The introduction of tough quotas for employing Saudi nationals in the kingdom could force companies out of business, economists have warned.
Under rules aimed at providing 1.12 million new jobs for Saudi nationals by 2014, firms failing to employ a sufficient number of locals face punishment.
"Forcing companies to hire Saudis is not the right approach by itself," said John Sfakianakis, the chief economist of Banque Saudi Fransi. "The right approach is to create incentives. The incentive now is on low skills and low wages, and this has to change to high skills with higher wages in an exonomy with open immigration."
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