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Saudi Arabia to nationalize food delivery sector

Saudi Arabia to nationalize food delivery sector

Saudi Arabia to fully localize food delivery sector in the country amidst efforts to create more jobs for nationals. The initiative, to be implemented in food delivery vehicles that supply ice cream, beverages and other food products, will come into force from next month.

In addition, 20 percent of restaurants and 40 percent of eateries operating in shopping malls or commercial centres are to be nationalized. The new regulation will apply to restaurants employing four or more workers per shift. The move will affect around 300,000 expats including Indians.

The Ministry of Transport also introduced full nationalization in the ride-hailing service sector.

The Ministry of Human Resources and Social Development (MHRSD) announced its decision, earlier, to localize most jobs in malls in all regions of the Kingdom, from August 4. The ministerial decisions are part of the Nitaqat scheme to create 51,000 jobs in the local market for nationals.

'Saudization' or Nitaqat scheme is a policy implemented in 2011 by the MHRSD by which enterprises are encouraged to employ more nationals as their labour force as part of expanding job opportunities for local workforce. Last year, the ministry raised the minimum wage for all natives, both employed and new recruits, registered in the Nitaqat program from SR3,000 to SR4,000.

As part of boosting Saudization in the various sectors, the MHRSD and Ministry of Industry and Mineral Resources launched a wage subsidy programme last week. The programme will ensure 50 percent of the wage for hiring and training nationals to take up jobs in industrial establishments.

Several private sectors including IT, accounting, engineering, tourism have also introduced indigenization at the rate of 21.54 percent, as per the stats during the third quarter of 2020.

With the total population at 35.34 million as per the UN estimates, the Kingdom currently homes around 30 percent expat population, in which Indians being the second most accommodated diaspora with an estimate of 1.54 million, according to Global Media Insights.

Nationalization would result in massive loss in employment opportunities for expatriate community, however, would result in the increased development of skilled local labour.

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