video

Video In Eastern Ukraine, Pro-unity Activists Emerge from Shadows

Amid the pro-Russian uprisings in eastern Ukraine, there is a large body of activists who support Ukrainian unity and reject Russian intervention. Their activities have remained largely underground, but they are preparing to take on their pro-Moscow opponents, as Henry Ridgwell reports from the eastern city of Donetsk.
Video

Video Basket Maker’s Skills Have World Reach

A prestigious craft show in the U.S. capital offers one-of-a-kind creations by more than 120 artists working in a variety of media. As VOA’s Julie Taboh reports from Washington, one artist lucky enough to be selected says sharing her skills with women overseas is just as significant.
Video

Video UN Report Urges Speedier Action to Avoid Climate Disaster

A new United Nations report says the world must switch from fossil fuels to cleaner energy sources to control the effects of climate change. The Intergovernmental Panel on Climate Change released the report (Sunday) following a meeting of scientists and government representatives in Berlin. The comprehensive review follows two recent IPCC reports that detail the certainty of climate change, its impacts and in this most recent report what to do about it. VOA’s Rosanne Skirble has the details.
AppleAndroid

World Currencies

EUR
USD
0.7225
JPY
USD
102.27
GBP
USD
0.5953
CAD
USD
1.0982
INR
USD
60.349

Rates may not be current.