Tuesday, December 25, 2012

New expat fees - Where are we heading?

The protest by Saudi private businessmen against the new fees to be levied on companies employing more expats than Saudis, is growing each day.
The latest to oppose this fee hike is by transport companies who run thousands of trucks all over the kingdom (click here). As is common knowledge, almost the entire fleet of trucks running in the kingdom are driven by expatriate work force. Driving trucks is not an easy task. Not only does it involve a lot of skill and patience, but also plenty of  physical and mental fitness. These poor drivers ply their vehicles day in and day out and earn a pittance. Most of them get their annual vacation only once in 3 years, and that too only if their sponsor agrees. On the other extreme, like janitorial jobs, Saudis consider working as truck drivers below their 'dignity'. This is the core of the problem.
On the one hand, there aren't any Saudis ready to drive these trucks. And truck owners are not ready to pay for the new Iqama fees. Caught in between are these poor workmen who would soon be illegal aliens in this country if their Iqamas are not renewed. Which means they lose their jobs, but more seriously, there would be lesser and lesser trucks running in the kingdom, which is sure to push up prices and slow down development. The situation has become very serious for private businesses. The Government today announced that the minimum wage of Saudis in private sector would have to be SR 3000 per month. This rules comes into effect from 2nd February, 2013.
Consider the extent of effect this is going to have on labor-intensive sectors such as transport and sanitary services, where poor expatriates form almost 100% of the labor force earning anywhere from SR500 to SR800 per month. It is no wonder that the transporters have warned of a "full paralysis" (click here). This blog has been consistently raising this issue (see here). Before things become unmanageable, let us hope that there would be a moratorium on implementation of this rule, which is a very regressive step indeed.