Monday 24th October 2011

Saudi Arabia to Introduce Outward Remittance Limit

The Arabian government has announced plans to limit the amount of money expatriates living and working in the country are permitted to send outside of the country amid concerns that the value of outward remittances is having a potentially damaging effect on their economy. The Saudi Arabian Labor Ministry have announced plans to introduce a “salary protection” program that will specify how much money expatriates are able to send back home and is designed to keep the majority of expatriate’s money in the country.

Announcing the changes, a minister from the Labor Ministry, Saudi labor minister, Adel Fakih, said: “About nine out of 10 workers in the country are foreigners. This has led to millions of riyals being transferred back to their home countries, harming the local economy.”

A further spokesman from the ministry also revealed further plans to increase the number of Saudi nationals working in the country and decrease the amount of expatriate jobs: “The maximum number of long-term expatriate workers in the kingdom should not exceed 20 percent of the Saudi population,” a spokesman from the ministry was quoted as saying.

The plans, which are aimed at protecting the demographic structure of the Kingdom, will see almost three million expatriates leave the country over the next few years. Currently, the number of expatriates (8.42 million) accounts for 31 percent of the Saudi population of 18.7 million. However, the “Saudization” plan that was announced earlier in the year will be eliminated in favor of the new “Hafix” program that will provide unemployment benefit fro Saudi nationals who are unemployed and will assist those individuals to develop the skills they need to get back to work.

It is anticipated that the government plans to introduce unemployment benefits will commence in November.

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