Saudi Arabia’s localization plan is reshaping consultancy sector - and more beyond

The Kingdom has pioneered telemedicine and e-health services, enabling virtual consultations and remote surgeries to reach the farthest communities. (SPA)
The Kingdom has pioneered telemedicine and e-health services, enabling virtual consultations and remote surgeries to reach the farthest communities. (SPA)
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Updated 19 May 2024
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Saudi Arabia’s localization plan is reshaping consultancy sector - and more beyond

Saudi Arabia’s localization plan is reshaping consultancy sector - and more beyond
  • Plan a huge opportunity for Saudi Arabia to boost local jobs and reduce its reliance on foreign workers

RIYADH: As Saudi Arabia embarks on a journey aimed at boosting job opportunities for citizens, the localization plan for consultancy professions and businesses plays a crucial role.

In October 2022, the Kingdom’s Ministry of Human Resources and Social Development issued a decision mandating that from the end of March 2024, 40 percent of workers in firms in this sector must be Saudi nationals.

The decision targeted all professions in the sector, most notably financial advisory specialists, business advisers, and cybersecurity advisory specialists, as well as project management managers, engineers, and specialists.

This targeted localization, or Saudization, is part of the cooperation between the Ministry of Human Resources and Social Development and supervising bodies, represented by the Ministry of Finance, the Local Content and Government Procurement Authority, the Expenditure and Project Efficiency Authority, and the Human Resources Development Fund.   

The collaboration aims to elevate the presence of cadres in the sector and boost the percentage of Saudis, contributing to the development of local content in this strategic sector. It also seeks to organize the labor market.

The ministry is meant to support private sector establishments in several ways, including helping them in hiring Saudis by supporting the training and qualification of employees, as well as supporting employment procedures and other initiatives.  

On a similar note, the Local Content and Government Procurement Authority is required to follow up on the commitment to include Saudization requirements in consulting contracts.

It has also issued a guide that clarifies the details of localizing the consultancy sector and professions, and the mechanism of implementing it.  

Reshaping the consultancy sector     

Azeem Zainulbhai, co-founder and chief product officer at talent-on-demand platform Outsized, believes the Saudization rules in the sector will help keep more money in the Kingdom, even though training costs could increase.

“This move means less reliance on experts from abroad in key fields like finance, project management and cybersecurity. Essentially, it’s about creating more jobs for Saudis in important, well-paying sectors and making sure they're trained for these roles,” he told Arab News.

“The end objective is to get better at handling projects and business dealings that are specific to Saudi culture and regulations, stimulate private sector growth, and foster a knowledge-based economy ultimately making companies more efficient and competitive globally,” the co-founder emphasized.

Bashar El-Jawhari, consulting partner at PwC Middle East, also stated that the localization plan initiated by Saudi Arabia marks a significant milestone in reshaping the consulting sector within the Kingdom.  




Azeem Zainulbha, Co-founder and chief product officer at Outsized

“With the launch of the second phase, we anticipate several key transformations that will contribute to the development and empowerment of local talent,” El-Jawhari told Arab News.

“Firstly, as young Saudi professionals enter the workforce, we expect a notable increase in demand for consulting services related to project and transformation management, financial and legal advisory, as well as procurement and supply chain management,” he added.

By having more Saudis in consulting, businesses can better navigate local market dynamics and regulations.

Azeem Zainulbha, Co-founder and chief product officer at Outsized

The consulting partner went on to note that the influx of senior Saudi talent into the consulting industry presents an opportunity for firms to leverage their experience and insights to drive business growth.

Sectors to be affected  

The localization push of course expands beyond the consultancy sector, Zainulbhai noted.

“Tourism and hospitality can really use local insights to attract more visitors and celebrate Saudi culture. Major construction and engineering projects, like the NEOM and the Red Sea Project, will also benefit from having local experts who understand the specific requirements and standards needed,” he said.

The Outsized executive also shed light on the fact that the healthcare, IT, cybersecurity, and renewable energy sectors are all set to improve with more local consultants who bring a deep understanding of regional needs and regulations.

“Local financial experts will be key in adapting to Saudi Arabia’s unique market, especially as it continues to grow and change,” Zainulbhai commented.

Overall, sectors essential to the diversification from oil will see substantial growth and development from this localization.  

“When looking at various sectors, certain areas are poised to benefit more prominently than others. For example, the government and public sectors are likely the first to benefit in light of the transformation journey towards Vision 2030,” El-Jawhari affirmed.

The consulting partner explained that as Saudi Arabia continues its journey toward achieving the ambitious goals outlined in Vision 2030, there is a growing emphasis on enhancing the efficiency and effectiveness of government operations.

“Consulting services play a vital role in supporting this transformation by providing strategic guidance and expertise in areas such as organizational restructuring, process optimization, and performance management,” El-Jawhari commented.

He added: “Furthermore, nationals equipped with experience in operational excellence are well-positioned to contribute to these efforts by implementing measures aimed at optimizing operational processes, reducing costs, and enhancing productivity.”

Potential opportunities

The plan is a huge opportunity for Saudi Arabia to boost local jobs and reduce its reliance on foreign workers, which aligns perfectly with the broader Vision 2030 goals.

“By having more Saudis in consulting, businesses can better navigate local market dynamics and regulations,” added Zainulbhai.

He continued to underscore that local consultants can offer insights that make companies more competitive, especially in sectors where understanding local consumer behavior is crucial.

He also clarified that businesses that follow these new hiring rules may find it easier to onboard government clients.

“The focus on local talent is also great for fostering innovation and could help companies set up successful programs to nurture new ideas in fields like digital tech and sustainability,” Zainulbhai explained.

From El-Jawhari’s point of view, the localization plan presents opportunities for Saudi nationals to enter the consulting profession, contributing to the development of a vibrant knowledge-based economy.

Potential challenges  

While there are many benefits, the plan also brings several challenges. According to Zainulbhai, those include filling talent gaps, adjusting to cultural shifts, and meeting new regulatory standards.

“To tackle these, businesses could set up mentorship programs where seasoned international consultants train up-and-coming Saudi professionals. Setting up special training centers to quickly upskill workers could also help,” the co-founder described.




Bashar El-Jawhari, Consulting partner at PwC Middle East

“There might be some resistance to these changes within companies, so promoting a culture that values diverse perspectives will be important,” he added.

Zainulbhai also believes that consulting with local legal experts will be crucial to stay on top of new regulations.

We anticipate several key transformations that will contribute to the development and empowerment of local talent.

Bashar El-Jawhari, Consulting partner at PwC Middle East

“Although initial costs might be high, businesses can look into government subsidies or focus on tech solutions to reduce long-term expenses and increase efficiency,” he said.

From PwC’s perspective, El-Jawhari said that the availability of fresh, well-educated Saudi graduates provides consulting firms access to junior talent.

“The challenge lies in retaining them beyond the first 4 to 5 years. Government and semi-government entities begin to recruit these nationals, who have gained experience in international consulting firms, to join their workforce,” he stressed.

The consulting partner went on to explain that another challenge is attracting mid-career Saudi consultants who are in high demand and short supply.

“The third challenge is distinct specialties. For example, with the strong drive toward diversifying the economy, there is a need for consulting experience across sectors such as industrial, defense, tourism and culture, sports, and entertainment, supported by international experience,” El-Jawhari revealed.

He further disclosed: “Overall, finding Saudi talent in relatively new sectors of the economy is quite challenging.”

“To expand the pool of mid-career Saudis, a program between government entities and consulting firms could be established. The program could include seconding talented mid-career Saudis into consulting firms for 1 to 2 years,” El-Jawhari clarified.

He wrapped up with this regard saying that this gives consulting firms access to mid-career Saudi talent and in return, government entities gain a mid-career professional equipped with consulting experience.

Vision 2030 implications  

Undoubtedly, this plan provides a key piece of the bigger Vision 2030 puzzle, which aims to diversify the economy beyond oil and boost public services like health and education.

“By increasing Saudi involvement in consulting, the plan helps keep more money in the country and creates high-value jobs that are crucial for modernizing the economy,” Zainulbhai said.

The co-founder also mentioned that it also focuses on upgrading the skills of the Saudi workforce, which is essential for innovation and sustained economic growth.

“More local consultants mean the private sector can grow stronger and more independent, making Saudi Arabia a more appealing place for investors and helping develop key sectors,” he concluded.

On the other side, El-Jawhari shed light on how two key outcomes of Vision 2030 are a thriving economy and a vibrant society.

“Pushing for a higher level of consulting localization will create higher-paid jobs for Saudi nationals, resulting in a more vibrant society that enjoys a higher quality of life,” the consulting partner reiterated.

“Additionally, local talent can provide the necessary expertise in specific consulting services to catalyze economic diversification,” he concluded.

 


Saudi labor market transformation ‘spectacular,’ says former Swedish minister 

Saudi labor market transformation ‘spectacular,’ says former Swedish minister 
Updated 29 January 2025
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Saudi labor market transformation ‘spectacular,’ says former Swedish minister 

Saudi labor market transformation ‘spectacular,’ says former Swedish minister 

RIYADH: Countries around the world can take lessons from the transformation of Saudi Arabia’s labor market, a former Swedish employment minister has insisted.

Speaking to Arab News on the sidelines of the Global Labor Market Conference in Riyadh, Sven Otto Littorin praised the Kingdom’s progress since the launch of Vision 2030, which has seen female workforce participation doubling in nearly six years. 

The changes have seen Saudi Arabia emerge as a global leader in addressing labor market challenges, skill development, and workforce prequalification, as highlighted in the inaugural GLMC report in December. 

The findings align with Vision 2030’s goal to reduce unemployment from 11.6 percent in 2017 to 7 percent by the end of the decade. 

“I would go as far as to say that most other countries could learn a thing or two from Saudi Arabia. The transformation of the Saudi labor market since the start of Vision 2030 is truly nothing less than spectacular. The Kingdom has made so much progress in such a short time it is hard to choose,” said Littorin, who is also an international business and policymaking expert. 

He praised the significant increase in female workforce participation, noting that Saudi Arabia achieved a twofold rise in just six years, a feat that took Sweden 40 years to accomplish. 

“Roughly 35 percent of women in the workforce have leadership positions, and I saw an opinion poll recently that stated that over 75 percent of Saudi men saw this as very favorable to family life,” he added. 

Unprecedented progress 

The Kingdom’s labor market reforms align with Vision 2030 goals, as recent data from Saudi Arabia’s General Authority for Statistics shows the overall unemployment rate fell to 3.7 percent in the third quarter of 2024, a 0.5 percentage point drop from the previous year. 

Unemployment among Saudi nationals was 7.8 percent, while female participation reached 36.2 percent. 

Littorin emphasized the broader societal impact of these changes, saying: “As a foreigner, I have to say that it is so gratifying to see these women in the labor market, earning their own money, contributing to their families and to the growth of the country with their productivity, their grit, and ambition.” 

He added: “Saudi Arabia is a richer nation for it, where everyone is involved in the growth of the country.”

Saudi Arabia’s young workforce is another key driver of its economic transformation, Littorin noted. “The Gulf Cooperation Council region and Saudi Arabia, in particular, have a very young workforce. This is a great advantage compared with many other places around the world. A young workforce is versatile, agile, and finds it easier to learn new skills than others,” he said. 

The former minister also pointed to the Kingdom’s growing appeal to international investors and tourists. “When I first came to Riyadh in 2017, I was almost the only foreigner on every flight I took into the Kingdom. Now, these flights are filled with tourists and investors alike. The interest in Saudi Arabia has exploded,” Littorin said. 

A November report by BlackRock Investment Institute echoed this sentiment, predicting that Saudi Arabia’s future growth will be driven by its young population and abundant natural resources. However, the report cautioned that success will depend on governance, regulatory improvements, and labor market reforms. 

Sustainable growth 

Littorin stressed the importance of international cooperation to sustain this growth. He suggested partnerships between Saudi Arabia and countries like Sweden to enhance the Kingdom’s job market. 

“Saudi Arabia might want technological solutions in waste management from Sweden, for instance,” Littorin said. 

He added that the Saudi workforce is young and eager to learn from abroad, suggesting that joint venture solutions could foster mutual learning, with the possibility of exchanging workforces for a period to strengthen bonds between companies, economies, and countries. 

“Solutions like this would create larger markets for the companies involved, enhance job training for both Swedes and Saudis, broaden international exposure and contacts while increasing relevancy to both countries. The world is global, and so are its solutions,” Littorin added. 

Global platform 

The Global Labor Market Conference in Riyadh. AN

The second edition of the GLMC is taking place at the King Abdulaziz International Convention Center on Jan. 29-30, drawing over 5,000 attendees and 200 speakers, including ministers, CEOs, and experts from more than 50 countries. 

Littorin, a keynote speaker at the event, described the conference as a global platform for dialogue on future labor market trends. This year’s conference focuses on skills and productivity, exploring how education, skilling, upskilling, and reskilling can better meet tomorrow’s demands. 

“Solutions in economic policy, education policy, and labor market policy need to go hand in hand to support the transformation of our economies for the good of both people, companies, and countries,” he said. 

Littorin emphasized the need for upskilling and reskilling to adapt to the fast-evolving job market. “The long-term key to economic growth and prosperity is not only to find ways to create more jobs but to create better jobs; jobs that through higher productivity are more rewarding to the individual and contribute more to the economy,” he said. 

The former minister highlighted the role of advanced technologies like artificial intelligence in shaping global labor markets, particularly in the Middle East, emphasizing that “technology, digital transformation, and AI are key in so many aspects.” 

“Technology will enhance our ability to better understand where we are and where we are going. Digitalization will improve productivity not only in general terms but specifically in education and job matching,” Littorin said.


Oil Updates — prices ease on rising US inventories, Libyan output

Oil Updates — prices ease on rising US inventories, Libyan output
Updated 29 January 2025
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Oil Updates — prices ease on rising US inventories, Libyan output

Oil Updates — prices ease on rising US inventories, Libyan output

SINGAPORE/TOKYO: Oil prices slid on Wednesday, giving up some of last session’s gains, as an increase in US crude stockpiles and easing worries over Libyan supplies weighed on prices, although the decline was limited by potential US tariffs on Canadian and Mexican imports.

Brent crude futures fell 18 cents, or 0.2 percent, to $77.31 a barrel by 8:48 a.m. Saudi time, while US crude futures declined 15 cents, or 0.2 percent, at $73.62 a barrel.

“While markets are tackling demand side pressures, easing backdrop on supply side is equally weighing over oil prices,” said Priyanka Sachdeva, senior market analyst at Phillip Nova in Singapore.

“Markets are under pressure with Trump’s plans to boost US oil production and await further clarity on Trump’s energy policies.”

US President Donald Trump began his term last week issuing several executive orders to ease the permitting of energy infrastructure and boost already record-high oil and gas output.

US crude oil and gasoline stocks rose last week, while distillate inventories fell, market sources said on Tuesday, citing American Petroleum Institute figures.

The Energy Information Administration, the statistical arm of the US Department of Energy, is due to release its weekly data at 6:30 p.m. Saudi time on Wednesday.

The resolution of supply concerns in Libya has also added to selling pressure, said Chiyoki Chen, chief analyst at Sunward Trading in Tokyo.

Those fears eased after the state-run National Oil Corp. said on Tuesday export activity was running normally after it held talks with protesters demanding a halt of loadings at one its main oil ports.

The White House said on Tuesday that President Trump still plans to issue 25 percent tariffs on Canada and Mexico on Saturday.

It remains unclear how any new tariffs could affect oil imports to the US from the countries. Canada supplied 3.9 million barrels per day of oil to the US in 2023, roughly half of overall imports for the year, while Mexico supplied 733,000 bpd, according to data from the EIA.

Saudi Arabia’s energy minister and several of his OPEC+ counterparts have held talks following Trump’s call for lower oil prices and ahead of a meeting next week of OPEC+ oil-producing countries, according to official statements and sources.

Oil benchmarks fell to multi-week lows early this week as news of surging interest in Chinese startup DeepSeek’s low-cost artificial intelligence model prompted concerns over energy demand to power data centers, rattling the overall energy sector, while weak economic data from China further soured the demand outlook.

Technology stocks regained ground on Tuesday, a day after the DeepSeek rattled markets. 


Saudi Arabia’s property market set for growth with billions in new projects

Saudi Arabia’s property market set for growth with billions in new projects
Updated 29 January 2025
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Saudi Arabia’s property market set for growth with billions in new projects

Saudi Arabia’s property market set for growth with billions in new projects
  • The largest PIF projects in the Kingdom are in the Asir region
  • At least 50 percent of the country’s tourism is expected be centered in Riyadh

RIYADH: The Saudi real estate landscape is poised for substantial growth, as industry leaders, policymakers, and investors gathered at the Real Estate Future Forum in Riyadh to unveil major developments in property investment and tourism.

Highlighting the Kingdom’s ambitious Vision 2030 objectives, Asir Gov. Prince Turki bin Talal revealed the Public Investment Fund is spearheading nine major projects in the region, with four already launched and five in progress. “The largest PIF projects in the Kingdom are in the Asir region,” the governor said, emphasizing the region’s pivotal role in Saudi Arabia’s evolving property market.

The governor highlighted the region’s growing hospitality sector, with between 6,000 and 8,000 approved hotel rooms currently available. 

He also announced that Abha’s World Cup bid had been officially recognized as the best in the Kingdom by the Ministry of Sports. 

Meanwhile, Al-Ahsa Gov. Prince Saud bin Talal unveiled plans to expand the region’s hospitality offerings. “Our pipeline includes over seven or eight hotels and more than 25 rural lodges, including three five-star hotels: Hilton, Radisson Blu, and Hilton Garden Inn,” he said. Saudi Tourism Minister Ahmed Al-Khateeb noted the rapid expansion of the Kingdom’s hospitality industry, with hotel room capacity expected to grow from 475,000 to 675,000 by 2030. Al-Khateeb also discussed the impact of major infrastructure projects, such as the King Salman International Airport expansion and the launch of Riyadh Air, which are central to the Kingdom’s hyper-tourism strategy. 

He forecast that at least 50 percent of the country’s tourism will be centered in Riyadh, but emphasized efforts to keep the capital’s share from exceeding 80-90 percent. In the financial sector, Mohammed El-Kuwaiz, chairman of the Capital Market Authority, discussed the increasing role of real estate in the Kingdom’s investment market. 

“Around 20 percent of the 55 initial public offerings currently under review involve real estate companies,” he revealed. 

El-Kuwaiz emphasized the importance of financial stability and transparency for companies looking to list, advising them to treat investors as partners. 

In a significant move, he also announced that listed companies owning properties in Makkah and Madinah can now welcome foreign investors immediately.


SAMA permits full public launch of STC Bank in digitalization push

SAMA permits full public launch of STC Bank in digitalization push
Updated 28 January 2025
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SAMA permits full public launch of STC Bank in digitalization push

SAMA permits full public launch of STC Bank in digitalization push

RIYADH: The Saudi Central Bank, also known as SAMA, has authorized STC Bank to launch its full operations in Saudi Arabia.

As the first licensed digital bank in the Kingdom, STC Bank’s approval marks a significant step in SAMA’s ongoing strategy to accelerate digital transformation and enhance competitiveness in the banking sector.

At the same time, the move ensures the safeguarding of financial stability, according to a press statement from the central bank.

This milestone underscores the growing dynamism and potential of Saudi Arabia’s digital economy, while also highlighting SAMA’s efforts to create a regulatory framework that fosters innovation within the financial sector.

“SAMA is committed to strengthening the resilience of the banking sector, boosting its appeal, and increasing its role in achieving Saudi Vision 2030 and the Kingdom’s broader national objectives. This includes empowering entrepreneurs and financial institutions to deliver innovative financial services to the Saudi market,” the central bank said.

The approval follows a significant step taken in April 2024, when SAMA formally approved the transition of STC Pay — the mobile financial services arm of Saudi Telecom Co. — to STC Bank. Following a nine-month beta launch, STC Bank is now poised to begin its full banking operations.

Additionally, in December 2024, SAMA also gave the green light to D360 Bank, another digital financial institution, allowing it to begin its operations in the Kingdom.


Al-Habtoor Group halts investment plans in Lebanon amid growing instability

Al-Habtoor Group halts investment plans in Lebanon amid growing instability
Updated 28 January 2025
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Al-Habtoor Group halts investment plans in Lebanon amid growing instability

Al-Habtoor Group halts investment plans in Lebanon amid growing instability

DUBAI: UAE-based business conglomerate Al-Habtoor Group has abandoned its plans to reenter the Lebanese market, citing ongoing “unrest and instability” caused by armed militias.

In a statement issued on Tuesday, Khalaf Al-Habtoor, chairman of the group, explained that recent developments had deeply shaken his optimism.

“My team and I had been diligently preparing to launch new projects and expand existing investments in Lebanon, encouraged by promising signs such as the election of Gen. Joseph Aoun as president and the nomination of Nawaf Salam as prime minister. Both individuals embody integrity, credibility, and respect, instilling renewed hope among the Lebanese people — and investors like myself — for the country’s future,” the statement read.

However, he said that the continued dominance of armed militias, particularly what he described as “Shiite militias”, and the “absence of rule of law” have made it impossible for investors to proceed with confidence.

Tensions escalated with Hezbollah supporters holding rallies in Beirut, including in Christian-majority neighborhoods, further raising sectarian divisions. The protests followed the return of Shiite residents to southern Lebanon after a ceasefire between Israel and Hezbollah was recently extended.

In his statement, Al-Habtoor lamented the lack of decisive action from Lebanese authorities, including the army and the Ministry of Defense, in addressing these disturbances, noting that the situation was only worsening.

Unless the new government takes a firm stance against those working to destabilize the country, hopes for a “new Lebanon” will remain unfulfilled, he said.

Al-Habtoor clarified that the decision to pull out was made after careful analysis and close monitoring of the situation. As a result, neither he, his family, nor any group managers would be traveling to Lebanon.

Earlier this month, and following the wave of optimism that followed the election of President Aoun and Prime Minister Nawaf Salam, Al-Habtoor told Arab News in an interview that his group intended to move forward with plans to reopen its five-story mall in Beirut and relaunch the Habtoorland amusement park in Jamhour, contingent on Lebanon’s government delivering the promised security and stability measures.

The group, a multibillion-dollar global conglomerate, has diverse interests spanning luxury hotels, shopping malls, and more. As of January last year, its investments in Lebanon were estimated at around $1 billion.