Recent discussion about the royal succession in Saudi Arabia has raised the possibility that the reform process in the kingdom may stall. But the reality is that, for many years to come, such an option is not available to policymakers or rulers.
The central challenge facing Saudi Arabia is that, with a population growing by a little more than 2.3 per cent a year, and more than 34 per cent of its people below the age of 15, the labour market needs to generate more jobs for nationals.
The economy is generating work, but in 2009 for every 100 positions created only eight went to Saudis, with the balance going to foreigners. In the kingdom, as in the rest of the Gulf, labour market reforms must be introduced to escape the trap of reliance on cheap expatriate labour. The private sector in particular has to make efforts to wean itself from profit margins based fundamentally on cheap expatriate workers.
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