Saudi labor minister urges Kingdom to increase economic role of charity sector

Saudi Arabia needed to increase the contribution of the non-profit sector to the Kingdom’s economic and social development, the country’s labor minister told business conference delegates on Thursday.

Moderating a session on the subject during the final day of the Riyadh Economic Forum (REF), Saudi Minister of Labor and Social Development Ahmad Al-Rajhi said: “Our effort is to increase the share of the non-profit sector in GDP.”

Describing the non-profit sector as the third pillar of sustainable economic development, the minister pointed out that in developed countries its average contribution toward GDP had reached 6 percent.

Referring to a REF study on the sector, he noted that it was only during the last decade that the Kingdom had come to realize its important role in economic development, social participation, job creation, and promoting the culture of teamwork.

“The non-profit sector contributes to Saudi Arabia’s GDP by one percent and our effort is to increase the share,” Al-Rajhi told the session’s attendees.

Presenting the REF study, Yousef bin Othman Al-Huzeim, secretary-general of Al-Anoud Charitable Foundation, said: “This sector, together with its substantial developmental roles, has become a criterion for the overall progress of nations and a yardstick of their civilization and humanitarian activity rather than a mere indicator of individuals’ income.”

He added that the sector had a key part to play in helping to realize the Saudi Vision 2030 goal of achieving sustainable development through diversification, and that the aim was to raise its level of contribution to the country’s GDP from 1 percent to 5 percent by 2030.

The study stressed the need to transform the sector from a mere initiative into an institutional entity concerned with social investment and integration, in cooperation with the public and private sectors.

Among its key findings, the study highlighted the requirement to increase the awareness of sector employees and supervising agencies about the development needs of society.

A lack of detailed information on the non-profit sector in the Kingdom was also having a negative effect on the extent of its contribution to economic and social development, the study found.

The media too had failed to give enough coverage to the sector and rules and regulations often stood in the way of any expansion in individual and community partnerships through charities and trusts.

Princess Nouf bint Mohammed Al-Saud, CEO of the King Khalid Foundation (KKF), said women were the most important enablers of the non-profit sector.

Currently, the most prominent development was the system of NGOs and philanthropic associations, and the stimulation of the sector to implement good governance, she added.

The princess urged the lifting of restrictions on money transfers to the non-profit sector and tax exemptions on charities and donations.

The KKF had issued a number of regulations to help the non-profit sector, she said, but there was still a need for the creation of more executive programs in order to realize Vision 2030 goals.

Rajaa bin Manahi Al-Marzouqi, a professor of economics at Prince Saud Al-Faisal Institute for Diplomatic Studies, in Riyadh, said: “If we look at any economy, it consists of three important sectors, which are the government, private, and non-profit sectors. There is a need to develop the non-profit sector in such a way that it sustains in the long run and contributes to socio-economic development.”