Saudi labour crisis

Published August 4, 2016

THE news coming out of Saudi Arabia of thousands of foreign workers — Pakistanis included — not having been paid for months and reportedly running low on food is reason for concern.

As reported, over 8,500 Pakistanis employed with two Saudi firms have not received their salaries for a number of months, and are also facing issues securing end-of-service benefits.

Perhaps the most distressing accounts are those that describe workers having to beg or scrounge for food in the kingdom.

These issues are linked to the current state of the Saudi economy, which has been battered by the plunge in oil prices.

The kingdom — the Arab world’s biggest economy — relies on oil for most of its state revenue; resultantly, when prices crashed from their high of over $100 a barrel in the past few years, the Saudi economy was shell-shocked.

The construction sector — which employs a large number of foreigners — was hit particularly hard, with several projects halted. And whenever economic pressure builds up, the first to face the axe will be foreign workers, especially in the Saudi and overall Gulf context.

Considering Saudi Arabia hosts over 1.5 million Pakistani expatriates, the crisis needs to be dealt with on short- and long-term bases by the Pakistani government.

In the short term, the workers must have access to food, water, decent accommodation and medical care, while the government should take up the issue of securing their outstanding dues with Riyadh.

As news reports point out, the state is already looking into these matters, as Pakistani missions in Saudi Arabia are in touch with the affected workers.

Moreover, the government should also arrange to bring back any workers who may not be able to afford airfare. But the bigger challenge is that of the long-term future of Pakistani workers in the kingdom.

The prognosis for the Saudi economy is mixed, with many experts predicting a rough ride ahead, especially if oil prices remain low. If more Pakistanis are laid off, does the government have a contingency plan in place?

For example, remittances from Saudi Arabia were around $6bn in FY16, as per State Bank figures.

Are we prepared to handle the fallout should these funds dry up significantly, and do we have the capacity to absorb Pakistani workers returning from Saudi Arabia and the Gulf should economic conditions deteriorate further?

These two key questions need to be looked into without delay by our economic planners.

Published in Dawn, August 4th, 2016

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