Tuesday, April 16, 2013

Nitaqat: Towards a Saudi New Deal

The US-Saudi Trade Group, December 14th 2012


An odd feature of ongoing media commentary on reform in the context of the Arab Spring is the neglect of the economic domain.  As if economic problems were not a major cause of the uprisings, and fixing them not a critical part of the solution.

At any of the major Middle East policy blogs and on the Twittersphere, politics completely dominates the discussion.   One almost gets the impression that the long-term stability and prosperity of Egypt depends upon the drafting of a flawless constitution or finding the perfect theoretical balance between Presidential and Military power, and not solving or at least mitigating the massive unemployment problem that has not changed one bit under the new government......

If positive change can only take the form of holding elections or writing new constitutions, than on that basis not much is happening in the Kingdom. But if we take a broader view, and consider that the economic domain is equally important, the situation looks different, especially with Nitaqat, an aggressive Saudi government policy begun in the summer of 2011 and aimed at solving the unemployment problem among Saudi nationals by decreasing the availability of cheap foreign labor.

While rarely receiving more than a superficial mention in Western media, Nitaqat is a serious attempt to adjust the employee/employer balance in Saudi Arabia and is, in its own way, as critical to the Kingdom’s long-term social and political well-being as anything occurring across the Red Sea in Egypt.