FACULTY OF BUSINESS, HOSPITALITY,

ACCOUNTING, AND FINANCE

ASSIGNMENT BRIEF

Programme Name Diploma in Business Administration/ Diploma in Marketing

Course Code BECO1233
Course Name Macroeconomics
Session/Semester MARCH 2023
Course Leader
Eliza Kori Assessment Type Group Assignment
Name
Internal Verifier Dean / Head of
Mazlina Muhammad Dr Syriac
Name School Name
Student Name 1.Ahmad Syahiran bin Student ID 1.DBAF22086485
Mohd Hairiyzal 2.DBAF22086498
2.Muhammad Nabil bin 3.DBAF22086011
Shahrulkama 4.DBAF22086413
3.Mohamad Aiman bin 5.DBAF22086465
Abdul Latif
4. Muhammad Haziq
Haiqal bin Khairulazri
5.Muhamad Ammar bin
Ali

I hereby certify that this assignment is my own work and where materials have been
used from other resources, they have been properly acknowledged. I also understand
Student’s I will face the possibility of failing the module if the content of this assignment is
declaration plagiarized.

Signed: Ahmad Syahiran Date: 25/5/2023

Feedback/Feedforward given by Lecturer Feedback received by Student:

(Feedback to be provided within 2 weeks of deadline) Comments by student:

1
 Date:25/5/23

Signature:
Ahmad
Syahiran

2
TABLE OF CONTENT Page

INTRODUCTION 4
ANALYSIS ON UNEMPLOYMENT RATE IN ARAB SAUDI 5 – 15
EFFECTS OF UNEMPLOYMENT TO THE COUNTRY 16
ACTIONS TAKEN BY THE GOVERMENT TO CONTROLTHE ISSUE 17
CONCLUSION 18

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 UNEMPLOYMENT ISSUE IN A COUNTRY, SAUDI ARABIA

Introduction
ON THE ARABIAN PENINSULA, THERE IS A NATION CALLED SAUDI ARABIA. WITH A TOTAL AREA
OF OVER 2.15 MILLION SQUARE KILOMETRES, IT IS THE LARGEST NATION IN THE AREA. OVER 34
MILLION PEOPLE LIVE IN THE NATION, WITH URBAN AREAS HOUSING THE VAST BULK OF THEM.
THE MASSIVE OIL RESERVES OF SAUDI ARABIA ARE WELL-KNOWN AND HAVE CONTRIBUTED
SIGNIFICANTLY TO THE NATION'S ECONOMIC GROWTH. MECCA AND MEDINA, TWO OF ISLAM'S
HOLIEST SITES, ARE LOCATED IN THE NATION AND DRAW MILLIONS OF PILGRIMS EVERY YEAR
FROM ALL OVER THE WORLD. SAUDI ARABIA HAS EXPERIENCED SUBSTANTIAL SOCIAL AND
ECONOMIC REFORMS IN RECENT YEARS, NOTABLY THE EXECUTION OF VISION 2030, A STRATEGY
INTENDED TO DIVERSIFY THE ECONOMY AND LESSEN THE NATION'S RELIANCE ON OIL.

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YEARS TOTAL UNEMPLOYED INCREASE/DECREASE
2007 5.73% DECREASE 0.52% FROM 2006

2008 5.08% DECREASE 0.65% FROM 2007

2009 5.38% INCREASE 0.3% FROM 2008

2010 5.55% INCREASE 0.17% FROM 2009

2011 5.77% INCREASE 0.22% FROM 2010

2012 5.52% DECREASE 0.25% FROM 2011

2013 5.57% INCREASE 0.05% FROM 2012

2014 5.72% INCREASE 0.15% FROM 2013

2015 5.59% DECREASE 0.13% FROM 2014

2016 5.65% INCREASE 0.06% FROM 2015

2017 5.89% INCREASE 0.24% FROM 2016

2018 6.04% INCREASE 0.15% FROM 2017

2019 5.67% DECREASE 0.37% FROM 2018

2020 7.45% INCREASE 1.78% FROM 2019

2021 7.36% DECREASE 0.09% FROM 2020

SCHEDULE UNEMPLOYMENT RATE IN ARAB SAUDI 2007-2021

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 YEARS TOTAL UNEMPLOYED INCREASE/DECREASE

2007 5.73% DECREASE 0.52% FROM 2006

2008 5.08% DECREASE 0.65% FROM 2007

2009 5.38% INCREASE 0.3% FROM 2008

2010 5.55% INCREASE 0.17 FROM 2009

2011 5.77% INCREASE 0.22% FROM 2010

2007 - 2011

2008-2009
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THE SAUDI ECONOMY HAS BEEN IN A RELATIVELY GOOD SHAPE OVER THE LAST
TWO YEARS AS A RESULT OF HIGH OIL PRICES AND RISING GOVERNMENT
SPENDING.WITH A STRONG ECONOMY, THE GOVERNMENT IS ABLE TO INVEST IN
VARIOUS SECTORS SUCH AS EDUCATION, INFRASTRUCTURE AND HEALTHCARE TO
HELP AND STIMULATE ECONOMIC GROWTH, THUS EXPANDING EMPLOYMENT
OPPORTUNITIES TO THE LOCALS.

EDUCATION
ESTABLISHMENT OF THE KING ABDULLAH'S SCIENCE AND TECHNOLOGY
UNIVERSITY (KAUST)
The founding of KAUST, a top-tier research university in Thuwal, Arab Saudi,
resulted in the hiring of numerous new professors and university employees,
which helped to lower the unemployment rate in the region.

INFRASTRUCTURE
1)MAKKAH AND MEDINA ROADS
makkah and madina roads: The project involves the development of a 450km road
linking the holy cities of Makkah and medina
2)KING FAHD BRIDGE

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2009-2011
FROM 2009 TO 2011, SAUDI ARABIA'S UNEMPLOYMENT RATE ROSE THREE YEARS
IN A ROW.AMONG THE FACTORS CONTRIBUTING TO THAT YEAR'S RISE IN
UNEMPLOYMENT WERE.

GLOBAL FINANCIAL CRISIS

SAUDI ARABIA'S ECONOMY WAS SIGNIFICANTLY IMPACTED BY THE GLOBAL
FINANCIAL CRISIS OF 2008.THE FINANCIAL CRISIS CAUSED THE ECONOMY TO
EXPAND MORE SLOWLY AND REDUCED GOVERNMENT REVENUE, WHICH IN TURN
REDUCED EMPLOYMENT POSSIBILITIES AND RAISED UNEMPLOYMENT.

DEMOGRAPHIC FACTORS
THE EDUCATION SYSTEM IN SAUDI ARABIA IS UNABLE TO KEEP UP WITH THE
DEMAND FOR SKILLED WORKERS DUE TO THE COUNTRY'S HUGE YOUTH
POPULATION AND THE ENORMOUS NUMBER OF YOUNG PEOPLE WHO ENTER THE
WORKFORCE EACH YEAR. THIS CAUSES A SKILLS GAP BETWEEN THE COUNTRY'S
LABOUR FORCE AND THE DEMANDS OF THE LABOUR MARKET.

RELIANCE ON FOREIGN LABOUR

IN THE LABOR SECTOR SAUDI ARABIA HIRES A LOT OF FOREIGN WORKERS
RESULTING IN LOCAL PEOPLE HAVING TO COMPETE FOR JOBS.

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2012 – 2016

YEARS TOTAL UNEMPLOYED INCREASE/DECREASE

DECREASE 0.25% FROM

2012 5.52% 2011

INCREASE 0.05% FROM

2013 5.57% 2012

INCREASE 0.15% FROM

2014 5.72% 2013

DECREASE 0.13% FROM

2015 5.59% 2014

INCREASE 0.06% FROM

2016 5.65% 2015

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2012 – 2016

AS PER THE TABLE WE SEE, THE UNEMPLOYMENT RATE IN THE 5 YEARS IS NOT
FIXED. THIS IS BECAUSE THE ECONOMY IN SAUDI ARABIA IS VOLATILE, IT AFFECTS
THE UNEMPLOYMENT RATE.IN 2012 WE CAN SEE THE UNEMPLOYMENT RATE
DROP.AMONG THE CAUSES ARE DIVERSIFY ECONOMIC ACTIVITIES IN VARIOUS
SECTORS SUCH AS:

OIL AND GAS SECTOR

THIS POSITIVE ORGANIZATION IS DUE TO THE HIGH LEVEL IN THE PRIVATE SECTOR
OF OIL AND GAS.AS MUCH AS 9.0% OF THE DEMAND FROM FOREIGN COUNTRIES
TO EXPORT OIL TO OTHER COUNTRIES.DUE TO THIS, OIL COMPANIES SUCH AS
SAUDI ARAMCO ARE FORCED TO HIRE MORE WORKERS TO ENSURE THAT THE
PROCESS OF EXPORTING OIL RUNS SMOOTHLY.

MANUFACTURE SECTOR
SUCH AS THE DEVELOPMENT OF THE AUTOMOTIVE INDUSTRY, THE
PHARMACEUTICAL INDUSTRY AND THE FOOD AND BEVERAGE INDUSTRY.AMONG
THE EXAMPLES OF ALMARAI IS THE BEVERAGE INDUSTRY THAT RUNS THE
LARGEST MILK COMPANY IN SAUDI ARABIA.

AGRICULTURAL SECTOR
MODERN AGRICULTURE'S PROGRESS, THE ADVANCEMENT OF AGRICULTURAL
TECHNOLOGY, AND THE GROWTH OF THE AGRICULTURAL MARKET.ADDITIONALLY,
THE AGRICULTURE SECTOR'S EXPANSION HAS THE POTENTIAL TO PROVIDE NEW
EMPLOYMENT.

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CAUSES OF THE INCREASE IN UNEMPLOYMENT RATES IN 2013,
2014, AND 2016:

WE CAN SEE, IN 2013, 2014 AND 2016 THE UNEMPLOYMENT RATE INCREASED
SLIGHTLY BY SEVERAL PERCENT DUE TO VARIOUS CHANGING AND UNCERTAIN
ECONOMIC AND SOCIAL FACTORS SUCH AS THE SLOWDOWN IN THE GROWTH OF
THE OIL AND GAS SECTOR AND THE RAPID RISE IN POPULATION GROWTH.IN THE
GAS AND OIL SECTORS, THE REASON FOR THE SLOWDOWN OF THE SECTOR IS THE
VOLATILE OIL PRICES AND THE COMPETITION IN THE WORLD OIL MARKET IS
TIGHTENING.

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 YEARS TOTAL UNEMPLOYED INCREASE/DECREASE

2017 5.89% INCREASE 0.24% FROM

2016

2018 6.04% INCREASE 0.15 FROM 2017

2019 5.67% DECREASE 0.37% FROM

2018

2020 7.45% INCREASE 1.78% FROM

2019

2021 7.36% DECREASE 0.09% FROM

2020

2017 - 2021

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2017 – 2018
THE RATE OF UNEMPLOYMENT HAS INCREASED THIS IS
BECAUSE

THE DROP IN GLOBAL OIL

SAUDI ARABIA IS PARTICULARLY IMPACTED BY THIS DROP BECAUSE THE NATION
SIGNIFICANTLY DEPENDS ON OIL EARNINGS TO FUND SOCIAL PROGRAMMES AND
INFRASTRUCTURE IMPROVEMENTS.SAUDI ARABIA IS ATTEMPTING TO BOOST THE
PRIVATE SECTOR WHILE REDUCING ITS RELIANCE ON THE OIL INDUSTRY.BUT IT
WILL TAKE A WHILE FOR THIS ADJUSTMENT TO OCCUR.

GLOBAL ECONOMIC SLOWDOWN

THE ECONOMY IN SAUDI ARABIA WAS ALSO IMPACTED BY THE DOWNTURN IN
THE GLOBAL ECONOMY BROUGHT ON BY POLITICAL ISSUES IN A NUMBER OF
SIGNIFICANT NATIONS.ONE OF THE KEY ISSUES IS THE CONTENTIOUS TRADE
POLICY ADOPTED BY THE TRUMP ADMINISTRATION, WHICH IS ONE OF THE
NATIONS THE COMPANY HAS AMARIKA IN.HIGH IMPORT TAXES ON SOME
NATIONS, LIKE CHINA, ARE A PART OF THIS APPROACH AND THEY CAUSE TRADE
TENSIONS AROUND THE WORLD.

2019
in 2019, the unemployment rate fell by 0.37%. This is due to the government's
efforts to slightly lower the unemployment rate during the year.
ECONOMIC REFORM VISION 2030: WITH THIS PROGRAM THAT HAS BEEN
IMPLEMENTED BY THE GOVERNMENT OF SAUDI ARABIA AIMED AT REDUCING THE
DEPENDENCE OF THE OIL SECTOR AND INCREASING THE PRIVATE SECTOR AND

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TOURISM.THIS PROGRAM HAS TRIGGERED AND DOMESTIC SIGNIFICANT AND CAN
ULTIMATELY CREATE SIGNIFICANT JOB OPPORTUNITIES.

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2020-2021
WHEN THE NEW VIRUS COVID-19 ARRIVED IN SAUDI ARABIA AT THE END OF 2019
AND STARTED TO SPREAD THERE IN EARLY 2020, IT WAS A CRUCIAL ECONOMIC
YEAR FOR THE KINGDOM.THROUGH THE ADVENT OF FOREIGNERS WHO HAD
CARRIED THE VIRUS INTO THE NATION AND SPREAD IT TO LOCALS, THE COVID-19
EPIDEMIC STARTED IN CHINA AND STARTED TO SPREAD THROUGHOUT THE
WORLD.THE PRIMARY REASON FOR THE INCREASE IN SAUDI ARABIA'S
UNEMPLOYMENT RATE IS THE SPREAD OF THE COVID-19 VIRUS.DESPITE THE
SAUDI GOVERNMENT'S EXTENSIVE EFFORTS, THE VIRUS HAS HAD A SUBSTANTIAL
IMPACT ON BOTH COMPANIES AND EMPLOYEES.

1.MOVEMENT RESTRICTIONS
THE MOVEMENT RESTRICTIONS THAT WERE PUT IN PLACE BY THE SAUDI
GOVERNMENT ON MARCH 9, 2020 MADE IT DIFFICULT FOR THE SAUDI
POPULATION TO GO OUT TO BUY DAILY NECESSITIES.THE RESTRICTIONS ON
MOVEMENT RESTRICTED ONLY 1 REPRESENTATIVE FROM FAMILY MEMBERS TO BE
ALLOWED TO LEAVE.MANY COMPANIES WERE FORCED TO CLOSE BECAUSE THEY
COULD NOT AFFORD TO SWALLOW HUGE LOSSES AND CAUSED MANY WORKERS
TO BE LAID OFF.

IN TERMS OF TOURISM
EARLY IN 2020, SAUDI ARABIA WAS FORCED TO HALT THE ENTRY OF FOREIGN
PILGRIMS TO THE CITIES OF MECCA AND MEDINA. IN ADDITION, THE SAUDI
GOVERNMENT WAS COMPELLED TO HALT THE ENTRY OF FOREIGN TOURISTS IN
MARCH 2020. THESE DECISIONS COULD HAVE A SIGNIFICANT IMPACT ON THE
SAUDI TOURISM SECTOR. TRAVEL AGENCY WAS ALSO FIRED.

IN TERMS OF FLIGHT
SAUDI ARABIAN AIRLINES, WHICH EMPLOYS APPROXIMATELY 22% OF ITS
WORKFORCE, SAID IN APRIL 2020 THAT IT WILL BE LAYING OFF 10 000 OF ITS
WORKERS.

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IN SAUDI ARABIA, UNEMPLOYMENT CAN HAVE A BIG IMPACT
ON PEOPLE'S LIVES AND THE NATION'S ECONOMY. HERE ARE
SOME POSSIBLE OUTCOMES:
1. ECONOMIC IMPACT: BECAUSE FEWER INDIVIDUALS ARE SPENDING MONEY
AND PAYING TAXES, UNEMPLOYMENT CAN SLOW ECONOMIC GROWTH.
THE NATION'S OVERALL GDP MAY DECLINE AS A RESULT OF THIS.
2. SOCIAL AND PSYCHOLOGICAL IMPACT: PEOPLE WHO ARE JOBLESS MAY
EXPERIENCE MENTAL HEALTH ISSUES. THIS CAN RESULT IN LONELINESS,
ANXIETY, AND DESPAIR, WHICH CAN SPREAD TO FAMILIES
AND COMMUNITIES.
3. INCREASED GOVERNMENT SPENDING: TO SUPPORT THOSE WHO ARE
JOBLESS, THE GOVERNMENT MAY NEED TO SPEND MORE ON SOCIAL
WELFARE PROGRAMMES AS THE NUMBER OF UNEMPLOYED PEOPLE RISES.
THE BUDGET OF THE GOVERNMENT MAY BE STRAINED AS A RESULT.

IN RECENT YEARS, THE SAUDI ARABIAN GOVERNMENT HAS

INTRODUCED A NUMBER OF PROGRAMMES TO COMBAT
UNEMPLOYMENT, SUCH AS VISION 2030, WHICH INTENDS
TO DIVERSIFY THE ECONOMY AND PRODUCE NEW JOBS IN
INDUSTRIES INCLUDING TOURISM, ENTERTAINMENT, AND
TECHNOLOGY. HOWEVER, THE NATION STILL HAS
PROBLEMS BRINGING DOWN ITS JOBLESS RATES,
ESPECIALLY AMONG YOUNG PEOPLE AND WOMEN.

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Actions taken by the government to control the issue of
unemployed in Saudi Arabia

Getting Out of the Oil

Saudi Arabia has already made a considerable move away from the oil
industry, particularly in the leisure sector. Following the recent lifting of
the theatre prohibition, AMC Theatres announced a proposal to build
40 theatres across 15 locations in Saudi Arabia during the next five
years, and a total of 100 theatres by 2030.
The Saudi government wants to encourage wealthier citizens to spend
money by launching leisure-focused enterprises while also creating jobs
for the underprivileged residents of the nation. It is so that the less
fortunate people of the country can get benefits and enough income for
their living needs. The government always prioritizes people who are
unemployed over those who are already employed.

Incentivize Employment of Citizens

The percentage of foreign employees hired by private enterprises is a
significant factor determining unemployment in Saudi Arabia. 80
percent of the workforce is made up of foreigners, most of whom are
migrants from nearby nations who are ready to work for wages lower
than those demanded by Saudi Arabian locals.
The ambitious Vision 2030 reform plan, among others, by the Saudi
Arabian government, states that the nation will invest in its citizens'
education to better prepare them for the workforce. The kingdom has

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suggested severe nationalisation quotas for the private sector, which
would oblige companies to employ considerably more citizens.
By the end of the next decade, Saudi Arabia hopes to increase the GDP
generated by small businesses from 20% to 35% while lowering the
unemployment rate to 7% by investing in private enterprises and
encouraging those enterprises to prioritise hiring Saudi nationals.

Social Reform
Beyond the humanitarian advantages of allowing women in Saudi
Arabia numerous rights that were previously kept from them, this
significant social reform has the potential to strengthen the economy by
introducing a new group of workers and customers.
Given that women make up nearly half of Saudi Arabia's population,
allowing more women to enter the workforce will enable lower-class
households to supplement their income and help meet demand if
nationalisation quotas for small firms are put in place.
The Saudi government anticipates that social and economic change will
occur in cycles, with formerly disadvantaged people joining the
workforce and contributing to economic growth. Consequently, new
firms will emerge that will require additional employees.

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CONCLUSION

THE LEVEL OF UNEMPLOYMENT IN SAUDI ARABIA HAS BEEN DECREASING FOR A

LONG TIME. ACCORDING TO DATA, SAUDI ARABIA'S UNEMPLOYMENT RATE WILL
BE 7.36 PERCENT IN 2021. THIS IS A SLIGHT DECREASE COMPARED TO 2020
WHICH WAS 7.45 PERCENT BUT THIS IS STILL A SIGNIFICANT CHALLENGE FOR THE
COUNTRY. ONE POSSIBLE CONCLUSION IS THAT THE COVID-19 PANDEMIC HAS
HAD A MAJOR IMPACT ON THE ECONOMY OF SAUDI ARABIA, LEADING TO JOB
LOSSES AND REDUCED ECONOMIC ACTIVITY. ANOTHER POSSIBLE FACTOR IS THE
COUNTRY'S DEPENDENCE ON THE OIL INDUSTRY, WHICH HAS BEEN AFFECTED BY
GLOBAL OIL PRICE FLUCTUATIONS. TO ADDRESS THIS ISSUE, THE GOVERNMENT
OF SAUDI ARABIA NEEDS TO CREATE JOB OPPORTUNITIES AND SUPPORT
ECONOMIC GROWTH.

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References
1 https://www.macrotrends.net/countries/SAU/saudi-
arabia/unemployment-rate
2 https://www.ceicdata.com/en/indicator/saudi-
arabia/unemployment-rate
3 https://www.britannica.com/place/Saudi-Arabia
4 https://borgenproject.org/how-saudi-arabia-plans-
to-tackle-unemployment/
5 https://archives.palarch.nl/index.php/jae/article/
download/8264/7715/16192#:~:text=In%20general
%2C%20unemployment%20is%20the,to%20an
%20increase%20in%20poverty.

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