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Saudi Labor Market Makes Improvements to Support Establishments, Employment

The Employment Support Program is part of government support initiatives to empower establishments and ensure their stability and business development, Asharq Al-Awsat
The Employment Support Program is part of government support initiatives to empower establishments and ensure their stability and business development, Asharq Al-Awsat
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Saudi Labor Market Makes Improvements to Support Establishments, Employment

The Employment Support Program is part of government support initiatives to empower establishments and ensure their stability and business development, Asharq Al-Awsat
The Employment Support Program is part of government support initiatives to empower establishments and ensure their stability and business development, Asharq Al-Awsat

In a move set to boost employment in Saudi Arabia, the Kingdom has implemented a host of new improvements to its labor market. The enhancements aim to enable and develop private sector institutions through supporting employment.

The new procedures aim to empower establishments and their continuity in the Saudi labor market, specialists told Asharq Al-Awsat. Moreover, they seek to raise employment rates by instating new controls.

On Thursday, the Human Resources Development Fund (HADAF) announced positive amendments to the controls of its Employment Support Program, allowing the largest number of private sector institutions to benefit from the plan.

The development and improvement of the controls of the Employment Support Program come as a continuation of HADAF’s goal to empower private sector enterprises and support the wages of Saudis working there, said HADAF Director-General Turki Al-Jawini.

Al-Jawini urged all enterprises to benefit from the Program through the National Labor Gateway (TAQAT).

For his part, Mansour Al-Shathri, head of the Human Resources and Labor Market Committee at the Chamber of Commerce and Industry in Riyadh, told Asharq Al-Awsat that the new improvements contribute to reducing unemployment rates and enable enterprises to continue in the labor market.

The Employment Support Program is part of government support initiatives to empower establishments and ensure their stability and business development, considering the current exceptional economic situations and the impacts of the novel Coronavirus (COVID-19).

The Program also supports the wages of Saudis who were employed in various private sector establishments starting from 30% to 50% of the employees’ monthly wages for two years, provided that the employees’ wages range between SR 4000 and 15,000.

Establishments get 10% additional support when employing women, persons with disabilities, employing in non-major cities, and in small and medium enterprises for each of the categories mentioned, provided that the maximum support does not exceed 50% of the employee’s monthly wage, or SR 3000, whichever less.

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Expert: Türkiye Anti-inflation Steps Don’t Go Far Enough

People shop at a bazaar in Istanbul. Reuters
People shop at a bazaar in Istanbul. Reuters
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Expert: Türkiye Anti-inflation Steps Don’t Go Far Enough

People shop at a bazaar in Istanbul. Reuters
People shop at a bazaar in Istanbul. Reuters

Although Turkish inflation slowed in September, it is still raging out of control with the government avoiding difficult decisions that could help tackle it, experts told AFP.

Türkiye has experienced spiraling inflation the past two years, peaking at an annual rate of 85.5 percent in October 2022 and 75.45 percent in May.

The government claims it slowed to 49.4 percent in September.

But the figures are disputed by the ENAG group of independent economists who estimate that year-on-year inflation stood at 88.6 percent in September.

Finance Minister Mehmet Simsek has said Ankara was hoping to bring inflation down to 17.6 percent by the end of 2025 and to “single digits” by 2026.

And President Recep Tayyip Erdogan recently hailed Türkiye’s success in “starting the process of permanent disinflation.”

“The hard times are behind us,” he said.

But economists interviewed by AFP said the surge in consumer prices in Türkiye had become “chronic” and is being exacerbated by some government policies.

“The current drop is simply due to a base effect. The price rises over the course of a month is still high, at 2.97 percent across Türkiye and 3.9 percent in Istanbul.

“You can’t call this a success story,” said Mehmet Sisman, economics professor at Istanbul’s Marmara University.

Spurning conventional economic practice of raising interest rates to curb inflation, Erdogan has long defended a policy of lowering rates. That has sent the lira sliding, further fueling inflation.

But after his reelection in May 2023, he gave Türkiye’s Central Bank free rein to raise its main interest rate from 8.5 to 50 percent between June 2023 and March 2024.

The central bank’s rate remained unchanged in September for the sixth consecutive month.

“The fight against inflation revolves around the priorities of the financial sector. As a result, it is done indirectly and generates uncertainty,” explained Erinc Yeldan, economics professor at Kadir Has University in Istanbul.

But raising interest rates alone is not enough to steady inflation without addressing massive budget deficits, according to Yakup Kucukkale, an economics professor at Karadeniz Technical University.

He pointed to Türkiye’s record budget deficit of 129.6 billion lira (3.45 billion euros).

“Simsek says this is due to expenditure linked to the reconstruction in regions hit by the February 2023 earthquake,” he said of the disaster that killed more than 53,000 people.

“But the real black hole is due to the costly public-private partnership contracts,” he said, referring to infrastructure contracts which critics say are often awarded to firms close to Erdogan’s government.

Such contracts cover construction and management of everything from motorways and bridges to hospitals and airports, and are often accompanied by generous guarantees such as state compensation in the event they are underused.

“We should question these contracts, which are a burden on the budget because this compensation is indexed to the dollar or the euro,” said Kucukkale.

Anti-inflation measures also tend to impact low-income households at a time when the minimum wage hasn’t been raised since January, he said.

“But these people already have little purchasing power. To lower demand, such measures must target higher-income groups, but there is hardly anything affecting them,” he said.