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.
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

Photogallery Belgian Security Measures Foreshadow New Normal for Europe

Rising threat of terrorism, disaffected Muslim populations and open borders, along with refugee, migrant crisis, are creating perfect storm for Europe, which some analysts fear continent is ill-suited to weather

Competing Claims of Responsibility for Mali Hotel Attack

Malian authorities ask public for help in identifying gunmen killed in attack, amid conflicting claims of responsibility from multiple jihadist groups active in the country

Video Debt-ridden Refugees Await Onslaught of Lebanese Winter

Aid agencies are attempting to reduce potentially devastating consequences of freezing conditions and snowstorms that killed eight last year, including three Syrian refugees

This forum has been closed.
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.
After Paris Attacks, France Steps Up Fight Against ISi
November 24, 2015 3:04 AM
The November 13 Paris attacks have drawn increased attention to Syria, where many of the suspected perpetrators are said to have received training. French President Francois Hollande is working to build a broad international coalition to defeat Islamic State in Syria and in Iraq. Zlatica Hoke reports.

Video After Paris Attacks, France Steps Up Fight Against IS

The November 13 Paris attacks have drawn increased attention to Syria, where many of the suspected perpetrators are said to have received training. French President Francois Hollande is working to build a broad international coalition to defeat Islamic State in Syria and in Iraq. Zlatica Hoke reports.

Video US, Cambodian Navies Pair Up in Gulf of Thailand

The U.S. Navy has deployed one of its newest and most advanced ships to Cambodia to conduct joint training drills in the Gulf of Thailand. Riding hull-to-hull with Cambodian ships, the seamen of the USS Fort Worth are executing joint-training drills that will help build relations in Southeast Asia. David Boyle reports for VOA from Preah Sihanouk province.

Video Americans Sharpen Focus on Terrorism

Washington will be quieter than usual this week due to the Thanksgiving holiday, even as Americans across the nation register heightened concerns over possible terrorist threats. VOA’s Michael Bowman reports new polling data from ABC News and the Washington Post newspaper show an electorate increasingly focused on security issues after the deadly Islamic State attacks in Paris.

Video World Leaders Head to Paris for Climate Deal

Heads of state from nearly 80 countries are heading to Paris (November 30-December 11) to craft a global climate change agreement. The new accord will replace the Kyoto Protocol on Climate Change that expired in 2012.

Video Uncertain Future for Syrian Refugee Resettlement in Illinois

For the trickle of Syrian refugees finding new homes in the Midwest city of Chicago, the call to end resettlement in many U.S. states is adding another dimension to their long journey fleeing war. Organizations working to help them integrate say the backlash since the Paris attacks is both harming and helping their efforts to provide refugees sanctuary. VOA's Kane Farabaugh reports.

Video Creating Physical Virtual Reality With Tiny Drones

As many computer gamers know, virtual reality is a three-dimensional picture, projected inside special googles. It can fool your brain into thinking the computer world is the real world. But If you try to touch it, it’s not there. Now Canadian researchers say it may be possible to create a physical virtual reality using tiny drones. VOA’s George Putic reports.

Video New American Indian Village Takes Visitors Back in Time

There is precious little opportunity to experience what life was like in the United States before its colonization by European settlers. Now, an American Indian village built in a park outside Washington is taking visitors back in time to experience the way of life of America's indigenous people. Carol Pearson narrates this report from VOA's June Soh.

Video Even With Hometown Liberated, Yazidi Refugees Fear Return

While the northern Iraqi town of Sinjar has been liberated from Islamic State forces, it's not clear whether Yazidi residents who fled the militants will now return home. VOA’s Mahmut Bozarslan talked with Yazidis, a religious and ethnic minority, at a Turkish refugee camp in Diyarbakır. Robert Raffaele narrates his report.

Video Nairobi Tailors Make Pope Francis’ Vestments

To ensure the pope is properly attired during his visit, the Kenya Conference of Catholic Bishops asked the Dolly Craft Sewing Project in the Nairobi slum of Kangemi to make the pope's vestments, the garments he will wear during the various ceremonies. Jill Craig reports.

Video Cross-Border Terrorism Puts Europe’s Passport-Free Travel in Doubt

The fallout from the Islamic State terror attacks in Paris has put the future of Europe’s passport-free travel area, known as the "Schengen Zone," in doubt. Several of the perpetrators were known to intelligence agencies, but were not intercepted. Henry Ridgwell reports from London European ministers are to hold an emergency meeting Friday in Brussels to look at ways of improving security.

Video El Niño Brings Unexpected Fish From Mexico to California

Fish in an unexpected spectrum of sizes, shapes and colors are moving north, through El Niño's warm currents from Mexican waters to the Pacific Ocean off California’s coast. El Nino is the periodic warming of the eastern and central Pacific Ocean. As Faiza Elmasry tells us, this phenomenon thrills scientists and gives anglers the chance of a once-in-a-lifetime big catch. Faith Lapidus narrates.

Video Terrorism in Many Forms Continues to Plague Africa

While the world's attention is on Paris in the wake of Friday night's deadly attacks, terrorism from various sides remains a looming threat in many African countries. Nigerian cities have been targeted this week by attacks many believe were staged by the violent Islamist group Boko Haram. In addition, residents in many regions are forced to flee their homes as they are terrorized by armed militias. Zlatica Hoke reports.

Video Study: Underage Marriage Rate Higher for Females in Pakistan

While attitudes about the societal role of females in Pakistan are evolving, research by child advocacy group Plan International suggests that underage marriage of girls remains a particularly big issue in the country. VOA’s Ayesha Tanzeem reports how such marriages leads to further social problems.

VOA Blogs

World Currencies


Rates may not be current.