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Saudi Arabia's nationalisation programme 'to create one million jobs'

The kingdom is introducing the nationalisation plan to diversify its economy [Getty]

Date of publication: 28 November, 2016

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A plan to boost Saudi Arabia's industries aims to create one million jobs for its citizens and decrease the cost of goods as the kingdom reduces its dependence on imports.

A plan to boost Saudi Arabia's homegrown industries will cut back its reliance on imports and create one million jobs for citizens over the next 15 years, a member of the Shura Council has claimed.

The council, which makes recommendations to the government, is voting on the nationalisation programme this week.

"The plan aims to develop a Saudi workforce which is skilled and educated enough to power the wheels of production," member Abdulrahman al-Rashid told Saudi Gazette on Sunday.

"It envisages projects to cut down foreign imports and increase national output."

The plan includes the formation of a high commission to set out strategies for the country's economic development.

Across Saudi Arabia, employers and authorities are introducing a range of measures and changes in order to aid the country's squeezed finances in the wake of plummeting oil prices.

Deputy Crown Prince Mohammed bin Salman's "Saudi Vision 2030" is a broad policy agenda aimed at diversifying an economy that depends on oil for 70 percent of state revenues.

Earlier this month, the kingdom abandoned using the Islamic lunar calendar to schedule pay for government workers in a bid to save on costs.

The programme spells bad news for foreign contractors hoping to do business in the kingdom

In late September, cabinet ministers' salaries were cut and public sector bonuses were scrapped as part of the same cost-saving drive.

Rashid said: "By empowering and developing local industries by increasing productivity, unifying standards of measurement and regulating prices, the kingdom will be able to become a fierce competitor in the global market.

"National output utilises the full capacity of the nation and its resources. It mobilises local manpower and makes use of local raw materials. The system will also empower local investors."

He said national production will cut prices as indigenous products will be cheaper than imported goods.

"The budget for imports reached SR452,439 billion ($120,631 billion) in 2011. Billions of riyals are spent annually to meet the needs of government projects," said Rashid. 

"This money could be saved and spent more productively for the benefit of society if the manufacturing sector is nationalised and if there is no need to import goods and equipment from abroad."

However, the programme spells bad news for foreign contractors hoping to do business in the kingdom, with priority given to Saudi contractors and all foreign firms obliged to hand over a minimum of 30 percent in profits to their Saudi partners.

"Foreign contractors will be obliged to buy equipment from Saudi manufacturers or from Saudi representatives of international companies," Rashid added.

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