RIYADH — There are no plans to abolish the sponsorship system in Saudi Arabia, a high-level official at the Ministry of Labor has said. “There is no intention of canceling the sponsorship system,” the official said denying reports in business circles that the government was considering abolishing the system. “Abolishing the kafeel system for foreign manpower will create chaos in the labor market,” the ministry official was quoted by a local daily as saying. The source, who spoke on condition of anonymity, said the ministry had discussed three options for boosting the process of Saudization including unification of wages, canceling the sponsorship system and raising the costs of employing foreign manpower. “The ministry dismissed the first two ideas and adopted the third one,” he said. The official said increasing the costs of recruitment of foreigners will make the Saudi citizens more attractive to the private sector as they will be less costly than foreigners. “For this reason the ministry's choice went for increasing costs of employment of foreign manpower. This is a good choice which will enable the private sector achieve the Saudization targets,” he said. Labor Minister Adel Fakieh had earlier said the rise in the recruitment fees and labor license was the result of a study conducted jointly by the ministries of labor, interior and finance. Meanwhile Chairman of the Consumer Protection Society Dr. Nasser Al-Tuwaim said the decision to increase the labor fees has resulted in the deterioration of services especially in the field of cleanliness and the unjustified price hikes. He said charges of barbers, plumbers, electricians, wielders, car mechanics and other technicians have gone up by about 50 percent as a result of the decision to increase labor fees. Al-Tuwaim said consumers would be the victims of the decision because the merchants would increase their commodity prices to make it up for the fees they would pay for labor licenses of their foreign workers. The chairman of the committee of engineering offices at the Jeddah Chamber of Commerce and Industry Talal Samarqandi expected the annual labor fees to amount to SR19 billion and said it would be the consumers who would take the brunt as the merchants and businessmen would increase their commodity prices. “Prices have already gone up between 10-20 percent in the past few days,” Samarqandi said.
