Tuesday,13 November, 2018
Current issue | Issue 1395, (24 - 30 May 2018)
Tuesday,13 November, 2018
Issue 1395, (24 - 30 May 2018)

Ahram Weekly

Expats’ woes in Saudi Arabia

Nesmahar Sayed looks at how measures to improve the representation of Saudi nationals in the Saudi economy are affecting Egyptian expatriates

 

 Expats’ woes in Saudi Arabia
Expats’ woes in Saudi Arabia

Khaled Mahmoud, a 41-year-old accountant working in Saudi Arabia, is travelling to Egypt with his family for the summer vacation. At the end of his stay, he will be returning alone to Saudi Arabia, leaving his family behind.

Mahmoud, who has been working in Saudi Arabia for nine years, took the decision after a new monthly levy on dependents was put in place for expatriate workers in July 2017. The levy has meant additional expenses and has bitten into his income.

In 2017, foreign nationals working in Saudi Arabia had to pay a monthly fee of 100 Saudi riyals for each dependent they sponsored. This increased to 200 riyals in July of the same year and will increase further to 300 riyals next year. By 2020, foreign nationals will have to pay a monthly fee of 400 riyals for each dependent they sponsor.

The decision, designed to encourage companies to employ more Saudi nationals, also involves levies on companies employing more foreign nationals than Saudis.

For Mahmoud, paying 200 riyals a month for his wife and each of his three children is something he cannot afford. The levy is paid in advance of issuing new exit/re-entry or residence permits. “In 2020 alone, the levy would cost me around 19,000 riyals,” Mahmoud said. 

This exceeds the amount he has paid for the whole of the last nine years. “I used to pay 100 riyals for each one of my dependents,” he said.

Moreover, the fact that companies must also pay to employ foreigners is pushing them either to “fire foreign employees or give them the option to pay the sum themselves if they want to keep their job,” Mahmoud told Al-Ahram Weekly. 

The levy was implemented to encourage companies to employ more Saudi nationals. According to Mahmoud, the decision is affecting all nationalities, and many people have been taking their families back to their home countries.

“We used to work abroad in search of a better standard of living, but the new levy will change all that,” Wael Mohamed, an Egyptian teacher living in Saudi Arabia, said. He has decided to keep his family with him for the next year, but will leave for good if nothing changes.

In April 2016, Saudi Arabia published its Vision 2030 strategy, outlining its long-term economic and social policies. These target balancing the budget, creating jobs, reducing subsidies, diversifying the economy and developing the private sector.

Amr Abdallah, the director of a private hospital, has been working for 14 years in Saudi Arabia. He believes the new levy, the implementation of a new value-added tax (VAT), and increases in the prices of food and fuel are imposing huge pressure on the cost of living in the country.

“I am affected but not as much as lower-income expats. I might return to Egypt in a year or two if my stay becomes not worthwhile,” he said. 

The Saudi authorities began applying the five per cent VAT earlier this year as a measure towards balancing the budget. Inflation leapt to three per cent year-on-year in the immediate aftermath.

Nahed Hassan, who worked in Saudi Arabia in the late 1980s, remembers that renewing her residency permit cost 50 riyals per year. “Working there is not beneficial any longer,” she said.

She worries about what will happen if Egyptian expats are forced to return home under these circumstances and whether they will be able to find jobs in Egypt, especially given the already high unemployment rates.

Egypt’s unemployment rate came in at 10.6 per cent in the first quarter of 2018. Although this is an improvement over the 12.5 per cent unemployment in 2016, it still remains high.

However, the government is not worried. Haitham Saadeddin, a spokesman for the Ministry of Manpower, told the Weekly that “expats [who were on leave from government jobs] will return to their jobs in Egypt, meaning there will be no problem finding jobs for them.”

“Although I have a job in Egypt if I return, I keep praying that the economic situation in Egypt will improve and incomes increase, so that when I come back I can afford the higher prices everyone is complaining about,” Mahmoud said.

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