Saudi jobless at 10 pct in 2010, eyes 5m jobs by 2030

Saudi Arabia's unemployment rate stood at 10 per cent in 2010, highlighting the need to create millions of jobs for nationals in the top oil exporter, the kingdom's labour minister said on Tuesday.

Despite being one of the world's richest countries, the Gulf Arab state has faced high unemployment as an outdated state school system focusing on religion and Arabic language produces graduates who struggle to find jobs at private firms.

Most Saudis work in the public sector but, in contrast to other Gulf oil producers such as Kuwait, not all citizens automatically get a job due to the rapidly rising population of nationals, which now stands at almost 19 million.

Companies in all sectors favour low-cost labour from Asia or well-paid foreign experts despite state efforts for many years to get more Saudis into private sector jobs. Some Saudis also refuse to do low-paid manual work.

Unemployment in the kingdom, which sits on more than a fifth of global oil reserves, climbed to about 10.5 per cent in 2009 from 8.2 per cent in 2000, sparking some protests.

"Ten per cent in 2010," Labour minister Adil Fakieh told reporters on the sidelines of a government-sponsored business conference when asked about the latest jobless figures.

Saudi Arabia does not regularly publish data on unemployment, a sensitive issue since it highlights fissures in wealth distribution in the absolute monarchy with no elected parliament, where newspapers tend to carry the official line.

"We need to create 5 million jobs for nationals by 2030," Fakieh said.

The retail, services and manufacturing sectors would grow and created the needed jobs as the government moves to diversify the economy away from oil, the minister said.

Officials who back reforms of the education and other sectors fear that jobless youth might join al Qaeda which waged a campaign inside the kingdom in 2003-2006. The Sept 11, 2001, plane attacks in the US were mainly carried out by Saudis.

In 1994, the government began a so-called "Saudization" plan, setting quotas for the number of nationals that private firms must hire, but the programme has had little success as less than 10 percent of private sector jobs were held by Saudis in 2009.

Almost 70 per cent of Saudis are the under the age of 30, with their ranks growing around 2.4 per cent annually.

Looking to create thousands of new jobs and diversify its oil-dominated economy, Saudi Arabia launched a $400 billion five-year spending plan in 2008, the largest stimulus relative to gross domestic product among the world's 20 leading nations.