Question

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

Answer 1

Saudi Government declared paying private sector employees 60 percent of their salaries during the three months of the pandemic's lockdown phase. This reduced cyclical unemployment to large extent and helped the firms continue work with their old workforce. This again saved the firms cost of retraining new people if they had to absorb them after the crisis was over. The government also negotiated with the employers to make the employees work for at least 40 percent of their working hours or grant them a leave which can be deducted from the number of holidays annually granted to them. This kept the workforce officially employed and did not affect gross demand drastically. Since the government subsidy was allotted, the firm has benefitted through the government. Therefore there should be no termination. Human Resource Development Fund allotted a huge sum to the private companies for hiring and training the nationals. So finally with the support from the Ministry layoffs were reduced and maintained stable prices in the economy or at least prevented them from falling too much.