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Will Women Benefit From Saudi Economic Reforms?

26/05/2016 10:46 | Updated 26 May 2016

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Is the discriminatory male guardianship system over in Saudi Arabia? Source: Tribes of the World

With the ascension of King Salman to the Saudi throne, and the appointment of his young son Deputy Crown Prince Mohammad Bin Salman to oversee the country's modernisation plan, hopes have been raised that women's rights might finally start to be taken seriously in the Kingdom. In an interview earlier this year, the deputy crown prince said he believed that "women have rights in Islam that they've yet to obtain" and spoke about the need to increase women's participation in the workforce. While most activists focus on the contentious ban on women driving in the Kingdom, the real gamble will be breaking the social chains preventing women from embracing careers and becoming financially independent.

Indeed, the deputy crown prince's ambivalent comment speaks to the centripetal forces at play when it comes to the position of women in Saudi society. On the one hand, led by the late king Abdullah, positive steps have been taken towards female empowerment, but these efforts have been held up by an entrenched set of cultural values and a corresponding legal system that militates against the inclusion of women in the workforce.

The reforms began in 2005 when King Abdullah allowed for women to apply for overseas scholarships for the first time. Thousands of women signed up, and in the process of studying in Europe and the US, gained exposure to societies that are more progressive in terms of women's rights. Further reforms in 2009 saw the opening of the country's first coed university in Jeddah, followed by the world's largest all-female university in Riyadh. With the number of female graduates soaring, but with few outlets beyond nursing or teaching to absorb them, the Saudi state found itself saddled with a growing social welfare bill. The situation was only exacerbated after King Abdullah raised the unemployment benefit to $530 a month in 2011 to stave off the kind of unrest among unemployed youth the led to the outbreak of the Arab Spring in Tunisia and Egypt.

At the same time, several billion dollars a year were leaving the state in the form of remittances sent home by the eight million foreign workers who made up the bulk of Saudi labour force. Recognising that in the long term this constituted a losing economic strategy, the Saudi authorities embarked on the most radical plans yet, a process dubbed Saudisation, aimed at encouraging more Saudi nationals, including women, into the workplace. The exigencies of implementing this scheme have resulted in a gradual chipping away of some hidebound mores. In the past, women shopping for lingerie at their local Marks & Spencer's or for cosmetics at Boots (both companies are big players in Saudi) were forced to make their purchases from male retail assistants. However, under the new economic reform plans, these departments could now be staffed by women.

Another way in which Saudi women have managed to circumvent religious strictures preventing them from participating in commercial life is by setting up their own shops online. Instagram, in particular, has enabled thousands of Saudi women to sell their homemade goods and wares without having to leave the house, thereby skirting the prohibition on women driving.

All of this has resulted in a huge increase in female employment numbers, growing by more than 48% since 2010, more than double the rate for that of men, to over 800,000. Positive as this is may be, it still means that women account for only 16% of the workforce.

The next wave of economic reforms, announced this year as a part of a push to diversify the Saudi economy in the wake of plunging oil prices, should serve to further improve women's employment prospects. Besides the headline-grabbing plans to part-privatise the national oil giant, Saudi Aramco, measures have also been announced to open up a range of industries, from aviation to healthcare, to foreign investment. The latter sector is poised to see the entrance of private insurers and healthcare providers as well as increased investment into the development of generic drugs, medical equipment, healthcare IT and training.

A new tourism law has, for the first time, provided for the issuing of tourist visas to the Kingdom and review of the gulf state's tourist potential focusing on the Red Sea, its deserts and heritage sites is underway. The law also stipulates that companies looking to operate in the tourism sector must abide by the country's Saudisation rules, meaning a certain percentage of all jobs created have to go to Saudi nationals. More broadly, the Companies Law, which came into effect this year, permits 100% foreign ownership of companies in all but four sectors of the economy. This should make Saudi a much more appealing prospect to multinationals than it has been in the past when foreign entrants into the market were required to take on a local partner before setting up operations. The Kingdom is the UK's biggest trade partner in the region, with some £5 billion worth of exports in 2015, ties that should increase markedly in line with Saudi's diversification and modernisation efforts.

With the government's expressed aim of reducing unemployment from its current level of 12% down to 7%, the number of women leaving the home to take up work looks set to continue its surge. Just as women entering the workforce in the West served as a prelude to their social advancement one can only hope that the same process will be replicated in the conservative kingdom and replace its current ignominious stance towards women.

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