Will end of women’s driving ban put Saudi Arabia on the right road?

Saudi Arabia on 24 June lifted its driving ban on women, as it tries to get more females into the workforce; but it has also cracked down on women’s rights activists who campaigned against the ban. So how deep do the kingdom’s much-vaunted reforms of women’s rights actually go, and what do they mean for foreign businesses and expat women in Saudi Arabia?

Saudi Arabia lifted its ban on women driving on 24 June, 2018

Indicators

• 2001: Women are permitted personal ID cards, although issued to their male ‘guardians’.
• 2005: Forced marriage is criminalised. However, marriage contracts continue to be drawn up between the husband and father of the bride.
• 2011: Women are given the right to vote.
• 2013: Women are allowed to ride bicycles and motorcycles in recreational areas. However, they must adhere to full Islamic dress and have a guardian present.
• 2015: Women are allowed to stand in municipal elections.
• 2017: Women make up an estimated 30 percent of the private sector workforce in Saudi Arabia – an increase of 130 percent increase in four years.
• 12 January 2018: Women are permitted to enter sports stadiums to watch events featuring male players. However, they must be segregated from male-only crowd areas and sit within a family section.
• 24 June 2018: The ban on women driving in Saudi Arabia is lifted.

Analysis

Women’s rights to benefit the economy
Saudi Arabia is a rentier state with around 50 percent of its GDP derived from the oil and gas sector. Under the leadership of Crown Prince Mohammad bin Salman – known colloquially as MbS –the Saudi government is advancing an agenda of economic and social reform. Here, Saudi’s Vision 2030 and the National Transformation Plan aim to revive the country’s non-oil economy. Such ambitions include: doubling the real estate sector’s percentage of GDP from 5 to 10 percent by 2020; an increase in household spending on cultural and entertainment activities from 2.9 to 6 percent of GDP; an increase in the private sector’s contribution of GDP from 40 to 65 percent; and an increase in foreign direct investment from 3.8 to 5.7 percent of GDP.

Within this continuum of reform and economic advancement, Saudi women are gaining social freedoms. This is because MbS aims to tap into Saudi Arabia’s significantly underused female workforce in order to benefit the wider economy. While Saudi Arabia currently has the largest gender imbalance in the labour participation rate among G20 countries, Vision 2030 aims to increase overall female labour force participation . Understanding the need for female labour force participation in order to advance the socio-economic position of Saudi Arabia, Salman aims to address factors currently influencing the exclusion of women from the labour market.

Saudi women have been largely excluded from joining the nation’s workforce. While the percentage of women in the private sector has increased in recent years – women now make up 30 per cent of its workforce – overall, women still face high levels of exclusion due, in part, to high levels of education centred on skills that are not in demand.

Moreover, women have faced obstacles in gaining employment due to morality laws enforcing segregation in the workplace. Both the public and private sector require the permission of a woman’s male guardian in order to hire her, while strict gender segregation in the past limited the ability of small businesses to hire women in the first place, due to the cost of running a separate office.

The restrictions of the male guardianship system extends to travel, as women require their guardian’s permission to travel, and companies may be put off hiring women who may face travel obstacles in carrying out job requirements.

Increasing women’s access to labour market
In recent years however, the authorities have introduced some reforms in an attempt to increase women’s access to the labour market. These include reforming the labour law, which previously restricted women’s right to work in fields that were ‘unsuitable to their nature’, and no longer requiring that women need permission from their guardians to work. Moreover, some work placements do not require complete gender segregation; however a separate break room is still required.

Perhaps the most significant reform is the lifting of the ban on women driving, which came into effect on 24 June 2018. Now women will no longer have to rely on taxis, drivers, or husbands and male relatives in order to commute to work. Moreover, the possibility of female taxi drivers could further open up opportunities for women from conservative backgrounds who are forbidden from using conventional taxis as they are driven by ‘unfamiliar men’.

The lifting of the ban could save households around 1,000 USD per month in taxi and personal driver fees. Furthermore, it has been estimated that the move to allow women to drive will help keep 30 billion SAR (8 billion USD) inside the local economy per annum. This would be partly due to Saudi families having increased disposable income as more women work. Another factor would be a fall in numbers of expatriate workers – much of whose salaries are usually spent in their home country –  following a ‘Saudization’ drive reserving some occupations for locals.

Assessment

Impact of reforms on Saudi women
While the lifting of the driving ban is a historic event for women’s rights in Saudi Arabia, women face significant challenges in accessing their right to drive. In addition to the limited number of driving schools, women pay around six time as much as men for lessons. Moreover, in the wake of women being allowed to drive, leading women’s rights activists and those who have campaigned against the driving ban have been detained. While Salman is promoted as a reformist championing women’s rights in Saudi Arabia, simultaneously the state is cracking down on female activists. This duality indicates a state policy of handing women some rights in order to benefit the economy, while continuing state policy of political repression.

While the guardianship system remains in place, women’s ability to participate in the labour market will be greatly limited

Allowing women to drive will have some impact on female participation in the workforce due to greater ease of access to job opportunities for women. However, it is unlikely that this repeal alone will result in mass female participation in the workforce. This is because women will still be affected by Saudi Arabia’s guardianship system. Here, women’s economic opportunities are largely dependent on the opinions of their male relatives. While more liberal families may allow their daughters to study abroad and take leading roles in business, others may be explicitly forbidden from leaving the house and working. One Saudi recruitment firm reported that an estimated 4 out of 10 women for whom its secures work leave after a few months due to pressure from their families. Therefore, while the guardianship system remains in place, women’s ability to participate in the labour market will be greatly limited.

Impact of reforms on foreign companies
It is likely that the increase of Saudi women entering the workplace will have a positive impact on foreign companies with offices in Saudi Arabia. The recent relaxation of complete gender segregation in some workplaces means that companies may not need to secure extra office space to accommodate female staff – although a separate break room for women is still required. Meanwhile, the introduction of local female staff can have a positive impact on an organisation through the fresh insight and ideas they can bring.

 The increase in domestic female participation in the workforce may lead to a reduction in Saudi reliance on the expatriate workforce

On a practical level, businesses in the kingdom will have to turn more to locals for staff as reforms to free up employment opportunities to Saudi nationals impact on the expatriate workforce. Currently, more than 11.1 million foreigners work in the private sector, accompanied by more than 2,220,000 relatives. However it has been estimated that around 165,000 expatriate workers will leave by the end of 2018. An array of factors have made Saudi Arabia less attractive to some expats, particularly in blue-collar occupations. These include: a Saudization policy which makes certain jobs, largely in sales and services, reserved for Saudi citizens; an annual tax increase and additional fees for expats’ dependants; rises in living costs which are not offset for expats by state subsidies on utilities; and a monthly tax imposed on hiring expats, introduced in 2017.

It is plausible to assume that the increase in domestic female participation in the workforce may lead to a reduction in Saudi reliance on the expatriate workforce.

Impact of reforms on expat women
However, while this era of reform is making life more difficult for expats in general – especially in blue-collar occupations – it will likely create a more comfortable environment for female expat personnel and female business travellers.

In addition to now being able to drive in the kingdom, female expats will also benefit from further social and leisure reforms. These include: the opening of cinemas; the development of a ‘semi-autonomous’ luxury resort on the Red Sea coast due to open in 2020, which reportedly will be a visa-free travel destination that won’t function under Sharia laws; and the opening of an ‘entertainment city’ in the capital Riyadh. Such social openings may pave the way for a more tolerant society and consequently could create a more relaxed workplace environment in terms of gender segregation.

Another reform that will positively impact the lives of female expats is the new provision for women living in Saudi Arabia to be able to start a business without the permission of their guardian. This could likely give women more business freedom and encourage the development of specifically women-friendly services. However, the provision of this reform is itself limited as women are still often required to provide character references from men before they are granted licences or loans.

Female business travellers are perhaps best impacted by the reforms, as they will likely see the greater freedoms for women in society and within the workplace while not being exposed to growing employment competition from locals that expat personnel are likely to face.

Conclusion

The lifting of the driving ban in Saudi Arabia is part of the government’s drive for economic reform. Recognising the economic benefit of female participation in the workforce, Salman has provided a window for social reform in Saudi Arabia. However, it must be stated that such policies are based on economic advancement and the overall benefits to women are limited. This is evident through the continuation of political repression and the guardianship system.

The repeal of the ban on women driving will certainly impact expatriate women workers in a positive way, as will social reforms liberalising entertainment, and measures allowing women to start their own businesses. Moreover, it is plausible that such reforms will be reflected by a less conservative working environment.

Offsetting this, the extension of policies such as Saudization is likely to reduce opportunities for expats in general, as the authorities seek to increase the local composition of the kingdom’s workforce.

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