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Saturday , December 7 2019

Saudi Labor Minister, you are killing development with expat levy

HIS Excellency Minister of Labor and Social Development of the Kingdom of Saudi Arabia Dr Ali Nasser Al-Ghafis, when I address you through these lines, I am doing so based on my conviction not just as a Kuwaiti citizen, but also a Gulf Cooperation Council (GCC) national. This concurs with what King Salman bin Abdulaziz said last year, “Blessed is he who points out my shortcomings,” and the same was affirmed by Crown Prince Mohammad bin Salman.

Therefore, we wish that your recent decision does not reach the kingdom’s leadership. At the same time, we point out your shortcomings while hoping you will withdraw a decision which will hit the kingdom’s development hard.

Although this recent decision is aimed at localizing businesses and employment in the kingdom, it seems it was taken and endorsed hastily without proper deliberation; thereby, unnerving employers in the entire kingdom.

The Kingdom of Saudi Arabia is the eldest brother in the Gulf region. All events and measures taken there directly affect the Gulf economy because the kingdom is the engine of the GCC.

The measures that you took, especially the ‘expat levy’, will have major negative impact not only on the kingdom’s economy, but the entire Gulf region as well because it will shrink the economy and hinder financial flow locally and regionally.

This surprising decision will prompt Saudi’s employers to let go of their participation in the development movement and thwart their ambitions, especially the new ones.

His Excellency the minister, every Gulf national, not only the Saudi citizens, are supporting your move to localize the commercial employment sector and to limit to the lowest possible level its benefits for Saudis in a bid to reduce the size of remittances from the profits of these businesses which are managed and operated by non-Saudis.

However, instead of taking gradual steps to achieve objectives, this step intensified the suffering of Saudis.

If the non-Saudi who has been working for several decades in this or that field has the ability to pay levies which were introduced suddenly, the citizen who wants to take up the place of this non-Saudi will not be able to pay levies for operating presumptive labor force in the future.

Perhaps, you have read the letters which employers addressed to the kingdom’s chamber of commerce concerning their overwhelming dismay over the levy that exceeds their businesses’ profits.

Consequently, your decision hinders the reform measures ordered by King Salman bin Abdulaziz about gathering data on payments to private sector suppliers and contractors and proposing appropriate solutions to expedite settlement of outstanding dues.

This is because whatever they will receive from delayed dues, they have to pay what is known as ‘expat levy’ and they will be unable to compensate for whatever they incurred due to delayed payment. They will be unable to continue the projects they are currently implementing.

The fact that the lawful and unlawful are clear means it is lawful to encourage Saudis to work in all types of jobs by providing facilities for them and removing obstacles in their way.

This is required in order not to deprive them the process of working in the service of their country. Majority of those people are at the initial stage of the road, so being asked to pay such ridiculous amounts will prompt them to leave the labor market.

This is a situation where Saudis are obliged to pay very high fees immediately while their transactions will be suspended if the payment is delayed. This is happening at a time citizens are not prepared to work in all jobs, because there are some jobs are not socially acceptable yet.

These jobs need time to train people and be acceptable in the society when it will be possible to impose fees on citizens. You are practically preventing them from entering the labor market, while discouraging non-Saudis from working there. This is tantamount to failure to localize the workforce, but I believe it is not your objective.

In this regard, it is important to look at the experiences of other countries. For instance, citizens in Switzerland work in the production of watches and chocolates, as well as banks and in administration. However, they give way to other nationalities in other professions and jobs subjected to the State tax system. Imposing tax and fees in this country is done in such a way that every citizen pays without stress.

Your Excellency the minister, these procedures are ‘killing’ development and you are the Minister of Social Development whose action should match the State’s strategic vision. Thus, gradual implementation of fees is the ideal solution just like other countries which rely on the tax system.

Countries under that category do not stipulate taxes and fees immediately, because according to an Arabian adage, “You want the grapes not to kill the janitor.” In this case, the Saudi economy is involved and there is no doubt that the Gulf economy is also at stake.

It is beneficial to consider the results of the fight against corruption that the Saudi leadership started a few months ago. It led to the arrest of businessmen involved in corruption but it did not close down their companies nor suspend their business activities. It did not prevent the completion of their transactions. The issue ended with reconciliation which recovered $100 billion.

The step had no negative impact on the markets because the decision was taken after a comprehensive study and it was managed wisely, contrary to the expat levy which provoked the ire of Saudi businessmen.

Anyone who loves Saudi Arabia wishes that jobs there are taken by Saudi citizens. They wish the economy of Saudi Arabia continues to develop because of the fact that a cooperative nation will never be humiliated. For this wish to come true, we hope that the decision will be cancelled so Your Excellency does not say later, “I should not have taken a decision which turned into an economic crisis in Saudi Arabia and other Gulf countries.”

Your Excellency the minister, I beg your pardon as I dealt with this topic plainly, but I was prompted by my belief that our Gulf is one body. I am also prompted by my belief in Prophet Muhammad (PBUH) who said, “Believers are like a coherent construction.” We need to work according to what Prophet Muhammad (PBUH) stated, “Believers are like one body in terms of sympathy and showing mercy to each other. If one organ suffers, the other organs respond by having fever and staying up all night.”

I said this because I think the decision portends a fever which will obligate all of us to stay up several nights trying to eliminate the fever from the body of the Gulf in general, and the Saudi body in particular.

We refer our opinion to the father who loves his country and his people and gives us the opportunity to point out shortcomings. We are sure he will look into what we said.

Lastly, Your Excellency the minister, a real friend tells you the truth, not the one who always agrees with you.

By Ahmed Al-Jarallah – Editor-in-Chief, the Arab Times

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