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.
    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

    Clinton, Trump and the 'Woman’s Card'

    Ask supporters of Democratic front-runner in US presidential campaign, and they’ll tell you Republican presidential candidate is playing a dangerous hand

    Russian Censorship Group Seeks Chinese Help to Better Control Internet

    At recent Safe Internet League forum in Moscow, speakers from both nations underscored desire for authorities to further limit and control information online

    Video Makeshift Pakistani School Helps Slum Kids

    Free classes in Islamabad park serve a few of the country’s nearly 25 million out-of-school youths; NGO cites ‘education crisis’

    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.
    Turkish Kurd Islamist Rally Stokes Tensionsi
    X
    April 29, 2016 12:28 AM
    In a sign of the rising power of Islamists in Turkey, more than 100,000 people recently gathered in Diyarbakir, the main city in Turkey’s predominantly Kurdish southeast, to mark the birthday of the Prophet Muhammad. The gathering highlighted tensions with the pro-secular Kurdish nationalist movement. Dorian Jones reports from Diyarbakir.
    Video

    Video Turkish Kurd Islamist Rally Stokes Tensions

    In a sign of the rising power of Islamists in Turkey, more than 100,000 people recently gathered in Diyarbakir, the main city in Turkey’s predominantly Kurdish southeast, to mark the birthday of the Prophet Muhammad. The gathering highlighted tensions with the pro-secular Kurdish nationalist movement. Dorian Jones reports from Diyarbakir.
    Video

    Video Pakistani School Helps Slum Kids

    Master Mohammad Ayub runs a makeshift school in a public park in Islamabad. Thousands of poor children have benefited from his services over the years, but, as VOA's Ayesha Tanzeem reports, roughly 25 million school-age youths don't get an education in Pakistan.
    Video

    Video Florida’s Weeki Wachee ‘Mermaids’ Make a Splash

    Since 1947, ‘mermaids’ have fascinated tourists at central Florida’s Weeki Wachee Springs State Park with their fluid movements and synchronized ballet. Performing underwater has its challenges, including cold temperatures and a steady current, as VOA’s Lin Yang and Joseph Mok report.
    Video

    Video Somali, African Union Forces Face Resurgent Al-Shabab

    The Islamic State terror group claimed its first attack in Somalia earlier this week, though the claim has not been verified by forces on the ground. Meanwhile, al-Shabab militants have stepped up their attacks as Somalia prepares for elections later this year. Henry Ridgwell reports there are growing frustrations among Somalia’s Western backers over the country’s slow progress in forming its own armed forces to establish security after 25 years of chaos.
    Video

    Video Bangladesh Targeted Killings Spark Wave of Fear

    People in Bangladesh’s capital are expressing deep concern over the brutal attacks that have killed secular blogger, and most recently a gay rights activist and an employee of the U.S. embassy. Xulhaz Mannan, an embassy protocol officer and the editor of the country’s only gay and transgender magazine Roopban; and his friend Mehboob Rabbi Tanoy, a gay rights activist, were hacked to death by five attackers in Mannan’s Dhaka home earlier this month.
    Video

    Video Documentary Tells Tale of Chernobyl Returnees

    Ukraine this week is marking the 30th anniversary of the world's worst nuclear accident, at the Chernobyl nuclear power plant. Soviet officials at first said little about the accident, but later evacuated a 2,600-square-kilometer "exclusion zone." Some people, though, came back. American directors Holly Morris and Anne Bogart created a documentary about this faithful and brave community. VOA's Tetiana Kharchenko reports from New York on "The Babushkas of Chernobyl." Carol Pearson narrates.
    Video

    Video Nigerians Feel Bite of Buhari Economic Policy

    Despite the global drop in the price of oil, Nigerian President Muhammadu Buhari has refused to allow the country's currency to devalue, leading to a shortage of foreign exchange. Chris Stein reports from Lagos businessmen and consumers are feeling the impact as the country deals with a severe fuel shortage.
    Video

    Video  Return to the Wild

    There’s a growing trend in the United States to let old or underused golf courses revert back to nature. But as Erika Celeste reports from one parcel in Grafton, Ohio, converting 39 hectares of land back to green space is a lot more complicated than just not mowing the fairway.
    Video

    Video West Urges Unity in Libya as Migrant Numbers Soar

    The Italian government says a NATO-led mission aimed at stemming the flow of migrants from Libya to Europe could be up and running by July. There are concerns that the number of migrants could soar as the route through Greece and the Balkans remains blocked. Western powers say the political chaos in Libya is being exploited by people smugglers — and they are pressuring rival groups to come together under the new unity government. VOA's Henry Ridgwell reports.
    Video

    Video Russia’s TV Rain Swims Against Tide in Sea of Kremlin Propaganda

    Russia’s media freedoms have been gradually eroded under President Vladimir Putin as his government has increased state ownership, influence, and restrictions on critical reporting. Television, where most Russians get their news, has been the main target and is now almost completely state controlled. But in the Russian capital, TV Rain stands out as an island in a sea of Kremlin propaganda.

    Special Report

    Adrift The Invisible African Diaspora

    World Currencies

    EUR
    USD
    0.8769
    JPY
    USD
    107.28
    GBP
    USD
    0.6842
    CAD
    USD
    1.2528
    INR
    USD
    66.384

    Rates may not be current.