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Saudi government staff ‘can generate $5bn’

Jan 25, 2017 3:08 PM

The kingdom has long recognised that its most important and valuable national resource is not oil but its people. The government itself has around 4.2 million of these precious resources in the form of...

The kingdom has long recognised that its most important and valuable national resource is not oil but its people. The government itself has around 4.2 million of these precious resources in the form of government employees. Rather than reducing public sector employment (essentially cutting a valuable asset), an alternative would be to utilise these employees to generate income, the study by Oxford Strategic Consulting (OSC) said.

If only 10 per cent of the current 4.2 million government employees could generate, on average, $1,000 per month, then that would raise over $5 billion per annum. This would account for 9.47 per cent of the government’s projected fiscal deficit for 2017, said the report.

OSC recommends the following three steps to nurture the country’s human capital and generate additional revenue:

•    Promote the right type of entrepreneurship. Less than 10 per cent of entrepreneurs significantly contribute to growth, and most start-ups never hire more than one or two employees. In-house government incubators can help identify high potential entrepreneurs, known as gazelles. Oxford University Innovation, which is fully-owned subsidiary of the University of Oxford, performs a similar role by finding start-up funding and support for professors and students in return for a healthy portion of future profits. The Saudi Ministry of Labour, for example, could build a similar in-house incubator for employees.

•    Identify department expertise and build semi-commercial companies around key skills. Saudi government departments possess critical skills that transfer directly to commercial operations within the country. This creates various opportunities to transform departmental expertise into semi-commercial companies. For example, government employees could set up a finance company to manage expatriate remittances.

•    Leverage government employees to provide contract resources to the private sector. Rather than create new companies, the government can also subsidise contracts and second public employees for specific projects. This process represents a smoother transition than forcing Saudis into undesired private sector roles. Additionally, more nationals are likely to perform unpopular jobs if they are working for the government or a prestigious organisation within the country.

Saudi Arabia’s citizens possess the potential to raise significant revenues for the country at a time when new revenue streams are needed more than ever. Therefore, more discussion and research about maximising the potential of citizens is needed to help balance budgets and achieve strategic targets without negatively affecting the well-being and happiness of Saudi citizens, the research report said.  

Oxford Strategic Consulting is an Oxford and GCC-based research consultancy that specialises in building human capital across the GCC and Europe. – TradeArabia News Service

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