Wednesday, September 13, 2006

Article: Why isn't Saudization working?

Only folks who have ever had ties to the Saudi kingdom should read this. And, of those, only a handful will find it interesting. It discusses the current state of Saudization and why it's not working out quite like the Saudis thought that it would.

For those who don't know, back in the early 20th century, when Saudi was mainly tribal and the initial discoveries of oil were made, the royal family made an agreement with foreign nations that they could come in and make the major contributions to the development of their country but that a planned phase-out of expatriate employment would happen decades later to allow the state to be wholey owned and operated by Saudis and for Saudis. The primary instrument for this development was the formation of a company called the "Arabian / American Oil Company" (or "Aramco" for short). Aramco later became the greatest oil producing company in the world. In the late 80s, the Saudi govt. bought the last of the remaining publically traded stock in the company and it became a completely state-owned entity. Since then, the phase-out of foreign workers (called "Saudization") has been taking place. It has not been as successful as the Saudi government had hoped.

"Why did we fail in achieving the Saudization target? Is it because we are a spoiled nation? Is it because we don’t have the required expertise? Is it because Saudis are always waiting to assume administrative positions? Is it because we’re not used to being punctual and starting work early? Is it because we can’t do overtime like the foreigners that work in the Kingdom? Perhaps these are some of the reasons why the process of Saudization is not succeeding. Some people may think I’m exaggerating — but I wonder what the truth must be?"

My interest in this is simply because I was once a beneficiary of Aramco. That was long ago though. Since then, I just kinda keep tabs here and there.

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