Saudi Arabia has decided that it will be giving government contracts to only those companies which have regional headquarters in the kingdom. But how will this benefit the Indians seeking jobs in the Gulf country, which is the largest economy in the region?
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Saudi Arabia’s Finance Minister has told news agency Reuters that international companies which want to participate in the Saudi government’s investment opportunities “will have to make a choice” and establish regional headquarters in the kingdom as of 2024 or they will not win government contracts.
Mohammed al-Jadaan said: “If a company refused to move their headquarters to Saudi Arabia, it is absolutely their right and they will continue to have the freedom to work with the private sector in Saudi Arabia.”
“But as long as it is related to the government contracts, they will have to have their regional headquarters here.”
In order to reduce the country’s economic dependence on oil exports, Saudi Arabia’s Crown Prince Mohammed bin Salman has taken several measures. As part of the ambitious reform strategy to diversify the oil-dependent economy, the Crown Prince is aiming to attract foreign investment and create jobs in order to make the Kingdom the center of economic and trade in the region by 2030.
Reasoning how the move will create opportunities, Jadaan said: “Saudi Arabia has the largest economy and population in the region, while our share of regional headquarters is negligible, less than 5% currently. You can imagine what does this decision means in terms of FDI (foreign direct investment), knowledge transfer, and job creation.”
Indian experts have welcomed the move and said that the drop in oil prices, pandemic, and the lockdown posed challenges to the economy and job market, and hence, this move will generate job opportunities.
Ambassador @drausaf met Mr Ali Abdullah Kanoo, Deputy Chairman of Kanoo Group in Dammam and discussed trade and investment opportunities. pic.twitter.com/sA36w8oZ5S
— India in Saudi Arabia (@IndianEmbRiyadh) February 9, 2021
Considering that opening up the economy means there will be an inflow of FDI, which will create more jobs, they say, the move seems lucrative. An expert has told BBC that currently, there are 2.8 million Indians working in the Kingdom, of which 30% are skilled and the rest are semi-skilled or unskilled labor.
According to the experts, the Indian government should provide skill development training to the workers who have returned from Gulf countries due to the pandemic so that they are eligible for jobs in Saudi Arabia. It has been highlighted that competition to grab these jobs would be high.
After Indians, Saudi Arabia is the largest market for Pakistani workers. As per the latest statistics, the country hosts nearly 1.06 million Pakistanis, most of them working in unskilled sectors like construction.
Reports suggest that Saudi’s move has posed a challenge to countries like the UAE, which house regional headquarters for many companies. Saudi Arabia’s finance minister has recognized that Dubai as a major regional business hub has its own competitive advantage.
But at the same time, he stressed that they will be improving the business environment and quality of life “so that companies and people feel comfortable moving to Riyadh”. While Dubai is known for its urban lifestyle and buzzing nightlife which makes it an attractive destination for foreign companies, it is to be seen if Saudi Arabia will be able to match Riyadh to that level.