Riyadh at a Glance
Working in Riyadh
The Saudi Economy
While working in Riyadh, you will be contributing to Saudi Arabia’s thriving economy, the largest in the Arab world. In 2012, the national gross domestic product grew by nearly 7%. So far, the political crises in Syria and Egypt have not affected the countries on the Arabian Peninsula yet. However, experts predict that Saudi exports may suffer and the 2013 GDP will increase “only” by up to 5%.
Obviously, the country’s prosperity is largely founded on oil. The Kingdom of Saudi Arabia is a leading member of the OPEC – no wonder, since it’s also the country with the largest oil reserves worldwide! The petrochemical industry accounts for 45% of the GDP, 80% of the state’s budgeted revenues, almost 90% of all exports, and 90% of the earnings from the export sector.
The oil industry in Saudi Arabia is strongly in the hands of the government. Saudi Aramco, a formerly US American petroleum company, was nationalized in the 1970s. Nowadays, it’s the biggest oil producer in the world.
In stark contrast to big business, the local Saudi economy is often dominated by small and mid-sized enterprises, frequently run by family members. Such family-owned SMEs working in Riyadh and other major cities are mostly active in trade. Since the desert nation has only a tiny agricultural sector and little industry other than petroleum, it needs to import lots of food, textiles, vehicles, and machinery. Thus, commerce and marketing seem a logical choice.
Employment in the Capital
Working in Riyadh is in some ways an anomaly since the urban economy is not dominated by the oil industry. As the city is the capital and hence the seat of numerous government institutions, the public sector is the biggest employer. Most employees working in Riyadh’s ministries and other government offices are Saudis. So, where does that leave the many foreign residents working in Riyadh?
Lots of migrants from African, South Asian and Southeast Asian countries toil in (potentially exhausting, dangerous, and underpaid) construction jobs. Those that fare somewhat better are employed in Riyadh’s service sector, e.g. in the hospitality industry or as taxi drivers.
Well-qualified expats are often found working in Riyadh’s diplomatic missions. The Diplomatic Quarter, or “DQ”, is home to plenty of foreign embassies and cultural institutions. Then, there are the expat assignees of multi-national companies based in the Saudi capital. Big finance, high-end hotel chains, and defense contractors all have international staff working in Riyadh.
Future Growth Sectors
The Saudi government recognizes the importance of diversifying the economy. In the long run, they must end their exclusive dependence on the petrochemical sector, or the national economy will collapse once the oil reserves are exhausted. The plan to support other industries is also a chance for foreign companies, investors from abroad, or expatriates interested working in Riyadh.
Diversification will (or already does) open up opportunities in various fields: information and communication technology; natural gas production, to find an alternative to oil; power generation and renewable energies, to satiate the growing population’s demand for electricity; transportation, to transform a sprawling cityscape made for cars and to improve the nationwide transport infrastructure; recycling, waste water treatment, and desalination; medical equipment and healthcare in general, to maintain the hard-won quality of life.
Trends on the Labor Market
The country will need an even larger, more industrious labor force to realize plans for economic diversification, from specialized university graduates to menial workers. Ironically, Saudi Arabia has a high unemployment rate. Officially, 12% of the (male) population doesn’t have a job. Among younger men, the figure may even be as high as 25% or 30%.
To increase the number of Saudi nationals working in Riyadh’s private sector and in all sorts of jobs, the government has repeatedly tried to push a “Saudisation” quota. The latest resolution was passed in 2011 and had to be implemented in 2013. It means that companies with more than 10 employees are classified according to four different categories (red, yellow, green, and premium), depending on the percentage of Saudi nationals among their staff. The poorer the company’s compliance with the quota, the more difficult it will be for their HR department to hire new foreigners, to renew work permits, etc. How this will affect expats working in Riyadh remains to be seen.
Again, it is rather ironic that Saudi Arabia does have a national “reserve army” of potential employees that it doesn’t really use: young Saudi women. Many of them have a good tertiary education. The state-of-the-art campus of Riyadh’s Princess Noura bint Abdul Rahman University is an excellent example.
However, few women are working outside the home. Apart from several prominent Saudi businesswomen, who seem to be the proverbial exception to the rule, most are employed in education and healthcare. These two fields offer job opportunities for expat women who consider working in Riyadh for a while. Although more and more Saudis complete their medical training at home, a large percentage of the staff working in Riyadh’s clinics and health centers is still foreign-born. Female doctors and nurses are sought after for women’s and children’s hospitals.