Nitaqat check and The God’s Own country



Author: Shankar Dev


Saudi Arabia – officially known as the Kingdom of Saudi Arabia, is the largest Arab state in Western Asia constituting the bulk of the Arabian Peninsula and the second-largest in the Arab world after Algeria. It is bordered by Jordan and Iraq to the north, Kuwait to the northeast, Qatar, Bahrain and the United Arab Emirates to the east, Oman to the southeast, Yemen in the south, the Red Sea to the west and Persian Gulf to the east. Its population is estimated to consist of 16 million citizens and an additional 9 million registered foreign expatriates and 2 million illegal immigrants. Therefor  about half of the country’s total population is consisted of immigrants either legal or illegal. The country’s need for enormous cheap, skilled and semi-skilled workforce(thanks to Crude Oil) have drawn peoples from across the globe mainly from India, Bangladesh, maldieves, Indonesia, Egypt, Pakistan, Philippines.

But due to cheap availability of foreign workforce Saudi’s private companies started to completely ignore their native workers. As a result, the unemployment rate among Saudi nationals has reached 12 per cent. A report shows, more than 6.5 million non-Saudis are working in the private sector of the Kingdom compared to 7,00,000 Saudis. In 2012 there were 3,40,000 firms in the Kingdom that did not employ any Saudi. In the same time the Arab spring sprouted in Tunisia started to ‘epidemic’ the central Asia, which was mainly propagated by unemployed youths. This haunted Saudi Arabian govt, showed a quick stimulus to check the unemployment of the country and came up with several plans. One of them which worries India (particularly kerala) is Nitaqat issue.


Nitaqat’ means naturalisation law, aimed at eliminating unemployment and localising jobs in the Kingdom, under which 10 per cent jobs would be reserved for Saudi nationals. It sooths growing feeling of resentment among citizens of Saudi Arabia resulting from the labour market competition they face from expatriate workforce. Nitaqat seeks to replace the 1994 scheme of Saudization which required 30 per cent of the jobs to be reserved for Saudi citizens. Saudization scheme failed due to the inherent loopholes in the system and the targeted 30 per cent localisation of jobs could not be achieved.  

The Nitaqat, divides the Saudi labour market into 41 activities (real estate, builders, hotels etc). each of this activity is further classified according to their sizes- Giant, Large, Medium, Small and Very Small. Totally 41×5= 205 categories.

Again Nitaqat classifies establishments into ranges – Blue, Green, Yellow and Red, based on the Citizen : Immigrant ratio of the company. The Excellent and Green range, which are the ranges with the highest localisation ratios, will be rewarded with incentives like tax cut etc, while yellow and Red would be treated appropriately to increase the ratio of domestic workforce.

The Domestic worker should be paid atleast 3 times more than the immigrant workers.


The most recent additions to the Nitaqat law that an expatriate worker should work only under his sponsor and the worker is not meant to perform any job other than the one mentioned on his job card. Adding insult to injury, Saudi government has increased the fee for renewing labour cards (iqamas) to SAR2, 500 from 100. This had raised panic among both legal and illeagal immigrant workers.

Recently Ooman Chandy, CM of Kerala had urged centre to deal the Nitaqat issue with bilateral Talks.

Saudi Arabia being a soverign country has sole right to make laws for the well being of its citizens. Then what step India should take??

Diaspora – people who have spread or been dispersed from their homeland.

India has the worlds highest Diaspora, only next to China. About 25 million people spread across 200+ countries. Though India have less number of diaspora compared to china, according to world bank, India tops the world in terms of migrant population remittances. It is the major source of Foreign currency, saving India from BOP to some extent. Inorder to honour their contribution Ministry of overseas Affairs organises Pravasi Bharatiya Divas (PBD), on 9th january every year since 2013.

As already seen, about 5 million Indian workers are working in Gulf countries. From this 5 million more than 85% are hailing from Kerala. This migrant population remittances were consistently contributing to the economy of the state, especially to the northern districts of Malappuram, Kozhikode, Kannur and Kasargode. The inflow of remittance payments from Saudi Arabia has considerably raised living standards in these districts. Saudi Arabia continues to be the most desired destination among the low and semi-skilled Keralites.

The strict adherence to the Nitaqat regulations will result in immediate job losses and reduced job opportunities. Many small scale shops and establishments in Saudi Arabia are run by Keralites under licences in the names of Saudi nationals. Now all such shops and establishments must have 10 per cent of their employees from among Saudi nationals who should be paid at least 3 times more salary than their expatriate counterparts. It is almost impossible now to run companies on the licences given to Saudi nationals. Strict actions are being taken against benami businesses. Most shops run by Keralites are already closed.

This sudden Crack-down may rise heat waves across the state and this could have multiplier effect on the states economy. As the workers loose their jobs, they reduce their expenditure and workers who still have their job also start to save their money as a precautionary measure. When their expenditure is reduced, the large pool of jewellery shops, textiles, restaurents depending upon them will also lose their business. Mainly the Banks are more likely to get affected as their NRI deposits are increasingly declining.

Due to the consisitent pressure from Kerala Govt, Indian diplomatic channels had some negotiations, whose results are

  • Nitaqat inspections will be temporarily stopped for 3 months to allow illegal immigrants to legalise their stay in Saudi Arabia.
  • Ryadh governor’s order of deferring the process of catching illegal migrants in Riyadh also provides some temporary relief to the illegal migrants. 

But this is only a temporary relief. Given the proven strictness of the Saudi administration, the statements made by Kerala ministers that the expatriates need not panic and that the issue could be bilaterally solved by dialogue with Saudi authorities are not providing much hope to expatriates.

On an emergency basis both the central and state governments must plan out strong rehabilitation packages for the unemployed Saudi returnees. Assistance should be offered for safe return like sponsoring the air fares, rehabilitation measures.

When viewed with “Half glass Full” attitude, the Saudi crackdown on illegal migrants should be viewed as a “blessing in disguise” since it is going to open up more opportunities for the legal migrants from the state. There is no need for the legal immigrant worker to panic. Kerala should grab this opportunity by providing the needed skills to the future migrants and allowing them to migrate legally.

Above all Kerala must focus on more employment opportunities for its labour force. The government should also undertake massive investments in infrastructure and industrial development to boost up employment opportunities, by facilitating the path for investors leaving its communist mind-set behind.

(Article is also containing input from the work of Mr. P.M Mathew, published in ‘The New Indian Express’ (13/04/2013). We are greatly thankful to them)


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