How Saudi Arabian reforms have made lives of Pakistani expats living in the kingdom much worse

How Saudi Arabian reforms have made lives of Pakistani expats living in the kingdom much worse
In April 2018, when I went to Saudi Arabia, I noticed a significant change. Where previously in many international hotel chains, expat workers used to man the front desks, now Saudi men greeted me at the reception. And while it was unheard of before, Saudi women (in their traditional “niqab”) could be now seen working as cashiers in grocery stores and supermarkets as well.

The Saudization

In 2016, in the face of low oil prices and rapidly declining foreign reserves in an unsustainable, oil dependent rentier state, the Kingdom of Saudi Arabia (KSA) was faced with two scenarios: either to engage in social and economic reforms and push the country towards modernization or face the possibility of plunging into deep recession amid rising internal conflict, with a monarchy essentially in peril. The Saudi nationalization policy is aimed at boosting private sector jobs in order to reduce the dependence of its citizens on government dole-outs and pare down the public-sector wage bill, which accounts for around half of all government expenditure. Officially known as “Saudization,” or “nitaqat” in Arabic, the nationalization policy is expected to reduce the expatriate (i.e. foreign) workforce, in the private sector to just 20 percent of Saudi Arabia’s population over the next few years.

This Saudization scheme, however, is not new. It actually began in 2011 as part of a government initiative to encourage the employment of Saudi nationals in the private sector. Arab Uprisings Protests voiced in the Kingdom during the 2011 “Arab Uprising” indeed focused on lagging income, alongside corruption, and unequal access to oil revenues. In view of the deterioration of the social contract in the country, the risk of unrest among the roughly 20 million Saudis, of who a quarter were in the age group of 15-29 years, was taken very seriously. But this nationalization policy gained more traction after the kingdom’s oil economy started to shrink when crude prices began plummeting in 2014. Since the onset of the Arab uprisings, however, unemployment among Saudis, and especially women, has become a burning political issue. Governmental actors had no choice but to attempt to regain control over the economy and the management of the labor market.

Job creation and business in the Kingdom

In order to address the very pressing need of massive job creation in the private sector for Saudi youths, the government had to regain the upper hand on economic decision-making, hence the implementation of Nitaqat. Indeed, the program has tremendously limited the power of business classes over workforce recruitment. Not only do business owners have to recruit through replacing the foreign workforce with a national one, they also have to create new opportunities for locals and upgrade the work conditions in the private sector to entice Saudi workers to join it. By so doing, the regime regains the upper hand on the management of the labor market from the private sector. Additionally, it beefs up its wavering base of popular support, as labor is part of the process of redistribution of resources to citizens. In any case, if Nitaqat were to fail, businesspeople would bear the political costs of this failure.

The region’s dependence on foreign workers dates from the first oil-induced economic boom which followed the initial discovery of oil on the Arabian shore of the Gulf in the 1930s. The dependence on foreign labor grew tremendously after the October 1973 war, which triggered a four-fold increase in oil prices. The phenomenal increase in the Gulf States’ incomes spurred large-scale construction, industrial, and infrastructural projects. The demand for migrant labor rose, and they performed an increasing part of the productive work over the years. The benefits of these productive activities as well as the oil rent itself were transformed into material wealth and welfare packages for nationals – which led to the emergence of a class of “white collar, ”well-paid but unproductive state employees – in return for citizens’ political allegiance. The second period of the “oil boom” achieved the formation of “dual labor markets.”  The supremacy of nationals over non-nationals in the economy was viewed by Gulf citizens as essential for the reproduction of the fragile rentier social contracts binding them to their rulers, but this also led to the formation of “dual societies.”

Saudi and Gulf countries' poor track record on labor rights

A couple of months ago I visited Sasha International in G-7 Markaz Islamabad – a congested market famous for selling automobile parts. I navigated around car parts, by-passed snake like queues and a perilous staircase later reached a floor where there were two sets of barred doors. These doors were akin to images of starved prisoners below deck, all on top of each other, struggling to get the last bit of food (in this case the token that would get them through door number 1 and hence the waiting area). Migrants seeking jobs in Gulf countries are required to work through a registered recruitment agency – Sasha International and Gerry’s are the two offices officiated in Pakistan for this purpose. However, some dodge this pathway altogether and use background channels instead.

Manpower export to the Middle East from Pakistan began on a large scale in 1975. More than 95% of Pakistani migrant workers are working in just two countries: Saudi Arabia and United Arab Emirates. According to a 2016 International Labour Organization (ILO) survey, Pakistani migrants pay some of the loftiest recruitment fees in the world for the chance to work abroad, primarily because most Pakistani migrants process their applications outside of the government’s official channels – raising the cost greatly. The quest for financial betterment has propelled many young migrants across borders, and few reveal the dark days they have had. A majority of Pakistanis are hoaxed by agents and employers into getting the so-called independent visa and their troubles start from the moment they land at the airport.

“As soon as I arrived, my passport was taken away and I was shown a room where I had to wait in a small room with twenty or so men. After two hours we were asked to sit in a van which took us to what was my home for the next thirty years. One day my kafeel asked me for an amount of money which I could not produce. He let my iqama expire, refused to return my passport and filed a case against me in the police station” recalls Ali Ahmed, 67 years of age. He now earns a living by showing people around Lahore Fort.

Kafala system, the Middle Eastern scourge for migrants

All Gulf countries, including Qatar and Saudi Arabia, maintain a form of the kafala system of sponsorship-based employment that, at its worst, abets regular abuse of workers and international labor standards. Under the system, a migrant’s work and residency permits are anchored to their employer who keeps their passports, resulting in a worker being entirely contingent on the sponsor throughout employment. A sponsor's permission is required to leave the country and even to switch to better earning jobs. Ironically, it is the kafala system itself that makes Gulf citizens indulge ultra-high levels of immigration because it grants migrants so few rights. Hence, Gulf nationals do not feel threatened.

It is undeniable that many foreigners employed in the kingdom, in jobs from the most menial to the highest skilled, have returned home with no complaints. In fact doctors, engineers and businessmen are actually thriving. There are countless Pakistani restaurants, barber shops and store owners in the Gulf countries who are living a far better living lifestyle than one they would have back at home. Not to mention the many multinationals that actually prefer hiring migrants in Director level positions opposed to employing locals. However, lowest of the low class, which is monumental in number, is where the problem starts. For the women and men who were subjected to abysmal and exploitative working conditions, sexual violence, and human rights abuses in the justice system, the Gulf countries represent a nightmare.

Plight of the lowest of the low

Abuses against migrant workers in Gulf countries take various forms ranging from unbridled working hours, unpaid salaries to physical and sexual abuse. Many workers are even owed months of back pay. Then there are the deplorable living conditions of the migrants. There have been credible reports that as many as 20 people have been forced to share on small room with no sanitation facilities provided. Since many migrants do not have official papers to show they cannot avail the health facilities and many succumb to infections due to the unsanitary environment. The threat of deportation dissuades noncitizens from voicing work-related grievances. In June 2017, the Saudi defense minister tweeted citing Pakistanis as slaves. In actuality they are treated worse than that.

The Ministry of Human Resources and Emiratisation (MOHRE) frequently conducts health and safety site visits. According to one of its reports, in April 2018, 42 foreign nationals required assistance from their consulate after a labor agency withheld over two months of back pay. The workers had been suspended from their jobs because of a dispute over an injured worker’s medical treatment. In some cases, observers linked suicides to poor working and living conditions, low wages, and/or financial strain caused by heavy debts owed to originating-country labor recruitment agencies.

How Saudis failed to replace the migrant workforce

Saudi Arabia’s campaign of ‘Saudization’ to partly replace the migrant workforce with citizens has had a perverse impact on migrant life. After the dependents fee was imposed, household heads have come to the conclusion that it is not economical to keep their families with them as annually the fees per individual are only going to increase.

A few months ago, on a drive from Makkah to Madinah the taxi driver related as much and told us how he had to send all five kids and his wife back to Pakistan because it was not possible to pay the fees any more. Mr Hafiz has been working in Jeddah for nearly 15 years. He would now sell off his apartment and share a room with three other taxi-drivers.

Then there are the working expats fees - supposed to be paid by the employers. If the company employs expats less or equal to the number of locals, they have to pay SR 300 per month for each expat employee. If the number of expats the company employed exceeds the number of locals, they have to pay SR400 for each expat. Therefore, many companies prefer if their expats quit their jobs altogether. This can also be seen in the falling remittance figures ala the State Bank of Pakistan.

And what becomes of the Pakistani migrants who return home?

Suffice it is to say they are not accommodated by the government.

In a conversation with a government employee who deals with overseas immigrant facilitation, I was vaguely told that since 2016 only 500 (registered) migrants had so far returned. On inquiring about how the unregistered expat returnees would be accommodated, I got no answer. This just goes to show there is no proper check system in place as yet. Records have not been maintained. And where there are records, instead of being digitized, the archaic ‘register pen’ system is being used. God forbid a flood ever occurs in these offices.

In many cases these returning expats are not even assisted by their own families. If anything, they are left in isolation. Of the interviews I conducted, I was told that while some become drug addicts, others commit suicide. If they are too old, their children even deposit them in old homes.

Mr Zafar (75 years of age) is one example. After fighting and failing legally to get the money his kafeel owed him, Zafar returned home. His family ridiculed and shamed him and his sons told him they could not take care of him. With now a permanent back problem from working endless hours in construction Mr Zafar finally found respite in Najjat Trust welfare home in Rawalpindi.

Forced evictions and the Pakistan government

Cases of forced evictions are not exceptional. Employers refuse to pay money and migrants are asked to leave the country. When these people return to Pakistan they are faced with unemployment and much worse conditions not to mention the added ignominy of coming back home with nothing to show.

In May 2018, Mir Hanif had just landed in Islamabad after being evicted from KSA where he had worked for nearly forty years. He was the only bread earner of the family. His son in laws refused to work hence he had been supporting them as well. How would he run the household(s) now? His grandchildren were starting school as well. These thoughts consumed him to such an extent that he suffered a fatal heart attack while the plane was still on the runway.

Why Saudization policy is bound to fail

In all likelihood the current Saudization policy is bound to fail. The government’s own data indicates that Saudi Arabia is experiencing the biggest ever outflow of foreign workers in its history and at the same time failing to fill jobs vacated by expats despite unemployment being the highest on record; 12.9 percent. Another reason for the preempted failure is that the Saudi youth have (generationally) grown up thinking they are royalty. Doing menial tasks is beneath them, hence they refuse. Added to this are the ever rising living costs as a result of the reforms which have made life harder for the middle class laborer.

Pakistan government needs to start feeling its responsibility towards its citizens working abroad

Keeping in mind that immigrant networks can help to promote trade between their countries of origin and destination by reducing transaction costs of trade and are a source of market information for exporters in both the receiving and sending countries, the Pakistani government should adopt a more hands-on approach to diaspora affairs. With the help of Gulf states, the Pakistani government should set up emergency funds that redress Pakistani workers in the event that companies choose to break their contracts. Islamabad should also identify Gulf-based companies that have a history of violating workers’ rights so that laborers are protected from the debt traps of recruitment firms.

Sideways, all stakeholders should invest in the awareness and training of workers. While the former would make workers less likely to fall prey to adverse situations, the latter would strengthen their competitiveness in the global labor market and make them eligible for jobs with better conditions and benefits. The training of workers should take place both in Pakistan and the Gulf. Moreover, the returning expat workers need to be accommodated. They should be provided monetary compensation till they find a job. They should also be engaged in awareness workshops so they understand their future options.

The author is a LUMS and University of Warwick alumnus, and regularly contributes to various local and foreign publications.