A look into the increasingly diverse industry sectors being targeted by Saudization efforts in Saudi Arabia
- Sectors currently targeted for Saudization have traditionally been unattractive to citizens due to low wages in comparison to the public sector
- Successful nationalization efforts in the private sector will most likely require wage subsidies
In this Insights at the Edge of Government Analysis Flash, we look at the increasingly diverse industry sectors being targeted by Saudization efforts in Saudi Arabia. In the GCC countries, a key challenge to promoting employment in more diverse sectors of the economy and the private sector remains the relatively high reservation wage set by public sector employers.
Recent high profile Saudization efforts are increasingly targeting economic sectors offering average monthly wages from 3,000-5,000 Saudi Riyal per month which have traditionally not been financially and socially attractive.
Without a wage subsidy program, potentially similar to Kuwait that incentivizes private sector employment, public sector employment will likely to continue to attract the vast majority of Saudis and put pressure on Saudis to wait for public sector positions.