Expat fees and tough personal decision
THIS is the story of Bakhsh, a Pakistani farmer who is employed in a Madinah farm, as told in the front page of a local daily last week. Bakhsh, his brothers and sons, who have lived in the Kingdom for 35 years or more, are now faced with the prospects of making their toughest decision in their life — leaving the Kingdom. The reason being the recent levy of dependent fees, which they cannot afford to pay, as they work as farmers with meager salaries.
Expatriates now have to pay SR100 from this July per dependent per month. In addition, there is another fee to be instituted in January 2018, when companies in which expats outnumber Saudis will have to pay SR400 every month for each expat worker, pay SR300 for each expat worker when the numbers of expats employed by them equal the number of nationals in the firm. The fees will then exponentially increase annually with the monthly fees on expats for each of their dependents rising to SR200.
The fees on expats outnumbering the Saudis will be increased to SR600 per month from January 2019 while firms with equal number of expats and nationals will need to pay SR500. The fees on dependents will be hiked to SR300 per dependent per month the next year. At the start of 2020, the fees for expatriates outnumbering Saudis will be increased to SR800 monthly and to SR700 for expatriates who are in equal number to Saudi workers in a company. The monthly fees on the dependents will be raised to SR400 per head from mid 2020.
The yearly slab of levies have got many expatriates thinking of leaving — some voluntarily while some forced. Bakhsh was born in the Kingdom and has lived all his life in Saudi Arabia. He has 12 sons and after calculating the first year expat fee, he realized he would have to pay SR14,000. With the amount doubling the next year and, increasing exponentially annually, he feels he would not be able to afford paying the amount. He has finally decided to go back to a country that he had never visited in his life.
There are bound to be many such Bakhshs in the expatriate community, who are faced with the dilemma to pay and stay with their families or take a decision to call it quits with their family. It is those who have been in the Kingdom for decades are the ones facing a wrenching time. For it may not be difficult to take a call for those who have been working and living in Saudi Arabia for less than ten years, as the attachment to the Kingdom is not as strong as for those who were born here and lived for more than 40 years.
Like Bakhsh, they too will have to make a call — either face the tough decision of paying the fees and work in multiple jobs, which is a burden for low-income expats, or go back to a country, by virtue of their passports, that they have visited occasionally or never seen in their lives and be strangers in their own countries. The decision becomes tougher with the fear that they would not be able to rebuild a life where parameters are different and unknown. That’s why many have suddenly woken up to the fact that there’s a need to understand the local laws and requirements of their native lands, such that it would enable them to fit in, if the need arises for them to leave the Kingdom.
Some expats, however, are implementing or have implemented their plan-B that includes sending their wives and children back home, risking separation and the social issues that come with it. This means most of the money spent in the Kingdom will now take flight outside in the form of remittances. Expats living with their families in an apartment will live together as forced bachelors leaving many vacant apartments, which will lead to prices going down, and a possible fall of revenue for the Saudi owner. The knock-on effect will also be on shops, malls, hotels, which could witness a fall in revenues too.
Some Saudis are seeing that the levying of expat fees as a perfect opportunity to put an end to unemployment problems, especially with expats leaving their jobs and the Kingdom. They expect Saudis to fill the positions that the expats vacate. Those who are in favor of the fees are betting on Saudis filling these jobs as the market would open up with opportunities and become lucrative for nationals once many of the low-paid expats leave.
So instead of, lets say for example, five laundries or barber shops in one street, it would be limited to one with a Saudi operating it and getting the bigger share of the market. They also claim the population, with the numbers leaving, would go down, and with it the overcrowding problem, pollution and crime rates. It will also bring all prices down.
On the other hand, businesses owned by Saudis that depend on expat labor will cry first when expats decide to leave. To overcome this, they will increase their prices and force the consumer to pay the fees indirectly. Expats have also been contributing to the local economy directly as they are a buying power. This power will drop sharply and the only ones to suffer are businesses in all sectors. Prices of rent will go down sharply because supply is more than demand, yet the Saudi owners would be the ones to cry first, when this happens, or is bound to happen.
The possible problem was succinctly put in a comment in a local paper. I would have considered it a funny comment on this issue, if not for the fact that it reveals another side to the issue. The comment was about a Saudi man who owns a herd of camels and who is in need of a shepherd if and when his expat worker decides to leave. He was wondering how many Saudis would apply for such a job and stay in the rural area in tough conditions with the camels. He was asking if he could not find anyone, would he be allowed to recruit again, and which expat would come then?
As for expats who have lived here for a long period of time, the quicker they adapt to the new situation the easier it will be for them if they decide to go back. It is very sad for me to see many of my friends who I have worked with and known leaving for home, putting an end to their professional life in Saudi Arabia. But as everything in life, a choice has to be made, however, tough.
I will sign off here by sharing a thought that I have published in a previous article saying, “To all expats we thank them, we thank the teacher who taught us and the doctor who cured us and simple workers — electrician, plumber, mechanic, carpenter and so on — who provided us with services. We thank the engineers who helped us build our projects and roads. We thank the expat neighbor and co-worker who together shared with us the good times and bad times. Your services and love will forever be appreciated and cherished.”- Courtsey Saudi Gazette– Mahmoud Ahmad is a well-known writer, columnist and managing editor of Saudi Gazette)