Question

Saudi Government support for the private sector employees during COVID-19 pandemic has resulted in reduced layoffs”.  Discuss

Answer 1

Like most of the countries, Saudi also faced serious challenges due to the spread of the virus. But the government has been efficient in this time where many companies were going to losses and overall businesses were down, the government took many measures to stabilise the situation.

During the Covid pandemic, the Saudi government announced various support packages for private sector, these packages totaled up to almost $61 billion. They have allowed exemptions and postponement of some government dues. A $13.3 billion package was set up for supporting the banking and SME sectors. Many deadlines for taxes were extended. And SAMA announced about injecting $13.3 billion into banking sector, so that there might be liquidity in market and more credit facilities for private sectors can be offered.

Saudi government had announced to pay 60% of the salary of employees working in the private sector in Saudi for the period of three months coming in certain conditions. The government also gives benefits to the employees by its 'Ajeer' portal and by this they can temporarily protect the employees from being terminated or losing contractual benefits.

The human resource development fund allocated SAR 5.3 billion as to support the private sectors of the country. Thus the Saudi government is spending a significant amount from its cash reserves to protect the citizens and employees from a severe financial crisis. It was decided by the government that no employee's salary would be reduced to more than 40% of their original salary. Thus the Government took many steps for sustaining employees and maintaining liquidity in the market and that leaded to reduced employee layoffs during this period.