Riad guide-Saudi Arabia accepted the challenge, the kingdom of its dependence on oil weaning. Ahmed Ameen's just trying to keep their mobile phone shop open.
Mr. Amin hired a foreign worker to the store in the capital of Saudi Arabia through four months, but the worker has left the kingdom after they learned that an essential part of the economic strategy of the government is to replace foreign workers Saudis.
"My shop is closed and every day to lose money," Ameen, who has a job and can not even work said.
The ambitious goal of the management that the Kingdom is a Vision Statement in April, and a more detailed plan provided that seems far from small business struggles to Mr. Amin be used in phases in the days. But they are part of the same challenge: to reduce the large petro state of the world.
King Salman bin Abdulaziz al Saud an octogenarian who was the last son of the founder of the modern kingdom, to rule the country, concentrated unprecedented power in his own son 30 years Prince Mohammed bin Salman. The representative of the Crown Prince, and secondarily to the throne, directs all economic and domestic policy, and the country's army. Prince Mohammed has in turn a historic effort launched the conservative change quickly combines aversion remake.
"The younger generation really does," said Jean François Seznac, a professor at Georgetown University who studies the economy in the Persian Gulf. "It is their representative."
The challenge is immense. Since oil was discovered in 1938, the kingdom of the economic structures par excellence of the oil age has become. The billion barrels of crude oil is pumped and around the world have the politics and economics sold in fact the essence of society in a way formed that could be very painful to cancel.
Saudi citizens enjoy very low fuel, water and electricity. The housing is subsidized. Your doctor will be paid by the government, such as education, including relays study abroad. You are not taxed. The companies were not dependent on cheap energy and easy access to cheap labor.
In return, the country's royal family has a docile population continues its leadership planned.
But the social pact is broken and the fall not only because of oil prices. Demographic petro killing. In 2030 the number of Saudis is more than 15 years probably to about six million, the increase and at least 4.5 million new skilled labor workers even more if women begin to work more, many, according to a study by the McKinsey Global institutions. The group of independent experts associated with the company McKinsey & Co., presented the consulting firm Management Saudi government cause economic contribution to help.
This is more than twice as large as the adult population, which simultaneously covers the cradle to the grave of the documents of the kingdom system and is the breaking point, while creating almost three times more jobs demand as the country generated during the height of the last oil boom between 2003 -2013, McKinsey said.
In response, the government plans a wide diversification of the economy on oil exports. the new leadership of Saudi Arabia plans to privatize chunks of numerous public companies, to start with a contribution of up to 5% of the Saudi Arabian Oil Co. colossal national oil company Aramco better known. Also on the table: the aggressive expansion in refined products with high added value, such as gasoline and petrochemicals, the development of the tourism industry and the construction of a production base.
Government officials declined interview requests.
Since the contours express complaints publicly, appear segments of Saudi society. clerical ultraconservative kingdom class, long by a river of oil money sated its privileged place in the Saudi society to finance Chafe about the government's efforts to increase the participation of women in the public workplace. "We are sad to see a co-worker in men," Abdullah al-Dawood, a conservative writer, said on Twitter in March.
Companies supported for decades by massive imports of cheap foreign workers billion and the government subsidizes, such as energy, the new requirements of the coil to replace workers with Saudis and expensive labor, provide a more competitive market inputs.
Also part of the actual network have grown by a growing family of about 5,000 princes decades uncomfortable with the priority of the plan in a competitive economy to create based on the market to provide the compounds to replace and nepotism were the pillars of petro state, experts say. Last fall two anonymous open letters attributed to a Saudi prince published dissatisfaction step down with the latest changes and ask the King to express.
"It's a new paradigm. We are breaking new ground," Hossein Shobokshi, a businessman and commentator based in Jeddah, at a meeting of the financial and business leaders at a recent conference of Euro Money encouraged.
A key challenge is not only to create jobs in the private sector, but also to convince young people to these jobs.
This is particularly important, but also particularly difficult in areas such as retail. Jobs in sales, repair and management of low level for a long time been occupied by foreign workers that are cheap and willing to work long hours. the Saudi government sends home workers, and to try to encourage Saudi citizens to take their place.
The Ministry of Labour and Social Development decided in March to all foreigners working in shops for the sale and service of mobile phones with the nationals of Saudi Arabia to replace the beginning of September. Government figures this new ban on foreign workers will create more than 20,000 jobs for the local population.
The government adamant reader problems commonly referred to as "Saudization" in the past, which are sold as they tried with the local population in the vegetable markets and jewelry stores to replace last foreign. Since the announcement of the decision, the Ministry launched a national media campaign. A bus will visit a mobile branch various parts of the country to promote the plan. The bus, with two large video screens running advertising instead of windows, made several stations near Mobile Stores in Riyadh in May. Inside agents have gone with laptops hundreds of names of Saudi jobseekers.
Technical and Professional Corp., one of the iron arms of the government to implement the program, training said in late May that 19,084 men and women have been trained and are ready to take jobs in sales, service customer and maintenance base of mobile phones.
Mr. Amin, the owner of the mobile phone shop, is skeptical that the government will be able to train enough people in time to make the plan set by the Ministry of the work within the deadline.
"It was a big mess. We should give at least two years to do it. The area of foreign controlled for many years," Amin said. He added that he would not consider opening another business in the country if the government implement this policy.
"I will put my business in Dubai or elsewhere," he said.
Young Saudis have developed a reputation of looking down on manual labor in recent years. But Abdulaziz al-Buti, 23, who recently entered the training program, as settings have changed the labor market has become more competitive and the expectations of government support fell.
"What is important is the acceptance of the work and not what society thinks," said al-Buti, who left his studies and worked as a supermarket cashier. He pointed out that like to experiment with electronics and appliances. "Success will come elasticity. If you like the work, then nothing can stop."
Another measure that have contemplated the authorities, most of the stores to force closed from 9 am instead of 23 pm or midnight. This proposal was found to polarization. Supporters say that younger Saudis would work more attractive, as it can complete their work in time to go home to spend time with their families. Most foreign workers in the retail sector are now single people, or if not married in the Kingdom to their families. They are not easy to change jobs in a position, either can be used as workers in Saudi Arabia, if a better offer comes.
Opponents argue that the limits of the operating hours are not practical in a country in which to close any already forced companies five times a day for prayer and where temperatures often hot blazing during the day. Most people prefer shopping and errands at night.
These critics say that if the government wants stores close at 21.00, should not be forced to close during the prayer. However, it would draw the ire of religious conservatives, who consider the forced break for prayers as part of the Islamic identity of the country.
Tourism is another area leaders are willing to develop under the new plan. But also, it is an industry that the government has fueled by oil revenues the government has struggled with the powerful construction industry common cause with deep religious conservatism of the company found.
The holy city of Mecca attracts millions of visitors every year during the Hajj pilgrimage. This is huge Saudi construction companies are controlled by families connected, powerful, which made a fortune new luxury hotels and shopping malls there to build.
Muslim holy cities remain inaccessible to non-Muslims, even though some religious scholars have argued recently that the prohibition should be limited to Mecca, not Medina, where the Prophet Mohammed is buried. The kingdom is not issued tourist visas, but the government says that it wants to begin soon.
Some drivers of tourism would welcome the country in a year round destination, attracting visitors from all over the capitalization of archaeological treasures and diving. But the clerical class has resulted in the country often destroy the ancient Islamic monuments and sites, its strict Wahhabi brand of Islam positions as distractions from God and his prophet.
Some residents of the ancient trading city Jeddah, a port on the Red Sea, are trying to change that. historic town was largely abandoned by the people of Saudi Arabia, which drew the more spacious suburbs oil money in the country in 1960 and 1970. A movement flowed the old city is by hand with a revamp variety of efforts of the government historic houses to be restored. The new projects of restoration and carpentry skills teach old ruined houses in a neighborhood to renovate, classified by UNESCO in 2014 a World Heritage Site.
"The current view is to mix the old and the new," said Ali native Khormi Jeddah working 42 years as a leader. "Tourism is dependent on this vision."
The biggest challenge for the redesign of the kingdom petro state but probably hopes to build a diversified production base. This is particularly difficult, tends in an economy where oil dollars flooding to increase the price of labor Arabia, also too expensive exports to compete in foreign markets.
The tightly controlled market for foreign workers Kingdom work was a way to avoid this problem. To the extent that Saudi Arabia exported around the world on oil in the petrochemical industry to create competitive companies, for example, has managed and aluminum production, which we provided in the spirit of the advantage of cheap energy.
These two business models, both heavily subsidized by the state, the "on the creation of wealth" were for operators, not the "creation of economic value," Iyad said the Zaharnah, director of the Center for Innovation in King Fahd University of Petroleum and Minerals. "Do not encourage innovation. We knew that to change it."
Now the center of the cutting edge of Saudi Arabia looks suddenly excited. Recently opened a business incubator, with an open design, where the business begins several students work side by side. Cabin walls are covered contractor to do with slogans in Silicon Valley and Chinese philosopher.
The center has forged relationships with multinational companies such as General Electric Co. and Sinopec China together in developing research and companies to work. He developed dozens of new patents and 90 new products, including a water purification process used in some areas of oil shale in the United States.
The government has recently made a victory, known as GE that it plans at least $ 1400000000, doubling the workforce in the kingdom to invest The conglomerate to 4,000 in 2020. to form a team with two partners, including Aramco, to build a production plant $ 400 million for the energy and maritime sectors.
Now the incubator of the University will develop case studies in Arabic and try the younger to use by some families of prominent merchants in the kingdom members.
"It's about the mentality," said Moussa Wail, director of the incubator, known as the Institute for Entrepreneurship.
Write to Bill Spindle in bill.spindle@wsj.com and Ahmed Al Omran to Ahmed.AlOmran@wsj.com
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