Is Saudi Arabia Ending Sponsorship System ?

Kafeel system is finished. This is the news, expatriates are waiting to hear.

Hopes are running high after announcement by Qatar that it is abolishing the Sponsorship system.

But is this going to happen in Saudi Arabia ? Yes, the trends show that labor reforms in Saudi Arabia are moving in this direction. And for the Saudization program to succeed, it is necessary that labor market gets organized and there is free movement of labor. This will result in rise in salaries for expatriates which become on par with Saudis. The following actions by Labor Ministry reinforce this point:

1. Transferring from current is possible in the following conditions without the approval of current sponsor:
   • If the salary is not paid on time
   • If the iqama is expired
   • If the company is in Yellow or Red
   • If the company has committed any violation
2. There are reports that MOL will allow change of sponsor after end of contract without sponsor approval.
3. Implementation of WPS – Wage Protection System through which MOL closely follows implementation of work contract by the companies.

All these actions show that Saudi Arabia is slowly moving towards creating more labor friendly environment. The next step may be ban on holding on passports by companies and penalization of those who follow such practice. Once withholding passport becomes illegal, the rest of kafeel system will become history by itself.

The million dollar question is – How long will this take to happen ?!

What do you think ?