Saudi Arabia has achieved a remarkable milestone by reducing its unemployment rate to the lowest level in nearly five years. A combination of factors, including the swift government response to the COVID-19 pandemic, increased female participation in the workforce, and the economic reforms outlined in Vision 2030, have contributed to this significant achievement.According to the General Authority for Statistics (GASTAT), the overall unemployment rate in Saudi Arabia dropped to 11.7% in the first quarter of 2021, compared to 12.6% in the last quarter of 2020. This is the lowest rate recorded since the second quarter of 2016 when it stood at 11.6%.
One of the most notable contributors to this decline in unemployment is the growing participation of women in the labor market. Female workforce participation increased to 33.6% in the first quarter of 2021, up from 32.1% in the previous quarter. This rise reflects Saudi Arabia’s commitment to empowering women and providing them with greater opportunities in the job market.Several key factors have driven this achievement:1. Robust Government Response to the Pandemic: The Saudi government’s proactive measures to mitigate the economic impact of the pandemic played a crucial role in stabilizing the job market. Support and incentive packages provided to businesses and employers helped prevent widespread job losses during the challenging times of the pandemic.2. Vision 2030 Economic Reforms: Saudi Arabia’s Vision 2030 plan, initiated by Crown Prince Mohammed bin Salman, has been instrumental in creating economic diversification and generating millions of jobs.
The government’s commitment to reducing unemployment to 7% by 2030 has driven various economic reforms aimed at bolstering the private sector.3. Saudization of Commercial Sectors: The government’s efforts to Saudize many commercial sectors in private businesses have had a positive impact on reducing unemployment. These measures have encouraged more Saudis to enter the private sector workforce and accept a broader range of job opportunities.4. Empowering Women in the Workforce: Saudi Arabia’s emphasis on gender diversity and women’s participation in the labor market has led to a surge in female employment. Women are increasingly joining the workforce and contributing actively to the country’s economy.
Economist Talat Zaki Hafiz emphasized the role of government initiatives in Saudizing private businesses and empowering women in the labor market as significant drivers behind the reduction in unemployment. He expressed confidence that Saudi Arabia is on track to achieve its Vision 2030 target of a 7% unemployment rate.Dr. Osama Ghanem Al-Obaidy, adviser and law professor at the Institute of Public Administration in Riyadh, lauded Saudi Vision 2030 for highlighting the importance of increasing Saudi employment levels. He noted that while many countries faced substantial job losses due to the pandemic, Saudi Arabia effectively managed to lower its unemployment rate through government policies and support measures.Al-Obaidy cited employment programs, especially for young Saudis, including women, as well as investments by the Saudi Public Investment Fund and economic reforms, as key contributors to the declining unemployment rate.
He also emphasized the government’s provision of support and incentives to businesses and employers, which helped safeguard jobs during the pandemic’s challenging circumstances.The success in lowering the unemployment rate in Saudi Arabia is not only a testament to the resilience of the Saudi economy but also a reflection of the Kingdom’s commitment to empowering its citizens, regardless of gender, and driving economic growth through sustainable reforms. As Saudi Arabia continues on its path toward economic diversification and greater workforce participation, the nation is poised to achieve even more remarkable milestones in the years ahead.
