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Saudi Arabia Announces Labor Relation Initiative

Saudi Arabia announces the 'Labor Relations Initiative'. (SPA)
Saudi Arabia announces the 'Labor Relations Initiative'. (SPA)
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Saudi Arabia Announces Labor Relation Initiative

Saudi Arabia announces the 'Labor Relations Initiative'. (SPA)
Saudi Arabia announces the 'Labor Relations Initiative'. (SPA)

Saudi Arabia launched on Wednesday the Labor Reform Initiative aimed at improving the contractual relationship between workers and employers.

The Ministry of Human Resource and Social Development said the initiative is also aimed at supporting its vision of establishing an attractive job market, empowering employees and developing the work environment in the Kingdom.

The reforms will allow foreign workers the right to change jobs by transferring their sponsorship from one employer to another, leave and re-enter the country and secure final exit visas without the consent of their employer, which had long been required.

The initiative is slated to come into effect on March 14, 2021. Saudi Arabia boasts some 10 million foreign workers.

The reforms are part of Vision 2030 aimed at making Saudi Arabia more attractive to foreign investors, expanding the private sector and diversifying the Kingdom's oil-dependent economy.

The ministry said the initiative will improve the efficiency of the work environment in Saudi Arabia and complement similar initiatives launched in this regard, including the Wage Protection System, the digital documentation of work contracts, the Labor Education and Awareness Initiative, and the launch of "Wedy" for the settlement of labor disputes.

The initiative seeks to increase the flexibility, effectiveness and competitiveness of the labor market and raise its attractiveness in line with the best international practices and Saudi labor law.

It also activates the contractual agreement between the employee and employer based on their employment contract through digital documentation of those contracts, which will contribute to reducing the disparity between the Saudi workers and the expatriates. This, in turn, will reflect positively on the job market by increasing employment opportunities for Saudis, while also increasing the attractiveness of the local job market for top talent.

The Exit and Re-Entry Visa reforms allow expatriate workers to travel outside the Kingdom without the employer's approval after submitting a request. The employer will be notified electronically of their departure.

The Final Exit Visa reforms allow the expatriate worker to leave the Kingdom after the end of the employment contract without the employer's consent, and will notify the employer electronically with the worker bearing all consequences (financial or otherwise) relating to breaking the employment contract. All three services will be made available to the public through the smartphone application “Absher” and the Human Resources Ministry’s “Qiwa” portal.

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Saudi Arabia's Digital Advertising Boom: Addressing Economic Leakage, Boosting Local Content

A digital advertising event recently held in Riyadh (Asharq Al-Awsat)
A digital advertising event recently held in Riyadh (Asharq Al-Awsat)
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Saudi Arabia's Digital Advertising Boom: Addressing Economic Leakage, Boosting Local Content

A digital advertising event recently held in Riyadh (Asharq Al-Awsat)
A digital advertising event recently held in Riyadh (Asharq Al-Awsat)

Saudi Arabia’s digital advertising sector is experiencing rapid growth, but a significant portion of its revenues is leaking to foreign platforms. To maximize the impact on the national economy, experts are calling for strategies to curb this outflow and redirect it to local channels.

The importance of retaining digital ad revenues lies in the substantial size of this market. It is estimated that approximately $1 billion in ad spent is lost annually to foreign platforms, representing a considerable loss to Saudi Arabia’s economy.

Dr. Ebada Al-Abbad, CEO of Marketing and Communications at Tadafuq, a Saudi digital advertising network, told Asharq Al-Awsat that the problem stems from the fact that although advertisers, products, and audiences are often local, the largest share of financial gains goes to foreign platforms. He estimated that 70-80% of the $1.5 billion spent on digital advertising in Saudi Arabia in 2022 went to global platforms such as Google and Facebook. This results in the national economy losing nearly $1 billion annually from this sector alone.

Al-Abbad noted that government agencies in Saudi Arabia also contribute to the outflow. He explained that public sector spending on digital advertising, intended to raise awareness among citizens and residents, frequently ends up on foreign platforms. Government spending makes up about 20-25% of the total digital ad market in the Kingdom, meaning hundreds of millions of riyals leave the country annually, weakening the local digital economy.

Al-Abbad argues that Saudi Arabia needs strong local digital ad networks to keep this revenue within the national economy. These networks would help create jobs, drive innovation, and promote cultural diversity in digital content. Developing local platforms would also enhance Saudi Arabia’s digital sovereignty by ensuring that data remains within the country and is not controlled by foreign entities.

Moreover, local networks would reduce dependence on international platforms, ensuring that the economic benefits of digital advertising remain in the Kingdom, he said, stressing that this would align with Saudi Arabia’s broader Vision 2030 goals, which emphasize building a robust, diversified economy driven by local industries and digital transformation.

Globally, the digital advertising sector is growing rapidly. In 2022, worldwide spending on digital ads reached $602 billion, and it is projected to hit $876 billion by 2026. In the Middle East and North Africa (MENA) region, the digital ad market grew to $5.9 billion in 2022, with Saudi Arabia’s market accounting for over $1.5 billion.

In other countries, the digital ad sector plays a crucial role in boosting national economies. For example, in the United States, the digital advertising industry contributed $460 billion to the GDP in 2021, about 2.1% of the total. In the UK, the sector accounted for 1.8% of GDP in 2022. This shows how important digital advertising can be in driving economic growth.

One of the key challenges facing Saudi Arabia’s digital ad sector is the dominance of global platforms like Google and Facebook, which control 60% of the global digital ad market, Al-Abbad told Asharq Al-Awsat. This dominance results in a significant outflow of revenue and allows these platforms to control digital data and content. He warned that this could undermine Saudi Arabia’s national sovereignty over its digital economy.

To counter this, he emphasized that Saudi Arabia needs to build competitive local networks that can retain a larger share of the market. This will not only keep more revenue in the country but also strengthen the Kingdom’s control over its digital data and content.