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The Impact Of Saudization

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amal altwaijri

on 29 December 2013

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Transcript of The Impact Of Saudization

The Impact Of Saudization
On The Private Sector

What is Saudization?
The perspective of the private sector
Saudization can play an important role in turning the unemployment issue around but in the other hand it will have its own side affects on the private sector.

Many in the private sector argue against the methods being used to enforce and apply Saudization.

The private sector view of Saudization is that it represents an obstruction to their freedom to practice their choice of employees whether in quantity or quality.

The Ministry of Labor has to apply a better assessment of available qualification and qualities among Saudis, instead of assuming that the private sector will manage allocating them.
creating more job opportunities by developing the economy and expanding areas of work for Saudis to become more productive.
Promoting huge investment projects and high-tech services, and strictly implementing Saudi Arabia’s regulations can create more jobs for our citizens
Despite the fact that Saudi Arabia is one of the main oil producers in the world, it also has a lot of difficulties in providing enough jobs for its population .

But Recently, dealing with the rising unemployment rate among Saudi population became the focus of the government’s attention.

However, a government policy called
has been introduced to solve the unemployment issue.
It is a national policy of Saudi Arabia to encourage employment of Saudi nationals in the staff of foreign and national companies operating in Saudi Arabia (the private sector).

In other words, it means replacing a givin percentage of foreign workers with Saudi nationals.
The utilitarian view on Saudization
An action is right if it tends to promote the greatest happiness, not just the happiness of the performer of the action but also the happiness of everyone affected by it, and wrong if it tends to produce the reverse of happiness (pain).

Saudization has played a positive role to solve unemployment in Saudi Arabia, which caused an acceptable amount of happiness to some people (nationals).

In the other hand, it has a negative effect on the private sector itself, including the private business owners, and foreign employees and workers. It's illustrated that utilitarianism is against
because it did not maximize an overall benefits or happiness, nor minimize pain
Does this policy come in conflict with the narrow view of corporate responsibility?
The narrow view of corporate responsibility

is that businesses have no social responsibilities other than maximizing profits.

the policy of Saudization comes in conflict with the narrow view of corporate responsibilities, because private enterprises should not be forced to undertake any public responsibilities, such as unemployment in this case, that properly belong to the government.
Can we justify this policy by appealing to any of the normative ideals inherent in the “broader view of corporate social responsibility”?

The broader view of corporate social responsibility

states that a corporation has obligations not only to its stockholders, but also to all other constituencies that affect, or are affected by, its behavior. It extends beyond just maximizing profit and that it needs to act as a responsible member of society.

Corporations must take responsibility for the unintended negative effects of their business externalities and weigh the full social costs of their activities.

What should be the extent of government intervention in corporate sector?

There is a strong case for government intervention in different fields.
In a free market, there tends to be inequality of income, wealth and opportunity. Government intervention is necessary to regulate them within society.

Without government intervention, we are liable to see the growth of monopoly power. Government intervention can regulate monopolies.

government intervention can promote greater equality of income, which is perceived as fairer.
also called free market economy, is an economic system in which the means for production and distribution are privately owned .

The profit motive implies a critical assumption about human nature, that human beings are economic creatures who are motivated by their own monetary interests.

One basic defense of capitalism rests on a supposed natural moral right to property. Saudization policy has violated those rights by forcing the private sector to replace foreign laborers with nationals. And by preventing business owners from practicing their freedom and hiring whoever they think is better for their business.
Does the policy of Saudization come in conflict with the basic tents of capitalism and free market economics?

Amal Al.Twaijri
The libertarian view on Saudization
Libertarians believe in individual liberty, personal responsibility and freedom from government, in all issues at all times.

It is obvious that Libertarianism is against the
policy because according to libertarianism, firms owners should be free to hire whoever they want. The private sector should be given the freedom to grow businesses the way they know is right for them.

Some economic analysis indicates that the only role of government to develop the economy of Saudi Arabia is minimal by staying out of the way and and by allowing the people who create jobs do what they do best.
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