Saudi Arabia will not create a new vibrant economy

Young Saudis on the spot as prince plans to expand private sector - FT.com

​Saudis don't work.

​More.

"For decades, young Saudis have grown accustomed to walking into easy public sector jobs, cushioned by decent salaries and benefits paid for by the kingdom’s petrodollars.

It is a phenomenon that has bred a reluctance to take on private sector work, which entails longer hours and fewer perks. The result is that expatriates — who account for a third of Saudi Arabia’s 30m population — fill about 85 per cent of private sector jobs."

Saudi's don't want to work, don't know how to work, and simply won't work. What they want are sinecures, high pay, low effort, great perks, you know, exactly like no real job anywhere. The Saudis have the biggest bluest blue model of any nation. They seem to have seen a video of a Silicone Valley tech shop with its bounce house, axe throwing, and romper rooms, and thought that was the "work" part, not realizing the people there still had to produce new innovative things to justify their 6 figure salaries. 

"But Mohammed bin Salman, the ambitious deputy crown prince, wants that to change. If he succeeds, millions of Saudis face a rude wake-up as the young prince attempts to implement a bold transformation plan that envisages shrinking the civil service and having half of all Saudis seeking work in the private sector by 2020.

While analysts agree that radical reform is needed to modernize the sclerotic, oil-dependent economy, the risk is it that forging ahead with social change could spark popular resentment."

You mean like in the movie Trading Places? Naw, they will love working long hours, low pay, under the thumb of demanding bean counters, and bosses. They do not understand what is coming, neither the workers, nor the House of Saud. This will become the most Postal event ever. Let that sink in.

I for one doubt the resentment will last that long, I think they should be able to wash that out of Saudis within 2 to 3 generations, tops! But that won't help much if you need to have an economy within a fortnight, as the House of Saud needs. And just because Saudis are passive-aggressive in all else, does not mean they will be passive-aggressive with the phase-in of myriad new uncomfortable social changes! Right.

"A central tenet of Prince Mohammed’s “National Transformation Plan,” which was unveiled last month, is to reduce unemployment from 11.7 per cent down to 9 per cent by 2020 and 7 per cent over the following decade. Estimates of youth unemployment run as high as 30 per cent."

This sounds like the Obama "Speedy Gonzales" plan for reducing unemployment. It made for a pretty anemic recovery, I am not sure Saudi can handle a slow, but steady as she goes 2 decades of waiting on this new economy. 

"To tackle the issues, the NTP has the ambitious target of creating 450,000 private sector jobs by 2020 through the expansion of non-oil sectors, such as mining and tourism. But at the same time it plans to decrease the civil service by 20 per cent, as part of its aim of reducing the dominant role of the state.

Stefan Herthog, an associate professor at the London School of Economics, said that implies an “unprecedented reduction of government employment” at a time when the private sector job market is struggling in the wake of the slump in oil prices."

Tourism?! For what sand dune surfing? I suspect the Herthog (killer name if he could only swap the "e" for a "u") is on to something. Cutting the public sector jobs will be easy. Getting the remaining public sector workers to do more work, well, much less likely. And the entire private sector thing, I don't see it. Sand surfing? What?

And I honestly cannot imagine the problems of hiring young Saudis to run hotels, clean rooms, do laundry, provide services to the infidels with money. Yeah, not seeing that. 

You might go to Scotland and pay to watch men in skirts throw telephone poles around, but why would anyone go to Saudi to watch beardo men in white dresses throw hissy fits? And no beer! Or corn! No hissy fit is watchable without a beer and corn.

"Abdullah al-Alami, a Saudi writer, says the government will need to legislate to improve working conditions for Saudis and make the private sector more conducive to nationals."

Hahahahahahahahahaha! By more conductive he means less productive, with more benefits, and less work, you know, more like Saudi public service work. But employers can't make money hiring people under those conditions, so, the government will need to subsidize the workers, which kind of defeats the purpose of the shift.

"The labour ministry is also studying implementing a new version of nitaqat — the labour regulations that have introduced effective penalties and incentives for businesses to hire more Saudis.

But businesses say they are already struggling with these closely-monitored national employment quotas.

One foreign financial services company, which employs seven executives, including three Saudis, needs to hire another seven Saudis as it expands to keep in line with current regulations. 

“It is a hell of a tax on operations,” said the company’s manager, who declined to be identified."

Hahahahahahahahahaha!!! Hiring a Saudi is a tax! This will go swimmingly. As this is fazed in expect more businesses to simply look for more profitable locations elsewhere. If the Nitaqat was effective, it would not be causing companies to struggle. But it isn't, and it does.

"'The real issue is finding qualified Saudis, and then working to keep them, because any with marketable skills know they can jump ship at the drop of a hat,” he said. “If they have any quarrel, even something small, then they will just go.”

While some Saudis are keen to join the private sector, especially white-collar jobs, many lack the skills needed to compete with cheaper foreign workers."

I is like a affirmative action system where the majority are the affirmative action hires, but only a tiny few have any marketable skills. The value of the good workers is high, the value of the rest is zero. Both end up being overpaid. How can businesses exist in this environment? And to the extent they do, costs are extremely high, meaning that government must pay for this somehow, perhaps through a much slower economy, and lower tax returns.

The House of Saud will get a nice economics lesson out of this, and pretty much nothing else.

"The conservative kingdom’s education system has been dominated by religious learning for decades."

So, if you are looking for a religious zealot in a white dress wearing black shoes, who can rock back and forth really fast while chanting "Death to America." You're in business, otherwise you are shite out of luck. You have to hire a boat load of these nitwits anyway, which means your product costs go up, and the economy suffers! Booyah! 

"'If there should really be substantial reductions in the public sector, one key political question would be how the losers in this process would be compensated,” said Mr Herthog."

Herthog, baby, I don't think you get the gist of what's happening. The House of Saud cannot afford to continue paying all of these oil royalty consumers, they need to GET A JOB, not get a welfare sinecure. The point is to cut them free, and have them make money on their own.

My plan is easy: Welfare 0, corporate taxes 0, ditch all taxes except for a retail consumption tax, cut the public sector by 60% over 5 years, and automate every possible remaining job. If it works, great, if not, hand out camels, and chase the unemployed out into the desert. OK, just kidding. Try them for murder and behead them. Kidding.

Oh, and remind me again on why we still have such free and easy visa rules with the Saudis, and the other Middle East kingdoms? This is going to create serious problems, and we really don't want these people coming here. Does anyone really want 5,000 Postal Saudis here for an American Vacation?