Saudi to reform kafala worker sponsorship system in 2021 -Maaal newspaper

RIYADH, Oct 27 (Reuters) - Saudi Arabia plans to cancel a foreign worker sponsorship system, known as kafala, and replace it with a new form of contract between employers and employees, the financial newspaper Maaal said on Tuesday, citing unnamed sources.

Saudi Arabia, which this year is chairing the Group of 20 major economies (G20), seeks to boost the private sector - and make it more attractive to foreign talent - under an ambitious plan to diversify its oil-based economy.

The kafala system, which Maaal said has been in place for seven decades in Saudi, generally binds a migrant worker to one employer. Rights groups criticise the system and say it leaves workers vulnerable to exploitation.

"The Ministry of Human Resources and Social Development intends next week to announce a new initiative that improves the contractual relationship between employers and expatriate workers," the Maaal report said.

The initiative will be implemented in the first half of 2021, it added, without giving further details.

Currently more than 10 million foreign workers live in Saudi Arabia under the kafala system that requires them to be sponsored by a Saudi employer and be issued an exit/re-entry visa whenever they want to leave the country.

(Reporting by Marwa Rashad; Writing by Lisa Barrington; Editing by Alison Williams and Susan Fenton)


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


More Related Articles

Sign up for Smart Investing to get the latest news, strategies and tips to help you invest smarter.