Nitaqat

Nitaqat, the localisation System for Jobs in the Kingdom of Saudi-Arabian-Arabian-Arabian Arabia cause for denial of prank opportunities for extradites Guiding Principle In order to reduce the unemployment rate among the Saudi citizens, the Saudi authorities issued a new-fangled clay for the jam of jobs in Saudi Arabia under the appellation of Nitaqat. The new system supplants the system utilize since 1994 under the name of The Saudization. Nitaqat adopts several principles, which impart fork over jounces on non-Saudis functional in the Kingdom.A. Introduction The economy in Saudi Arabia as it is the depicted object in different states of the Gulf Coope dimensionn Council (GCC) depends rotundly on the existence of a large proportion of expatriates1 carrying for various boldnesss in the private and unrestricted sector. However, unlike the other states of the GCC, Saudi Arabia has large number of unemployed citizens2, which creates a state of resentment among those citizens. B. The SaudizationIn an attempt to reduce the unemployment rate among the citizens, the Saudi establishment applied a system in 1994 for the localization of jobs under the name of The Saudization. The basic principal of the system was the requirement to appoint certain constituent of the total workforce of all the establishments existing in the Kingdom from the Saudi citizens. This percentage varies in accordance to the military action of the establishment. Generally the percentage was hardened by 30%.However, due to several reasons, the system did not obtain the desired objectives and mostly the 30% has not been reached. Now, to a greater extent than 6. 5 meg non-Saudi atomic number 18 operatives in the private sector of the Kingdom compared to 700 thousand Saudis. In addition, more than 2 zillion work endorses were issued during the preceding 2 (2) years. C. Nitaqat at that placefore, the Saudi political relation has endeavoured to find other soluti ons to eliminate the phenomenon of unemployment among Saudi nationals. The efforts of the authorities provideed in the implementation of several strategies.The most important of these strategies was the issuance of a new system under the name Nitaqat for localizing the jobs in the Kingdom to replace the system of Saudization. The name Nitaqat means Ranges in Arabic, which actually represents the main opinion of the new system as the main obstacles faced the previous system that it was not practical to apply nonpareil fixed percentage, regardless(prenominal) of the crabby circumstances of each activity, such as the availability of the qualified workforce for certain activities.Nitaqat divides the beat back market into 41 activities and each activity into 5 sizes (Giant, Large, Medium, Small and really Small) to contain in total 205 categories. The performance of the establishment in the localization of the jobs is to be evaluated compared with the similar establishments acti vity and size in order to set ab disclose fair standard for the paygrade After the evaluation, Nitaqat classifies these establishments into grasps (Excellent, grand, sensationalistic and bolshie) based on the ratio of the citizens working in the establishment.The Excellent and Green range, which are the ranges with the highest localization ratios, leave alone be rewarded, art object the system deals firmly with the Red range, which is the range with the lowest localization ratio and gives more time for the xanthous range to ad sightly their positions, existence the average range. The motive of applying the Nitaqat system is to make the appointment of Saudi citizens represent a competitive advantage for the establishments in the Kingdom. D.The Rewards to the Excellent and Green Ranges and the Disadvantages of the Red and Yellow Ranges. The MoL has granted the establishments located in the Excellent or in the Green Ranges several advantages by giving the establishments the eligibility to issue work visas for the maturement of new business. Furthermore the MoL go away give them the ability to set near with non-Saudi doers from the establishments of the Red and the Yellow ranges in the Saudi market, which allows such establishments to benefit from their ensure and presence.This leave alone result in granting the establishments that have achieved high rates of localization the opportunity to appoint non-Saudi workers with no need to issue new work visas, which helps to rationalization the recruitment and employment of additional non-Saudi labor. In contrast, the establishments located in the Red or in the Yellow range will be forced to speed the localization of the jobs within the establishments to upgrade their range to the Green or the Excellent range to maintain the expats they have.Otherwise, the establishments located in these ranges Red and Yellow ranges will be denied from obtaining new or alternative visas, mislay control over the non- Saudi workers in the establishment as they will have the freedom of contract with a new employer and will not be allowed to obtain new work visas to appoint new-non-Saudis workers or to set up a new subsidiary or branch. DOHA Thousands of Asian expatriates in Saudi Arabia are facing the prospect of unemployment and deportation with the Saudi organization going ahead with its job nationalisation drive, called Nitaqat.This has sent shockwaves across the petite south Indian state of Kerala, which has more than half-a- billion of its people working in Saudi Arabia. The Saudi authorities are cracking down on companies that have failed to achieve a job nationalisation target, the deadline for which passed last Wednesday. legal philosophy enforcement attainicials have reportedly booked a large number of expatriates for violating the residence jurisprudence over the past week and many more are expected to be declared mislabeled residents.The labor party ministry has identified about 250,000 small and medium-sized enterprises that have failed to comply with the Nitaqat provision of employing at least one Saudi national in the red category. The deadline for complying with the provision passed on parade 27, verbalize a report carried by Khaleej Times yesterday. According to Nitaqat provisions, the ministry will not renew work permits of employees in the red category. This means they will have to leave the country. The Saudi cabinet has already passed a right to arrest and deport such workers.According to Saudi newspapers, about two million expatriates are likely to lose their jobs as a direct result of implementation of the Nitaqat policy. The workers are mainly from India, Pakistan, Bangladesh, Sri Lanka, the Philippines, Egypt, Yemen, and Indonesia. Indians constitute the largest chunk of expatriates in Saudi Arabia, and among them Keralites are the largest group. According to a young study by Kerala-based concentre for Development Studies, the number of K eralites in Saudi Arabia in 2011 was 574,739, said the daily.Nitaqat will hit Keralites the hardest as a substantial number of them are working in small and medium-sized enterprises. The majority of Keralites in Saudi Arabia are from the northerly Malabar region of the state, said the report. Kerala yesterday urged the Indian government to intervene in the matter so that Saudi Arabia takes a liberal approach to implementing the Nitaqat policy. The new policy might lead to denial of job opportunities to a large number of expatriates from India, especially from Kerala, Chief Minister Oommen Chandy said in a letter to Prime Minister Manmohan Singh. It has come to my notice that the Kingdom of Saudi Arabia has initiated strong steps to implement the Nitaqat law to expand employment avenues for its nationals, which whitethorn ultimately lead to the denial of job opportunities for expatriates, he said. Conceding that thither were limits to Indian intervention in internal policy decisions of Saudi Arabia, Chandy said but an appeal to the Saudi Arabian authorities to give more time for the implementation of Nitaqat may give breathing space for the expatriates and evacuate flying repercussions. ARTICLESWhat Nitaqat means for Kerala By P M Mathew 13th April 2013 0725 AM The Nitaqat (classification) law being implemented by the Kingdom of Saudi Arabia makes it mandatory for Saudi Companies to reserve 10 per cent of jobs for Saudi nationals. Saudi Arabia has very strong socio-economic reasons to justify such a policy. Unlike other gulf countries Saudi Arabia itself has large number of unemployed citizens. According to recent estimates the unemployment rate among Saudi nationals has reached 12 per cent. It is also reported that more than 6. million non-Saudis are working in the private sector of the Kingdom compared to 7,00,000 Saudis. In 2012 there were 3,40,000 firms in the Kingdom that did not employ any Saudi. Of easy there is a growing feeling of resentment among the citizens of Saudi Arabia resulting from the labour market competition they face from expatriate workforce. The Nitaqat law is aimed at eliminating unemployment and localising jobs in the Kingdom. Nitaqat seeks to replace the 1994 scheme of Saudization which required 30 per cent of the jobs to be close for Saudi citizens.Saudization scheme failed due to the inherent loopholes in the system and the targeted 30 per cent localisation of jobs could not be achieved. The new law, Nitaqat, divides the Saudi labour market into 41 activities and each activity into 5 sizes (Giant, Large, Medium, Small and Very Small) to have in total 205 categories. Nitaqat classifies establishments into ranges (Excellent, Green, Yellow and Red) based on the ratio of the citizens working in the establishment. The Excellent and Green range, which are the ranges with the highest localisation ratios, will be rewarded with incentives.The new law proposes to deal firmly with the Red range, the range characteri sed by the lowest localisation ratio. More time is given to the Yellow range to improve their positions, it being the medium range. The most recent additions to the Nitaqat law that an expatriate worker should work only under his sponsor and the worker is not meant to perform any job other than the one mentioned on his job card have raised more than panic among the expatriate workers. More over the Saudi government has increased the fee for revolution labour cards (iqamas) to SAR2, 500 from SAR100.The strict implementation of the Nitaqat law recently has raised much concern in Kerala. Majority of the Indian migratory labour in Saudi Arabia are from Kerala. In 2011, some 5,70,000 Keralites were working in Saudi Arabia. Though the impact of Nitaqat would be on less than 3 per cent of this migrant population remittances by them were consistently bestow to the economy of the state, especially to the northern districts of Malappuram, Kozhikode, Kannur and Kasargode. The inflow of re mittance payments from Saudi Arabia has intimately raised living standards in these districts.Saudi Arabia continues to be the most desired finis among the low and semi-skilled Keralites. The strict adherence to the Nitaqat regulations will result in immediate job losses and reduced job opportunities. Many small outstrip shops and establishments in Saudi Arabia are run by Keralites under licences in the names of Saudi nationals. Now all such shops and establishments must have 10 per cent of their employees from among Saudi nationals who should be paid at least 3 times more salary than their expatriate counterparts. It is almost undoable now to run companies on the licences given to Saudi nationals.Strict actions are being taken against benami businesses. Most shops run by Keralites are already closed. The impact of the crackdown on illegal foreign workers in Saudi Arabia will have serious consequences for Keralas economy. The sudden exodus of the unemployed could trigger off ec onomic crisis and social unrest in the state. The sudden fall in remittances from Saudi Arabia may lead to a ripple effect on interlinked sectors like real estate, construction, transport, etcetera The problems will be much more if other gulf nations too emulate the Saudi policy.The job losses and reduced job opportunities are expected to aggravate in the attack days since Saudi labour ministry has reconsidered the liberal sponsorship rules that are prevailing. Under the revaluation Intelligent Scheme (IIS) inspection of company premises and residences of free visa holders are being intensified. Most raids at labour camps are unannounced. The government also issued an order that iqama (labour card) violators will be arrested in raids. On an parking brake basis both the central and state governments must plan out strong rehabilitation packages for the unemployed Saudi drive outees.The assistance offered for safe return and sponsoring the air fares of the returnees are all short term relief measures by the Government of India. The most recent announcement by the Saudi organization that Nitaqat inspections will be temporarily stopped for 3 months to allow illegal immigrants to legalise their stay in Saudi Arabia is to be viewed only as a terminable relief. Ryadh governors recent order of deferring the shape of catching illegal migrants in Riyadh also provides some temporary relief to the illegal migrants.Given the proven strictness of the Saudi administration, the statements made by Kerala ministers that the expatriates need not panic and that the issue could be bilaterally solved by dialogue with Saudi authorities are not providing much hope to expatriates. According to leading immigration trend analysts in Kerala the Saudi crackdown on illegal migrants should be viewed as a blessing in disguise since it is going to open up more opportunities for the legal migrants from the state. There is no need for the legal immigrant worker to panic.The Nitaqat effec t is not just on Indians. Lakhs of illegal migrants in Saudi Arabia are from countries like Pakistan, Bangladesh, Philippines, Egypt, etc. Kerala can grab this opportunity by providing the needed skills to the future migrants and allowing them to immigrate legally. Kerala must focus on more employment opportunities for its labour force. The government should also undertake massive investments in infrastructure and industrial information to boost up employment opportunities. The author is professor of economics at Christ University, Bangalore