Saudi Arabia Appoints Its Third Labor Minister in Three Years

(Bloomberg) -- Saudi Arabia appointed its third labor minister in little more than three years as the oil-rich kingdom struggles to reduce unemployment among its overwhelmingly young population.

King Salman dismissed Ali bin Nasser Al-Ghafis from the post, replacing him with Ahmed bin Sulaiman Al Rajhi, a scion of one of Saudi Arabia’s largest banking families, according to royal orders published by state media on Saturday. Al-Ghafis had been labor minister since December 2016. Before him, Mufrej Al-Haqbani served in the post from April 2015.

Al Rajhi will aim to succeed where his predecessors failed. His tasks will include reducing an unemployment rate of 12.8 percent at a time the government tightens subsidies and curtails spending. Job creation in the kingdom has stagnated, even after the government pushed companies to replace foreign workers with nationals and limited hiring in some sectors to citizens.

The frequency of change at the helm of the labor ministry shows the difficulty of creating jobs, Abu Dhabi Commercial Bank’s chief economist Monica Malik said. “The fiscal austerity over the last few years has been a headwind to job creation, both on the public and private fronts,” she wrote.

The unemployment rate is likely to climb over the coming years as social reforms open up new sectors to women, widening the pool of job seekers, Malik said. Another challenge is the mismatch between the needs of the job market and the qualifications of many new graduates that’s hindering companies’ ability to employ nationals.

Saturday’s royal decree also created a ministry for culture and appointed Prince Badr bin Farhan Al Saud as the minister in charge of it. The decree separated the new culture ministry from the ministry of information.

Prince Badr’s main challenge will be capturing more of Saudis’ spending on leisure and keeping it at home by expanding a narrow range of entertainment options. The prince was appointed chairman of the Saudi Research and Marketing Group in 2015. The Riyadh-based group publishes newspapers including Arab News and London-based Al Sharq AlAwsat.

Among other appointments, Abdel Latif Al Alsheikh was named as minister of Islamic affairs. Alsheikh was put in charge of the kingdom’s religious police in 2012 after the body’s powers were curbed following years of public criticism.

The royal decree also named several deputies for the ministries of interior, transport, telecommunications and energy as well as industry and minerals. It appointed new heads to two government bodies -- the Royal Commission for Jubail and Yanbu, and the King Abdullah City for Atomic and Renewable Energy.

• Abdulaziz Al-Abdul Kareem appointed vice energy minister
• Maaden Co. Chief Executive Officer Khalid Bin Saleh Al Mudaifer appointed vice energy minister for mining
• Nasser al-Nafisi appointed assistant to energy minister
• Khalid al-Sultan appointed head of King Abdullah City for Atomic and Renewable Energy

To contact the reporter on this story: Zainab Fattah in Dubai at zfattah@bloomberg.net

To contact the editors responsible for this story: Alaa Shahine at asalha@bloomberg.net, Paul Jarvis, Stefania Bianchi

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