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Impact of COVID-19 on Poverty in Saudi Arabia

Impact of COVID-19 on Poverty in Saudi Arabia
The impact of COVID-19 on poverty in Saudi Arabia is undeniable, especially when considering the growing unemployment rate. During the non-pandemic years, around 10%-20% of Saudi Arabians were in poverty and many of that number were women. However, Saudi Arabia’s government has not released specifics regarding poverty or homelessness.

COVID-19 in Saudi Arabia led to 8,591 deaths and 539,698 cases as of August 18, 2021. Additionally, the government administered approximately 32.8 million doses of the vaccine to Saudi Arabians. Saudi Arabia has a strict mask policy, requiring all people to wear a mask in all public places. Otherwise, unmasked individuals will receive a fine of 10,000 Saudi Riyals, which is almost $3,000.

Unemployment and Poverty in Saudi Arabia

The impact of COVID-19 on poverty in Saudi Arabia certainly begins with unemployment. The unemployment rate rose from 6.13% in 2019 to 8.22% in 2020 because of COVID-19. Most people in Saudi Arabia work in the oil and gas industry. Furthermore, the reduction of oil prices due to the pandemic caused the country’s economy to suffer and have significant layoffs. At the end of 2020, the unemployment rate in the gas and oil sector was 12.6%. However, it decreased to 11.7% at the beginning of 2021. The increase in layoffs made the job market more competitive. Unemployed men and women with no prior job experience must compete for jobs with people who have more work experience.

Furthermore, the pandemic severely affected women in the job market. Women are struggling because their main career areas are private-sector jobs such as retail and education. These types of jobs are core areas where the pandemic stay-at-home policies caused quite a shift. Additionally, half of the young Saudi women do not have employment and do not have education or formal training. COVID-19 is slowing the process for Saudi women to join the workforce. Closing schools and daycare made it difficult for women to work because someone needs to stay home with their children.

What is Saudi Arabia Doing to Help?

In 2016, the Saudi Arabian government created Vision 2030, a strategy to improve many aspects of the country by 2030. Tourism and women’s rights are examples of Vision 2030’s goals. However, the larger aim is to improve the overall life of people in Saudi Arabia. Concerning women and jobs, the goal is to encourage women to go to college and develop their talents. Saudi Arabia is making efforts for women to have more job security and improve their quality of life. In fact, from 2017 to 2020, the percentage of women in the workforce increased from 20% to 33%. Women having more job security and opportunities will make challenging events such as COVID-19 more manageable in the future.

According to the Vision 2030 plan, Saudia Arabia will address poverty. The plan also stated that “subsidies for fuel, food, water and electricity will be better utilized by redirecting them towards those in need.” The impact of COVID-19 on poverty in Saudi Arabia slowed down the progress of Vision 2030, but the strategy is still flourishing. Vision 2030 is important because it is building a stronger infrastructure for Saudi Arabia, especially for the poor and women.

– Shelby Tomassini
Photo: Flickr

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How Saudi Arabia’s Vision 2030 Plan Addresses Poverty

Saudi Arabia’s Vision 2030 plan addresses poverty
The Kingdom of Saudi Arabia has introduced an ambitious restructuring and development plan called Vision 2030. This plan was first released by Crown Prince Mohammad bin Salman and King Salman in April 2016. Saudi Arabia’s Vision 2030 plan addresses poverty by working to boost female participation in the workforce, reforming the health and education system and reducing the national unemployment rate.

The goals also include diversifying the Saudi economy, increasing life expectancy, achieving environmental sustainability and making Saudi Arabia a tourist-friendly destination, among others. These are five of the many ways that Saudi Arabia’s Vision 2030 plan addresses poverty.

How Saudi Arabia’s Vision 2030 Plan Addresses Poverty

  1. Empowering the Nonprofit Sector
    The best way that Saudi Arabia’s Vision 2030 plan addresses poverty is by setting up a regulatory framework that strengthens the nonprofit sector by offering government support and incentives for wealthy families to contribute, and increasing the number of government projects that generate a social impact. The kingdom currently has fewer than 1,000 nonprofits, which contribute only 0.3 percent of the national GDP. The goal is to increase the sector’s contribution to GDP from less than 1 percent to 5 percent, and to rally one million volunteers for this sector each year, compared to the current average of 11,000.
  2. Increasing Women’s Rights and Participation
    The kingdom’s Vision 2030 economic reform plan sets out a goal to increase female participation in the workforce from 22 percent to 30 percent. Additionally, as a part of the kingdom’s Vision 2030 plan, the Saudi government now funds the education of more than 35,000 Saudi women around the globe. New jobs for women have also been created in the government and in the military. Empowering women and allowing them to participate in the workforce can help them provide for their family and be self-sufficient, thus helping to fight poverty worldwide.
  3. Reforming Education
    The kingdom will be investing in childhood education by reforming the country’s academic and educational system. The government has also made numerous scholarships available that are aimed at Saudi students wanting to attend top international universities. To further develop local educational opportunities, Saudi Arabia also aims to have at least five universities ranked among the top 200 in the world by 2030. To do this, the government plans on preparing a modern curriculum with rigorous standards and tracking its progress and improvement throughout the years. Additionally, it plans to work with the private sector to ensure that students are prepared for the job market in each sector. This will help fight poverty by increasing the opportunities available to Saudi students worldwide.
  4. Investing in Small Business and Enterprise
    Small and medium-sized enterprises are essential to economic growth since they create jobs and promote financial independence. However, these enterprises currently account for only 20 percent of the national GDP, compared to up to 70 percent in more developed economies. In order to increase investment in small and medium-sized enterprises, the government has created the SME Authority to encourage entrepreneurship and help create easier access to funding and remove burdensome legal and administrative obstacles that are preventing their growth and creation.
  5. Investing in Saudi Arabia as a Tourist Destination
    In 2018, tourists visas will be issued for the first time ever in Saudi Arabia. Previously, tourist visas could only be acquired by Muslims going on the Hajj. Additionally, the government is investing in several luxury hotels and facilitating access to heritage sites. This part of Saudi Arabia’s Vision 2030 addresses poverty because it will create jobs and increase the amount of money circulating in the Saudi economy.

King Salman described his mission by saying, “My first objective is for our country to be a pioneering and successful global model of excellence, on all fronts, and I will work with you to achieve that.” Saudi Arabia’s Vision 2030 plans to accomplish this objective by alleviating poverty throughout the country.

– Luz Solano-Flórez
Photo: Flickr