Question

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

Students are required to reply to at least two peer responses to this week’s discussion question. Your replies need to be substantial and constructive in nature.  

Answer 1

A ministerial decision in Saudi Arabia is set to allow private sector companies to cut salaries by up to 40 percent with the possibility of terminating contracts given the difficult economic circumstances surrounding the coronavirus pandemic, pan-Arab daily Asharq al-Awsat reported.

Like most parts of the world, Saudi Arabia is facing a serious challenge caused by the spread of COVID-19. As of May 4, the Saudi government has 27,011 confirmed coronavirus cases and 184 deaths. While the pandemic has impacted public health, politics, and the economy, it is the national labor market that is facing one of the most severe challenges.

Essentially, the Saudi government is currently, only, supporting citizens working in the private sector. As for those who are working for the government, they will keep full salaries while they are either working from home—if it is deemed necessary—or on paid leave. Clearly, the government is the employer of those who work for the public sector. Thus, the government acts not merely as a government, but also as the employer who takes responsibility for its employees who are facing the force majeure. Additionally, the social security system in Saudi Arabia is divided into two systems: the public pension for those working for the government and the General Organization for Social Insurance for those working in the private sector. Each system has its own rules of savings and benefits. Consequently, the actions of the government are different based on its role as governor or employer.