Saudi Labor Reform Initiative Goes Into Effect

On Sunday, March 14, 2021, the new Labor Reform Initiative (LRI), which seeks to “improve the contractual relationship” for workers in the Kingdom’s private sector, will come into force | Asharq Al-Awsat
On Sunday, March 14, 2021, the new Labor Reform Initiative (LRI), which seeks to “improve the contractual relationship” for workers in the Kingdom’s private sector, will come into force | Asharq Al-Awsat
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Saudi Labor Reform Initiative Goes Into Effect

On Sunday, March 14, 2021, the new Labor Reform Initiative (LRI), which seeks to “improve the contractual relationship” for workers in the Kingdom’s private sector, will come into force | Asharq Al-Awsat
On Sunday, March 14, 2021, the new Labor Reform Initiative (LRI), which seeks to “improve the contractual relationship” for workers in the Kingdom’s private sector, will come into force | Asharq Al-Awsat

Saudi Arabia’s Labor Reform Initiative (LRI), which was announced last November, has gone into effect as of Sunday, bringing the kingdom a step closer to its goal of developing human capital and empowering people by fostering a competitive but fair working environment.

Experts have confirmed that the initiative is a fundamental shift in the Saudi labor market and the relationship between the employer and expatriate workers.

They stressed the importance of improving the local labor market to match the kingdom’s aspirations and attract skilled workers.

The job mobility service offered by LRI helps eliminate unfair control and weak management of employment and forces employers to abide by the contractual relationship.

The vision of the LRI is to create an attractive labor market in the Kingdom that offers flexible working conditions for the contractual workers and helps to empower and improve human resources.

Prior to the reforms, sponsored foreign workers needed to take permission from their current employer to change their job. They also required approval before traveling outside the country or undertaking their administrative tasks.

Implementing contractual relationships will enable raising the efficiency of human capital operating in the Saudi labor market, said Mercer’s CEO in Saudi Arabia Mahmoud Ghazi.

Ghazi noted that the move standardizes work mobility according to fresh procedures and conditions that stem out of competency, merit, and professionalism.

The change brought about by the LRI to labor mobility will produce a qualitative leap in improving both employer and employee rights, Ghazi told Asharq Al-Awsat, adding that this will reflect positively on attracting investors to Saudi Arabia.

Economic analyst Abdulrahman al-Jubeiri has reaffirmed that the initiative brings about a number of advantages to the Saudi labor market.

“Implementing the LRI entails a list of pros that include increasing the competitiveness of the Saudi worker, improving the local work environment, advancing Saudi Arabia’s ranking in the international competitiveness index, and reducing employment costs,” Jubeiri told Asharq Al-Awsat.

He added that the LRI also supports greater opportunities for localizing jobs, technology, and experience in the kingdom.



Saudi Arabia Prepares Investment Environment for Food Security with Private Sector Participation

A food store in Saudi Arabia (Asharq Al-Awsat)
A food store in Saudi Arabia (Asharq Al-Awsat)
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Saudi Arabia Prepares Investment Environment for Food Security with Private Sector Participation

A food store in Saudi Arabia (Asharq Al-Awsat)
A food store in Saudi Arabia (Asharq Al-Awsat)

The Saudi government has granted the General Authority for Food Security (GFSA) the authority to expand its revenue sources through investment initiatives and strategic partnerships with the private sector.

The new move is intended to enhance the Authority’s capacity to fulfill its mandate, align with national goals, and operate within regulatory frameworks, while also cultivating a competitive investment environment within the food security sector.

Recently, the Council of Ministers approved the formal organization of the GFSA, further reinforcing its role in safeguarding national interests and ensuring compliance with relevant regulations.

This development follows the Cabinet’s decision in January 2023 to rename the former Grain Silos and Flour Mills Organization as the General Authority for Food Security.

The change aims to unify the efforts of government bodies and the private sector, improve system efficiency, and raise overall performance.

The investment of the Authority’s funds will be jointly managed by the Minister of Environment, Water and Agriculture, who also chairs the GFSA, and the Minister of Finance.

The collaboration ensures the effective use of revenues in a way that supports long-term financial sustainability. Fees for services provided by the Authority will be set in coordination with the Ministry of Finance and the Center for Non-Oil Revenue Development until formal governance procedures are established.

Under the new regulatory structure, the GFSA is authorized to propose and amend laws, policies, and strategies related to food security. It can also recommend updates to the list of strategic commodities in coordination with other relevant bodies.

The Authority is tasked with developing and overseeing emergency response plans and strategic food storage policies. It will also supervise the storage of key food commodities by the private sector, monitor usage and rotation, and take necessary action based on its findings. In addition, it will assess food loss and waste throughout the supply chain and formulate strategies to minimize it, including recycling programs in partnership with other entities.

The GFSA is required to establish electronic links with public and private institutions to access necessary data, and it may enter into agreements related to food security both domestically and internationally. Its funding will come from government allocations, service fees, investment returns, and approved donations, with all revenue managed through accounts coordinated with the Ministry of Finance.