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The keys to achieving social stability and economic growth

Article - October 15, 2013
Unprecedented governmental efforts to promote the education and training of young Saudis, both in the kingdom and abroad, coupled with the spread of the internet, are opening up professional opportunities for the nation's youth
Aware of the challenges that could obstruct Saudi Arabia’s development, the popular administration of King Abdullah bin Abdulaziz has undertaken numerous measures to set the country on the path to a more sustainable future. 
As Dr Fahad Almubarak, Governor of the Saudi Arabian Monetary Agency (SAMA), notes: “The Custodian of the Two Holy Mosques is well-known for his concern about his citizens and he is determined to closely follow up their needs, including the reduction of poverty, supporting social security, addressing the housing issue, supporting specialised development funds, and other decisions aimed at improving citizens’ living conditions.”
Education stands out as a top government priority, as reflected by the generous budget it enjoys and by the advances made in the last four decades in educating and training the local population. For 2013, education was allocated an unprecedented 25 per cent of the state budget, or £35.8 billion, which represents one-tenth of Saudi Arabia’s GDP. In comparison, most EU member countries allocate 5 per cent or less of their GDP to education. 
This extraordinary investment is highly necessary in a country where half of the population is under 25 years old and 64 per cent under 30. In addition, literacy rates among men and particularly women were dire only a generation ago. As late as 1970, the literacy rate stood at 15 per cent for men and only 2 per cent for women, while in 2009 it stood at 96.5 per cent for both sexes.
Saudi Arabia has indeed come a long way in its pursuit of primary and secondary education, but much remains to be done in the areas of higher education and vocational training to prepare its youth for the world of gainful employment. To address this issue, the government adopted a multi-pronged strategy that tackles educational opportunities, scholarships and student exchanges, government-sponsored traineeships and support for the incorporation of young Saudis into the job market.  
Expanding educational opportunities through investments in universities and research institutes is the first stage of this strategy and the kingdom has excelled at pursuing science and technology programmes in recent years. 
King Abdullah University for Science and Technology (KAUST) is a prime example of such a programme. Located on the outskirts of Jeddah, Saudi Arabia’s second largest city, KAUST is a coeducational graduate research institute that attracts researchers and graduate students from around the world. It is the education arm of the King Abdullah Economic City (KAEC), one of the six economic cities being built throughout the country. 
Similar institutions are being developed as part of the Knowledge Economic City (KEC), a large R&D cluster under construction on the outskirts of Medina and the Prince Abdulaziz bin Musaed Economic City (PABMEC).  
Through these initiatives, the Saudi Arabian General Investment Authority (SAGIA), the institution commissioned to oversee their development, aims to create growth opportunities through education and research in the communities where they are based – namely in the cities of Rabigh, Jazan, Medinah, Hail, Tabouk and Dammam – and to attract private sector investment in infrastructure, real estate and industry. 
Once completed, the cities will enjoy a business-friendly regulatory environment comparable to free zones in other parts of the world and will be models of innovation in public-private partnerships (PPPs). The stated goal is that, by 2020, the cities will contribute to a more diverse Saudi economy and will create 1.3 million jobs. 
One of King Abdullah’s most praised initiatives is the King Abdullah Scholarship Programme (KASP), which was set up the same year he acceded to the throne, in 2005. The programme enables approximately 150,000 Saudi students to study abroad every year by covering tuition and other costs related to their education.

Almost half of those who receive the scholarship choose to study in the USA, while the other half studies in 21 other countries, most of which are located in Europe. The UK has an important educational partnership and language exchange programme with Saudi Arabia through the British Council and receives more than 12,000 Saudi students who come to study at British universities every year.   
The policies of Nitaqat (literally meaning “zones” in Arabic) aim to replace a section of the large expatriate workforce in the private sector with local people.  The government is using a carrot-and-stick approach to motivate private companies to hire Saudis by extending generous labour benefits to companies that achieve high Saudisation rates, classified as ‘Premium’ or ‘Green’ companies by Nitaqat. Those with low rates are designated as ‘Yellow’ or ‘Red’ companies and are subject to penalties from the government.
The Human Resources Development Fund (Hadaf) is a governmental institution that supports private companies to locate and hire Saudi employees through numerous programmes that provide financial and logistical support for the training and promotion of Saudi job seekers. 
Dr Abdulkarim Alnujaidi, Hadaf Executive Deputy Director General, explains: “Saudisation is the way to the future. Investing in equipping our youth with the skills they need to join the private sector is the way to a sustainable future. The nationalisation of the labour force is key to sustaining economic growth and social stability.”
In addition to the government’s efforts to promote education and training, an important phenomenon that is shaping the future of Saudi youth is the staggering spread of technology. In a country with few entertainment options, the internet and particularly social media are a refuge for youth and offer, in addition to alternatives for how to spend free time, a window to the world. Saudi Arabia is the Arab world’s number one Twitter user and was the second fastest growing YouTube country after Indonesia last year. 
Technology influences all aspects of the country’s society and economy, from social dialogue to banking services to the career choices the young make. Online banking in Saudi Arabia is among the most advanced in the world, as banks seek to cater to tech-savvy young customers. Women in particular are becoming more assertive regarding their future and pursuing employment options and entrepreneurial opportunities using the internet. 
Looking ahead, technology is likely to continue to change the way young Saudis are educated and entertained, interact, communicate, seek jobs, shop and bank, and even challenge the extent to which they observe some of the ingrained cultural norms.