(MENAFN - Arab News) The Saudi government spent an average of SR3.6 million for each Saudi citizen employed in the private sector over the past 10 years, a recent study revealed.
The finding is based on the simple math that the government granted SR1.512 trillion, in loans and direct financial assistance to the private sector, which succeeded in employing only 418,100 more Saudis in the period between 2000 and 2011.
The huge funding included SR552 billion in loans given through government agencies for general investment, agricultural development and industrial development. Another SR960 billion worth of loans was allocated to real estate development and the credit and savings bank, besides governmental subsidies, according to a study conducted by Al-Eqtisadiah business daily.
The number of jobs in the government sector is estimated at 2.5 million, and in the private sector at 1.5 million. While the number of registered unemployed Saudis is projected to be more than 1 million. On the other hand, the number of Saudi youths looking for jobs over the next two decades is expected to reach 8 million.
According to the study, a major factor that incapacitated the economy to generate a sufficient number of jobs is the over-dependence on imported labor. Other factors include the private sector's failure to stay in tune with the rapidly increasing number of qualified Saudi youths, job saturation in the government sector, and the lower salaries offered by the private sector.
The private sector alone has the potential to absorb the rising number of Saudi youths flooding into the job market, as the government sector will not be able to accommodate more than a million workers in the coming years, according to economists. The situation signifies the need to fortify and support the private sector, in order for it to be able to generate sufficient job opportunities.
Apart from the SR1.5 trillion that was granted for specialized governmental credit agencies, SR1.6 trillion was disbursed to subsidize fuel and energy, and SR32.8 billion was allocated in direct grants. This brings the total amount the government spent to boost the private sector, to a whooping SR3.4 trillion, over the past 10 years, the study said.
The 10 areas that received the most government support, according to the Central Statistics Department, are the construction sector, which employs 112,700 Saudis, the financial services sector, which employs 74,000 Saudis, real estate business, with 137,000 Saudis, hotels and restaurants with 23,600 Saudis, the downstream industries with134, 000 Saudis in its workforce, the retail and wholesale business with 293,800 employed Saudis, the transport, warehousing, and telecommunications sectors with 195,000, the mining industry with 88,600, and the electricity, petroleum and water sectors with 57,700 Saudis. The agriculture, fishing and forestry sectors which received SR94 billion in support, employed 160,000 Saudis, while the number of its national employees 10 years ago stood at a larger figure of 189,000.
The study also found that the 860,000 Saudis employed during the period before 2000 were hired in the following sectors: 39,100 in the construction sector, 28,500 in the financial services sector, 55,000 in the real estate business, 10,300 in the hotels and restaurants sector, 63,500 in downstream industries, 189,800 in retail and wholesale sectors, 150,600 in the transport, storage and communication sectors, 78,500 in the mining and electricity sectors, 54,100 in the gas and water sectors, and finally 189,000 Saudis were employed in the agriculture, fishing and forestry sectors.
These figures show, that during the past decade only 418,000 more Saudis were employed, whilst the total government spending was estimated at SR1.5 trillion, bringing the total Saudi workforce to 1.2 million, thus accounting for its 48.6 percent growth in 10 years.
According to a study conducted by the Ministry of Labor, the average salary of Saudis in the private sector stood at SR 3, 476 in 2010. The agriculture sector offered the lowest average salary of SR 2,423, while the mining, petroleum and gas sectors provided the highest average salary calculated at SR 8,493. In other figures, the finance and insurance sectors offered an average salary of SR 7,264, whereas the real estate sector offered SR3,536, according to the ministry's study.
It is also worth noting that there is a significant gap between the average salary of men and women. While men are paid an average salary of SR3,406 in downstream industries, women received only SR1,707. Similarly, men's average salary in the finance and real estate sectors was at SR7,359, while female employees received a lower average of SR6,100 per month.