File - Foreign labourers work at a construction site in the Saudi capital Riyadh on April 10, 2013. AFP PHOTO/FAYEZ NURELDINE
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Saudi Arabia is changing tack in its labor reforms, softening the blow to companies with money for subsidies and training while trying to lure Saudis to the private sector with more attractive working conditions.Reforms in the past three years have focused on pressing firms to employ more Saudis, by making it harder and more costly to hire foreign staff.The number of Saudis working in the private sector jumped to 1.5 million people by the end of last year from 681,481 in 2009, according to the latest available data in the ministry's annual report for 2013, published in late July.That brought the "Saudization rate" – the proportion of all private sector jobs held by Saudis – up to 15.2 percent from 9.9 percent over the same period.The costs of the reforms are slowing the economy moderately; annual gross domestic product growth eased to an annual rate of 4.7 percent in the first quarter of 2014 from 5.0 percent in the previous quarter.For example, it previously calculated whether a firm was meeting its quota for employing Saudis by looking at data for a 13-week period; from January, it will expand that period to 26 weeks, giving companies more flexibility in complying.
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