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Saudi Arabia economy: Demographic profile

EIU ViewsWire. (Jul 25, 2011).

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Abstract (summary)
According to the 2010 census, the Saudi population reached 27.1m, an increase of 19.7% compared with the previous survey, in 2004. The increase in the Saudi population was attributable to rising numbers of both nationals and foreign workers--the number of

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Saudi Arabia economy: Demographic profile Demographic profile 2005 2010 Population (m) Total Male Female Age profile (% of total population) 0-14 15-64 65+ Young-age dependency ratio Old-age dependency ratio 38.4 38.0 59.3 59.5 2.3 2.4 37.8 59.6 2.6 0.64 0.04 23.2 27.1 12.8 14.7 10.4 12.4 31.8 17.0 14.8 2015

0.65 0.64 0.04 0.04

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Working-age population (m) Urbanisation (% of total) Labour force (m) Period averages Population growth (%) Working-age population growth (%) Labour force growth (%) Crude birth rate (per 1,000) Crude death rate (per 1,000) Infant mortality rate (per 1,000 live births) Life expectancy at birth (years) Male Female Average Sources: Saudi Arabian Monetary Agency; Ministry of Economy and Planning; UN World Population Prospects; Economist Intelligence Unit. Strong population growth will put pressure on infrastructure

13.8 16.2 80.5 81.7 6.1 7.3

18.9 82.8 9.2

2006-10 2011-15 3.15 3.24 3.6 29.4 2.6 18.0 3.19 3.21 4.6 27.8 2.4 15.1

71.5 75.3 75.0

72.6 76.7 74.6

According to the 2010 census, the Saudi population reached 27.1m, an increase of 19.7% compared with the previous survey, in 2004. The increase in the Saudi population was attributable to rising numbers of both nationals and foreign workers--the number of Saudi citizens rose from 16.5m to 18.7m, and the number of foreigners increased from 6.1m to 8.4m. The sharp, 38% increase in the number of foreigners living in Saudi Arabia between 2004 and 2010 highlights the continued overwhelming dependence of the private sector on foreign workers, owing to local skills shortages and to the fact that expatriate workers are usually cheaper and have fewer rights. This will outweigh the bureaucratic complications for both foreign and national companies in obtaining visas and ongoing government efforts to promote labour nationalisation. Government capital spending is set to increase sharply in the next few years--with, for example, the construction of 500,000 new homes--which means that inward migration and thus population growth will remain robust. This will add to pressure on infrastructure and services over the forecast period, an issue that will be compounded by high numbers of illegal immigrant workers who are present in the kingdom but excluded from official population data. Population growth is forecast to average 3.2% a year in 2011-15, marginally higher than in 2006-10, as inward migration offsets the impact of a slow and gradual decline in the national fertility rate. Most of the population is under 25 and around one-third is under 15. The proportion of the population that is of working age will gradually rise. This trend should help to underpin strong economic growth, although the extent to which it does so will depend on the success of efforts to improve productivity among nationals. Local unemployment stood at over 10% at the end of 2010, but could be far higher. The public sector has traditionally absorbed many of the new entrants to the labour force, at the cost of creating a hefty and inefficient bureaucracy, but the growth of publicsector employment is unlikely to exceed population growth over the forecast period. The government wants to encourage nationals to work in the private sector and aims to reduce the private sector's dependence on foreign labour through a system of quotas for Saudi workers (latterly

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branded "Saudiisation"). These quotas are often resented by businesses, which are sometimes forced to pay above-market rates for low-skilled and unmotivated local workers. The government is also investing in training--although this will take time to bear fruit and there are concerns about quality and market suitability. The population is forecast to rise to 31.8m in 2015 The Economist Intelligence Unit forecasts that the population will reach 31.8m in 2015. The proportion of expatriate workers is likely to rise slightly but should remain well under one-third of the population. The 2010 census reported that the number of expatriates was higher than had previously been officially estimated--a phenomenon that has been witnessed elsewhere in the Gulf Co-operation Council. The government had estimated that expatriates numbered under 7m, compared with the census figure of 8.4m. The heavy reliance on imported labour, together with the social and cultural factors that support the dominance of men in the private-sector workforce, creates a gender imbalance whereby Saudi women make up just over one-third of the population, with expatriate men making up nearly 30%. However, female participation in the workforce is growing strongly, as a result of a strong expansion in women's education as well as changing social norms and a rise in the cost of living. Women's employment in the private sector is starting from a very low base--according to the International Labour Organisation, just 17% of working-age women are in the labour force, compared with 50% in Qatar--and will not have a pronounced effect on overall labour force growth in 2011-15. However, the increasing availability of female graduates should help to address skills shortages and Saudiisation requirements in certain areas including banking and healthcare, increasing female employment levels. Official estimates suggest that 83.2% of the population will be urban by 2015, compared with 80.9% in 2003 and 58.4% in 1975. Population growth is particularly intense in the capital, Riyadh, and Jeddah and Dammam. The government will seek to alleviate population pressure on these cities by encouraging relocation to the new "economic cities" that have been designed to create jobs and spread the population more evenly across different regions. However, with the exception of the flagship King Abdullah Economic City on the Red Sea, these have made limited progress in attracting investment and are unlikely to make a substantial difference within the forecast period. (c) 2011 The Economist Intelligence Unit Ltd. All rights reserved. Reproduced with permission of the copyright owner. No further reproduction is permitted.

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Subjects: Locations: Identifiers / Keywords: Title: Publication title: Publication year: Publication Date: Year: Publisher: Place of Publication: Country of publication: Journal Subjects: Source type: Economic conditions, Economic indicators, News analysis Saudi Arabia, Middle East Economy , News analysis, Saudi Arabia , Middle East Saudi Arabia economy: Demographic profile EIU ViewsWire 2011 Jul 25, 2011 2011 The Economist Intelligence Unit New York United States Business And Economics, Political Science-International Relations Reports

Language of Publication: English

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