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Saudi Labor Market to Witness Radical Reforms

The Saudi Ministry of Human Resources and Social Development is committed to implementing radical reforms in the labor market in both the public and private sectors (Asharq Al-Awsat).
The Saudi Ministry of Human Resources and Social Development is committed to implementing radical reforms in the labor market in both the public and private sectors (Asharq Al-Awsat).
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Saudi Labor Market to Witness Radical Reforms

The Saudi Ministry of Human Resources and Social Development is committed to implementing radical reforms in the labor market in both the public and private sectors (Asharq Al-Awsat).
The Saudi Ministry of Human Resources and Social Development is committed to implementing radical reforms in the labor market in both the public and private sectors (Asharq Al-Awsat).

The Saudi Ministry of Human Resources and Social Development underlined its commitment to implement radical reforms in the labor market in both the public and private sectors. Those reforms, according to the ministry, include a set of initiatives that would increase economic participation, raise skills and productivity and improve market efficiency, in line with the goals of the Kingdom’s Vision 2030.

In comments to Asharq Al-Awsat, the ministry said that the reforms aim to support the development of existing systems and regulations, thus contributing to reforming the labor market and providing the appropriate legislative environment for the private sector, increasing its growth and creating an appropriate work environment that motivates the workers.

“The Saudi labor market has witnessed in recent years an escalating and continuous development, which reflects the leadership’s determination to support this sector as the backbone of the economy. Moreover, the Kingdom is witnessing an influx of huge investments, which requires keeping pace with the development by benefiting from the experiences of other countries, to reach the aspired goals under the leadership of the Saudi Crown Prince,” a former member of the Council of Saudi Chambers, Abdullah Al-Meleihi, told Asharq Al-Awsat.

Al-Meleihi added that the proposed amendments aim to improve the work environment, raise efficiency and maximize competitiveness to meet the requirements of the new leading projects, including The Line and NEOM.

Consultant and professor of law at the Institute of Public Administration in Riyadh, Dr. Osama Al-Obaidi, told Asharq Al-Awsat that the draft amendment of the labor system aims to improve the business environment, reform the labor market, and provide an appropriate legal and regulatory framework for the development of the private sector, as well as supporting women’s participation.

Al-Obaidi stated that reducing the percentage of required nationalization for companies would help curb the costs and increase profits, thus boost economic growth.

The amendments will also lead to an increase in the localization of jobs by reducing the weekly working hours to 40 hours instead of 48 hours and adjusting the working hours in Ramadan to 30 hours per week instead of 36 hours, according to Al-Obaidi.

For his part, Economist Dr. Khalil Khoja told Asharq Al-Awsat that the package of amendments, proposals, procedures and initiatives recently launched by the Ministry of Human Resources and Social Development would enhance the digital economy

“The amendments cannot be separated from the Kingdom’s plan to provide decent job opportunities for citizens by intensifying rehabilitation and training programs that aim to produce qualified and professional cadres,” he emphasized.

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Federal Reserve Cuts Key Interest Rate by a Quarter-point

US Federal Reserve Chair Jerome Powell attends a press conference following a two-day meeting of the Federal Open Market Committee on interest rate policy in Washington, US, November 7, 2024. REUTERS/Annabelle Gordon
US Federal Reserve Chair Jerome Powell attends a press conference following a two-day meeting of the Federal Open Market Committee on interest rate policy in Washington, US, November 7, 2024. REUTERS/Annabelle Gordon
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Federal Reserve Cuts Key Interest Rate by a Quarter-point

US Federal Reserve Chair Jerome Powell attends a press conference following a two-day meeting of the Federal Open Market Committee on interest rate policy in Washington, US, November 7, 2024. REUTERS/Annabelle Gordon
US Federal Reserve Chair Jerome Powell attends a press conference following a two-day meeting of the Federal Open Market Committee on interest rate policy in Washington, US, November 7, 2024. REUTERS/Annabelle Gordon

The Federal Reserve cut its key interest rate Thursday by a quarter-point in response to the steady decline in the once-high inflation that had angered Americans and helped drive Donald Trump’s presidential election victory this week.
The rate cut follows a larger half-point reduction in September, and it reflects the Fed’s renewed focus on supporting the job market as well as fighting inflation, which now barely exceeds the central bank’s 2% target, The Associated Press reported.
Asked at a news conference how Trump's election might affect the Fed's policymaking, Chair Jerome Powell said that "in the near term, the election will have no effects on our (interest rate) decisions.”
But Trump’s election, beyond its economic consequences, has raised the specter of meddling by the White House in the Fed’s policy decisions. Trump has argued that as president, he should have a voice in the central bank’s interest rate decisions. The Fed has long guarded its role as an independent agency able to make difficult decisions about borrowing rates, free from political interference. Yet in his previous term in the White House, Trump publicly attacked Powell after the Fed raised rates to fight inflation, and he may do so again.
Asked whether he would resign if Trump asked him to, Powell, who will have a year left in his second four-year term as Fed chair when Trump takes office, replied simply, “No.”
And Powell said that in his view, Trump could not fire or demote him: It would “not be permitted under the law,” he said.
Thursday’s Fed rate cut reduced its benchmark rate to about 4.6%, down from a four-decade high of 5.3%. The Fed had kept its rate that high for more than a year to fight the worst inflation streak in four decades. Annual inflation has since fallen from a 9.1% peak in mid-2022 to a 3 1/2-year low of 2.4% in September.
When its latest policy meeting ended Thursday, the Fed issued a statement noting that the "unemployment rate has moved up but remains low,” and while inflation has fallen closer to the 2% target level, it “remains somewhat elevated.”
After their rate cut in September — their first such move in more than four years — the policymakers had projected that they would make further quarter-point cuts in November and December and four more next year. But with the economy now mostly solid and Wall Street anticipating faster growth, larger budget deficits and higher inflation under a Trump presidency, further rate cuts may have become less likely. Rate cuts by the Fed typically lead over time to lower borrowing costs for consumers and businesses.
Powell declined to be pinned down Thursday on whether the Fed would proceed with an additional quarter-point rate cut in December or the four rate cuts its policymakers penciled in for 2025.