Saudization and Sound Economic Reforms: Are the Two Compatible?   [open pdf - 184KB]

Saudi Arabia and the other Gulf Cooperation Council (GCC) countries face a challenging set of problems that must be addressed to maintain political and military stability in the region. The first problem involves attaining and maintaining economic growth rates that are at least sufficient to keep pace with the rise in population. Job creation is then the second major problem facing the kingdom. Finally, the third challenge relates to maintaining the pace of economic reforms. If carried out successfully, the economic reforms, by creating a more competitive economy with increased investment opportunities, should expand the job creating capacity of the economy. This is critical, given the current inability of public expenditures to perform this task. The country's three main challenges--restoring rates of growth above that of the population, expanding job creation, and implementing a comprehensive reform package--appear to be relatively compatible with one another. Good progress in the reform area should assure higher rates of economic growth and through that more jobs. But will they be jobs for Saudis? The government is not confident this will be the case as it simultaneously broadens and expands its Saudization program. As implemented in Saudi Arabia, Saudization is a development strategy that seeks to replace foreign workers with Saudis. The purpose of this article is to examine Saudization--what are its main components and how will it be implemented? More importantly, is Saudization compatible with the country's general approach to economic reform?

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Naval Postgraduate School, Center for Contemporary Conflict: http://www.ccc.nps.navy.mil
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Strategic Insights (February 2004), v.3 no.2
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