Saudi Arabia recently issued a royal order banning local government departments from seeking consultancy services from foreign firms, Saudi Gazette reported. Instead, all agencies are now obliged to sign deals with Saudi consultancy firms, except for when faced with "dire circumstances" or when a department is unable to find "Saudi expertise to provide the required consultancy services."
The move is based on a decision made by the kingdom's General Secretariat of the Council of Ministers and comes in line with recommendations sent out by its Experts' Committee.
Before the order was passed, the Chairman of the Council's Control and Investigation Board sent out a letter in regard to contracts signed by government agencies for consultancy services. In it, he stated that the Experts' Committee closely examined and researched the matter in collaboration with relevant authorities. The General Committee then "endorsed the findings" and welcomed the order's passing.
A similar legislation was discussed by the country's shura council a few years back after the total value of the contracts awarded to foreign firms was estimated at around 12 billion riyals ($3.2 billion). Deliberations included information on the huge sums of money the Saudization of consultancy services can bring to the kingdom, though no measure was taken to prevent deals with foreign consultancy firms at the time.
The kingdom has been nationalizing its workforce
Under the country's Vision 2030, officials have been moving towards the Saudization of a large number of industries. This comes in line with continued efforts to lower unemployment rates among young people in the country. It also aims at helping the kingdom diversify its economy, opening up new income sources that aren't oil-dependent.
One sector that has been nationalized in the country so far is the retail sector, which was previously dominated by expats and foreigner input.
In 2017, the kingdom's Ministry of Civil Service ordered all ministries and government departments to terminate contracts with expatriate workers within three years. Only Saudi nationals will be able to replace those who lose their jobs in the public sector.