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Implementing a Job 
Guarantee Program in 
Saudi Arabia 
Fadhel Kaboub 
Denison University & Binzagr Institute for 
Sustain...
Costs of Unemployment in KSA 
• KSA can increase annual GDP growth by 
2.3% if youth employment-to-population 
ratio incre...
Other Costs of Unemployment 
• Social costs, poverty, crime, divorce, 
family/social fabric breakdown 
• Health costs (phy...
What is Financial Sovereignty? 
• A financially sovereign government is a government that: 
– issues its own currency, 
– ...
Accounting Identity 
Gov. budget balance + 
Private sector balance + 
Foreign sector balance 
= 0 
This is always true in ...
KSA Sectoral 
Balances
KSA Sectoral 
Balances
KSA Private Sector Surplus 
KSA Sectoral 
Balances
KSA Trade Surplus 
KSA Private Sector Surplus 
KSA Sectoral 
Balances
KSA Accounting Identity in 2012 
Gov. balance (13.27%) + 
Private balance (18.27%) + 
Foreign sector (-31.96) 
= 0
Job Guarantee 
• Take workers as they are 
• Jobs first, training later 
• On the job training 
• These are neither tradit...
Social Venture Partnerships 
• Venture Capital Model applied to address 
community needs 
• Venture Philanthropy: Gives “$...
Community-driven Job Guarantee 
• Local community groups identify their needs 
• They identify the existing skills of the ...
How does it affect the private 
sector? 
• Community service jobs do not compete 
with private sector production; they 
co...
Rethinking “public works” 
• Focus on civic engagement and local 
community development 
• Community capital 
• Enriching ...
How much does it cost? 
• 1 million workers 
• JG wage: 3,500 SAR/month 
• Benefits (+15% benefits) 
• Material cost: 3 bi...
Concluding Remarks 
• The current unemployment situation calls 
for urgent and bold actions 
• The traditional employment ...
Thank you. 
______________________ 
Implementing a Job Guarantee Program 
in Saudi Arabia 
______________________ 
Fadhel ...
Implementing a Job Guarantee Program in Saudi Arabia
Implementing a Job Guarantee Program in Saudi Arabia
Implementing a Job Guarantee Program in Saudi Arabia
Implementing a Job Guarantee Program in Saudi Arabia
Implementing a Job Guarantee Program in Saudi Arabia
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Implementing a Job Guarantee Program in Saudi Arabia

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Roundtable on Post Keynesian Approaches to MENA Economics session at 12th International Conference

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Implementing a Job Guarantee Program in Saudi Arabia

  1. 1. Implementing a Job Guarantee Program in Saudi Arabia Fadhel Kaboub Denison University & Binzagr Institute for Sustainable Prosperity Post Keynesian Conference (September 26, 2014) Kansas City, MO
  2. 2. Costs of Unemployment in KSA • KSA can increase annual GDP growth by 2.3% if youth employment-to-population ratio increases to Australia’s level (ILO). • KSA can grow at 8-9% annually if women’s labor force participation is the same as men’s (Nasser Saidi & Associates). • The longer a person is unemployed, the harder it gets to find a job.
  3. 3. Other Costs of Unemployment • Social costs, poverty, crime, divorce, family/social fabric breakdown • Health costs (physical and psychological) • Deterioration of skills with long-term unemployment
  4. 4. What is Financial Sovereignty? • A financially sovereign government is a government that: – issues its own currency, – collects taxes/fees in its own currency, and – only issues bonds denominated in its own currency – adopts a flexible exchange rate policy • Financially sovereign countries include: US, UK, Canada, Japan, and Australia  Currency Issuers • Currency users are not financially sovereign: examples, private sector firms, households, and governments who borrow foreign currencies (Mexico, Egypt, Greece, etc.)
  5. 5. Accounting Identity Gov. budget balance + Private sector balance + Foreign sector balance = 0 This is always true in any country in the world
  6. 6. KSA Sectoral Balances
  7. 7. KSA Sectoral Balances
  8. 8. KSA Private Sector Surplus KSA Sectoral Balances
  9. 9. KSA Trade Surplus KSA Private Sector Surplus KSA Sectoral Balances
  10. 10. KSA Accounting Identity in 2012 Gov. balance (13.27%) + Private balance (18.27%) + Foreign sector (-31.96) = 0
  11. 11. Job Guarantee • Take workers as they are • Jobs first, training later • On the job training • These are neither traditional government jobs nor private sector jobs • These are community service jobs • Funding for the program can come from Government grants or private sector grants (CSR accounts)
  12. 12. Social Venture Partnerships • Venture Capital Model applied to address community needs • Venture Philanthropy: Gives “$Money$ + Brain Power” in order to maximize positive social impact.
  13. 13. Community-driven Job Guarantee • Local community groups identify their needs • They identify the existing skills of the local unemployed population • Employ the existing skills creatively to serve the specific needs of the local community • If the local skills are not sufficient, then work on building those skills through on-the-job training. • Countercyclical adjustment
  14. 14. How does it affect the private sector? • Community service jobs do not compete with private sector production; they complement it • Private sector employers can obtain labor at a mark-up over the Community Service fixed wage • These jobs will reduce uncertainty and smooth out business cycle fluctuations
  15. 15. Rethinking “public works” • Focus on civic engagement and local community development • Community capital • Enriching the social fabric • Examples: - Assistance to the elderly and the disabled - Oral history projects to preserve valuable community values, traditions, and achievements - Leverage digital and media resources to invest in community development - recycling projects - environmental cleanup - installation of solar energy packages
  16. 16. How much does it cost? • 1 million workers • JG wage: 3,500 SAR/month • Benefits (+15% benefits) • Material cost: 3 billion SAR • Total cost: 51.3 billion SAR that’s 1.85% of GDP
  17. 17. Concluding Remarks • The current unemployment situation calls for urgent and bold actions • The traditional employment policies have not been very effective • Saudi Arabia can serve as a role model for the entire region • Full employment is possible, desirable, and affordable
  18. 18. Thank you. ______________________ Implementing a Job Guarantee Program in Saudi Arabia ______________________ Fadhel Kaboub Denison University & Binzagr Institute for Sustainable Prosperity

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