The recently approved unemployment allowance represents a temporary solution to the negative economic, political and social effects of unemployment on the situation in the Kingdom. In order to transform this temporary solution into a solution that contributes to addressing the imbalance in the labor market between output and demand in the labor market, we need to link it to training and employment.
The difference in purchasing power between countries of the world, the openness of the Saudi labor market to countries of the world, and the ease of movement and transfer of capital must be taken into account when studying the labor market in Saudi Arabia. National labor is part of the labor available to work in the Saudi economy, and due to the difference in purchasing power from one country to another, local companies can benefit from the difference in purchasing power by bringing in labor at a lower cost compared to the purchasing power in Saudi Arabia. Consequently, the worker’s productivity is less than his wage in the Saudi economy, which in this case represents the average wage of the worker in the countries from which labor is brought in to meet demand in the sector under study, especially in low-level or unskilled jobs. Therefore, linking unemployment allowance to training will increase the productivity of the Saudi worker to exceed the capabilities of expatriate workers, which will be positively reflected in demand and the wages they receive. Since education outcomes and their difference from the real demand in the market are part of the causes of the problem, linking unemployment allowance to registering the unemployed in one of the accredited training institutions will ensure that the period of time spent by the unemployed is a period of construction and not a period of destruction of their professional and personal capabilities. During this period, the individual is allowed to determine the training they wish to join, and develop their personal or professional skills to increase the probability of obtaining a job. The role of training courses is not supposed to be limited to preparing them for the labor market, but should open the door to training courses that contribute to establishing small projects and private businesses, to benefit from available small project loans. To encourage this trend, the government is expected to pay the costs of the training courses in which the individual is registered. In order to achieve the desired goal of linking training to unemployment allowance, the Ministry of Labor is required to ensure the necessary environment for the success of this link through its role in monitoring the performance of training institutions in cooperation with the General Organization for Technical and Vocational Training. The Ministry is also expected to play the role of a guide for the unemployed to the appropriate training path for the individual without coercion, so that the freedom of choice is left to the individual, through the database it has on the opportunities available at the present time, the trends of future demand according to the labor market, expectations of the growth of the Saudi economy and the changes that the economy is going through due to the different stages of growth.
Linking training and unemployment benefits will help direct these subsidies to become part of investment in human capital and the development of the Saudi workforce to help develop capabilities within the economy. In order for the system to be complete and contribute to solving unemployment in a way that serves the Saudi economy in the long term, foreign investment systems must be reviewed so that they do not compete with small and medium enterprises. The Saudi economy does not suffer from a shortage of liquidity and financial resources available for investment. Rather, the support that funds that support small and medium enterprises have received cannot bear fruit in an appropriate manner under foreign investment systems, which have increased the degree of risk for small and medium enterprises due to opening the way for global competition for these projects domestically. In order for the system to be complete and achieve its ultimate goal, small and medium enterprises must be supported by special systems that take these projects into account, reduce their establishment costs, and facilitate establishment procedures. Work from home must also be supported to benefit from the information revolution and the potential of the Internet.