The underground economy is one reason behind the increasing unemployment rate among Saudis, a local report quoted economic experts as saying.

“The underground economy involves a commercial cover-up, which accounts for more than 20 percent of the Saudi gross domestic product (GDP),” the report said.

The term “underground economy” refers to illegal activities that generate income not accounted for in a country’s GDP.

Underground economic players involve expatriates who engage in businesses without securing the necessary licenses and permits to operate.

The report added that those involved are criminally liable and a two-year imprisonment and SR4 million fine could be imposed on them. The report also said that 30 percent of expatriates in the Kingdom are involved, adding that they account for 80 percent of the Saudi economy.

Saad Al-Buainian, an economic expert, said that the underground economy accounts for between 20 and 30 percent of countries’ GDP around the world.

Ahmed Al-Jubeir, a member of the Saudi Economic Association, said that economic reports indicate that foreign workers in the Kingdom control all kinds of different commercial sectors.

“The rate of commercial cover-up in the Saudi economy is over 80 percent in various sectors, and expats’ great labor control is disguised,” he said.

He added that some local entrepreneurs are encouraged to cover up for expat business ventures without paying attention to the Kingdom’s interests and the citizens who need jobs.

“These local entrepreneurs know that covering up for expats’ commercial activities has adverse effects like a higher local unemployment rate, inflation, and competition with Saudi men and women,” he said.

Records show that the unemployment rate in the Kingdom has averaged 5.52 percent per annum from 1999 to 2015.

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