Nitaqat

• Nitaqat the New Localization System for Jobs in the Kingdom of Saudi Arabia
• In order to reduce the unemployment rate among the Saudi citizens, the Saudi government issued a new system for the localization of jobs in Saudi Arabia under the name of “Nitaqat”.
• The new system replaces the system applied since 1994 under the name of “The Saudization”. 
• Nitaqat adopts several principles, which will have impacts on non-Saudis working in the Kingdom.
• The economy in Saudi Arabia – as it is the case in other states of the Gulf Cooperation Council (GCC) – depends largely on the existence of a large proportion of expatriates working for various establishments in the private and public sector.
• However, unlike the other states of the GCC, Saudi Arabia has large number of unemployed citizens which creates a state of resentment among those citizens.
• The basic principal of the system was the requirement to appoint certain percentage of the total workforce of all the establishments existing in the Kingdom from the Saudi citizens. 
• However, due to several reasons, the system did not achieve the desired objectives
• Therefore, the Saudi government has endeavoured to find other solutions to eliminate the phenomenon of unemployment among Saudi nationals.
• The efforts of the government resulted in the implementation of several strategies. The most important of these strategies was the issuance of a new system under the name “Nitaqat” for localizing the jobs in the Kingdom to replace the system of Saudization.
• The name Nitaqat means Ranges in Arabic.
• Nitaqat divides the labour market into 41 activities and each activity into 5 sizes (Giant, Large, Medium, Small and Very Small) to have in total 205 categories. 
• The performance of the establishment in the localization of the jobs is to be evaluated compared with the similar establishment’s activity and size in order to have fair standard for the evaluation
• After the evaluation, Nitaqat classifies these establishments into ranges (Excellent, Green, Yellow and Red) based on the ratio of the citizens working in the establishment.
• The Excellent and Green range, which are the ranges with the highest localization ratios, will be rewarded, while the system deals firmly with the Red range, which is the range with the lowest localization ratio and gives more time for the Yellow range to adjust their positions, being the medium range.
• The motive of applying the Nitaqat system is to make the appointment of Saudi citizens represent a competitive advantage for the establishments in the Kingdom.

IMPACT ON INDIA

• The 'Nitaqat' law makes it mandatory for local companies to hire one Saudi national for every 10 migrant workers. 
• There has been widespread perception that the new policy will lead to denial of job opportunities for a large number of Indians working there.
• Over two million Indians are currently working in Saudi Arabia. The Saudi government was implementing the Nitaqat law to cut unemployment in the country.
• About 18,000 Indian workers in Saudi Arabia, who had applied for emergency exit papers amid concerns about possible job losses after a new labour law, have got their travel documents processed.