A POSSIBLE RETREAT ON SAUDIZATION?

C O N F I D E N T I A L RIYADH 004543 SIPDIS NOFORN SIPDIS DHAHRAN SENDS PARIS FOR ZEYA, LONDON FOR TSOU E.O. 12958: DECL: 06/07/2016 TAGS: PGOV ECON EINV SA SUBJECT: A POSSIBLE RETREAT ON SAUDIZATION? Classified by Consul General John Kincannon for reasons 1.4 (b) and (d). ¶1. (C) At a lunch hosted by senior EP businessman Yusuf Al-Dossary and his brothers, Al-Dossary told the CG that he expected an imminent but quietly implemented retreat on Saudization employment policies. Al-Dossary, a member of the Eastern Province Chamber of Commerce & Industry (EPCCI) board, said that Abdulrahman Al-Rashed, chairman of the EPCCI and concurrently chairman of the umbrella Saudi Arabian Chambers of Commerce & Industry, and five other senior members of the national chambers had met recently with King Abdullah to discuss problems arising from Minister of Labor Ghazi Al-Gosaibi's zealous efforts to promote Saudization. According to Al-Dossary, the King gave instructions to Al-Gosaibi to return to the status quo ante on Saudization in four key sectors: education, hospitals, industry, and construction. This move would reduce Saudization targets to 10 percent from 30 percent in these sectors. Al-Dossary said that Al-Gosaibi has seventeen sectors targeted for Saudization and is meeting with business representatives in the other thirteen sectors about whether those targets should be adjusted. ¶2. (C) At the same lunch, Khalifa and Khalid Al-Dossary claimed that two Chinese construction companies had recently received waivers from Saudization requirements. In several months, they said, these companies will be open for business in the EP with an entirely Chinese labor force. Asked who had approved the waivers, Khalifa replied, "A big shot." Khalifa and Khalid noted that to the best of their knowledge no other construction firm - Saudi or international - had received such a waiver. ¶3. (C) Comment: Whether or not the retreat on Saudization comes to pass, Saudi businessmen clearly continue to lobby the SAG hard on Saudization. There is intense pressure on the government for visas for expatriate workers, particularly in the construction sector, and we would not be surprised if influential people had arranged Saudization waivers for several construction companies in order to get their projects finished. End comment. (APPROVED: KINCANNON) OBERWETTER