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Saudi Women and the Shadow Economy:

Saudi Women and the Shadow Economy:

 The main paper was presented by Dr. Maha Al-Aidan, commented on by Dr. Wafa Al-Rasheed and Dr. Nora Al-Suoyan, and the debate was moderated by Alia Al-Bazei. The paper addressed the topic of the Saudi women and the shadow economy being an informal activity, and an important tributary of the economy of any society. The economic studies indicate that the shadow economy is growing at greater rates than the formal sector, and that there are economic factors standing behind its growth, particularly the economic failure by the local economy to create jobs that accommodate the workforce.

The paper also tackled the components of this sector, and concluded that the first sector includes small projects, while the shadow economy is represented by random work. Among the most important advantages of this kind of economy is that it accommodates increasing numbers of manpower. This creates many opportunities for businesses that help employment, reduces differences in income distribution and narrows the gap in the economic levels.

This type of economy is characterized by the economic effects represented by lacking accurate statistics on its real potentials, and the difficulty in controlling it economically, or through laws and regulations, or even social standards.

The comments that were made on this paper stated that most of the reasons for women joining work in this sector are poverty, family support, high share payable by women in social security and insurance, low material wages and moral incentives, and complex administrative and organizational procedures for women’s work.

The comments also indicated that the shadow economy is a manifestation of the backwardness of societies, as it leads to waste and misuse of human resources. The individuals resort to hidden economic activities that are not clean, and the slow pace of adjusting economic and social policies and fighting corruption is a major reason for the emergence and spread of this economy.

The comments on the issue discussed that the shadow economy cannot be eliminated, but its volume can be reduced, and that the nationalization of some commercial sectors has not been entirely successful, because of the shadow economy that affects the movement of buying and selling.

The contributors also saw that the shadow economy is partially related to poverty, and that it has to do with the culture and values of individuals. This economy is a result of economic and management conditions that reflect a defect in the distribution of financial and human resources and their management.

The contributors had different views about whether or not e-commerce is part of the shadow economy; some suggested that it does not fall within the shadow economy, while others have argued that it is. Every action that does not fall within the formal laws and regulations, it falls within the informal sector.

The contributions mentioned the negative aspects of this sector, while some stated that this sector would have many positive aspects if it undergoes organization. The risks and negative aspects of this type of economy are reduced without excluding or fighting it. The presence of the shadow economy is necessary in order to provide job opportunities for some social groups.

Among the most important recommendations were the following:

  • Studying the circumstances and reasons that drive individuals to work in hidden economy activities.
  • Establishing or organizing cooperative societies, with every society including different professions, organizing each profession, and setting the regulating rules under the supervision of the Ministry of Labor and Social Development.
  • Building unified service platforms to issue licenses.
  • Creating a regulation to allow women to do business such as preparing home-made food and drinks, provided that they comply with the health requirements.
  • Requesting the ministries of commerce, labor and social development to prepare an executive regulation to facilitate licensing procedures and practice work in the symbiotic economy institutions.
  • Emphasizing the necessity to employ legitimate hidden economy activities in the formal economy, by facilitating administrative procedures and restrictions.
  • Awareness that containment, empowerment, training, institutionalizing work, investing in the local product and protecting it from unfair competition with foreign products can make some progress in employing this economy as a primary source for the individual and society.

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