The Ministry of Industry and Mineral Resources in the Kingdom of Saudi Arabia revealed the positive impact of the state’s initiative to bear the financial compensation paid by expatriate workers in industrial establishments licensed by the Ministry since its implementation in October 2019, which contributed to raising the nationalization index and the participation of private sector the industrial field.

The ministry noted that the size of investments in the sector for new licenses increased by 116% after the launch of the initiative, and that the new industrial licenses during this period achieved a growth of 95% compared to the previous year.

The Ministry said in a press statement today (according to the indicators of the National Center for Industrial Information), that about 8,967 factories have benefited from the state’s financial compensation for employment in the sector until the end of last September, which represents about 95% of the total number of existing factories, while the rest of the factories did not benefit from the initiative due to several problems in performance of its work, including stopping services or expiring licenses.

The ministry said the number of new licenses from September 2019 until September 2020 reached 836 industrial licenses, an increase of 95% compared to the same period last year, accompanied by a growth in the volume of investments for new licenses, by up to 116%, and the number of licensed jobs increased to more than 32 thousand jobs, of which 11709 are for citizens, an increase of 40% during the first year of the implementation of the decision.

It indicated that the growth rate of factories during the period from September 2019 to September 2020, which represents the first year of implementing the initiative,exceeded 9%, as the total number of factories in the Kingdom reached 9445 factories compared to 8,657 in the period preceding the decision, and the total volume of investments in the sector increased. The industrial sector reached 1.083 trillion riyals, a rise of 7%, compared to 2% for the same period last year, which means rise of the attractiveness of this vital sector after the exemption despite the repercussions of the Corona pandemic and its resulting effects on the economy.

The Ministry of Industry and Mineral Resources said that all the jobs that were lost during the repercussions of the Corona pandemic, the sector were fully restored by the sector during the past three months, noting the sector’s role in creating jobs since every job in the industrial sector creates from 5 to 10 jobs in the remaining vital economic
sectors, and that the initiative has created about 240 thousand direct and actual jobs, of which 81 thousand actual and future jobs are in factories under construction or started production this year.

It is noteworthy that the state’s decision to bear the financial compensation aims to give factories a valuable opportunity to correct their conditions by replacing low-wage and low-skilled expatriate workers with modern technologies, as well as training Saudis to work in the sector, and taking advantage of the jobs available in the sector through nationalization and granting quality job opportunities to citizens. The five-year decision aims to raise the quality and production efficiency in the sector.