Fostering cooperative development in the Kingdom of Saudi Arabia

Background 

The KSA’s economy has been mainly based on extractives industries (crude oil and gas) since oil was discovered in the country. Data from the third quarter of 2021 estimated that crude petroleum and natural gas activities represented 26.6 per cent of the GDP, followed by Government services at 17.4 per cent and wholesale and retail trade, restaurants, and hotels at 9.3 per cent.  In recent years, the country has been moving toward a more sustainable and diversified economy, in line with the national priorities articulated in its Vision 2030. The diversification strategy seeks to transition the country from an oil-based to a knowledge-based economy by promoting innovation and research and development and encouraging high value-added sectors.   

Cooperative development has been identified as a strategic entry point for the country, as the Saudi Vision of 2030 calls for reduced unemployment rates among Saudis by creating productive employment opportunities including for women, ensuring food security and rural development, and reducing inequalities to empower marginalized groups. As of 2023, a total of 410 cooperatives were operating in the Kingdom, predominantly multi-purpose in nature. There was substantial growth between 2019 and 2023 in emerging sectors including: housing (80 per cent); professional services (53 per cent); services (103 per cent); healthcare (46 per cent); and tourism (60 per cent). To further support such growth, KSA’s Ministry of Human Resources and Social Development (MHRSD) has undertaken recent efforts to formulate a National Cooperative Strategy and amend the cooperative law to which the ILO is contributing in line with ILO’s Promotion of Cooperatives Recommendation, 2002 (No. 193). 

 Project Outcomes

In close collaboration with MHRSD, the ILO is implementing a cooperative support programme designed to achieve five main outcomes: 

• Reviewing policy and legal frameworks: by analysing the National Cooperative Strategy and the Executive Regulation of the Amended Cooperative Law in line with international labour standards, the national context, and international good practices.
• Enhancing institutional support by strengthening the role and capacity of Cooperative Societies Council, the APEX organization for cooperatives, which aims to support cooperatives in the country through fostering a collaborative work culture, building human, financial and technical capacities, and establishing strong partnerships. 
• Building technical capacities of MHRSD, primary and secondary cooperatives and education institutions on cooperative development and management. Training efforts under this outcome aim to institutionalise learning among cooperative service providers and educational institutions, complemented by study tours to create partnerships with other countries and benefit from good practices. 
• Advancing statistical data by producing a report on the state of national statistics concerning cooperatives in the country and developing a roadmap in close collaboration with the General Authority for Statistics (GASTAT) towards improving them in line with the ILO Guidelines concerning Statistics on Cooperatives. 
• Promoting co-operators and raising awareness about innovative cooperative experiences from around the world through virtual study tours, webinars, and videos. 

Target beneficiaries

• Ministry of Human Resources and Social Development (MHRSD)
• Employers’ and Workers’ Organizations
• General Authority for Statistics (GASTAT)
• Cooperatives
• Cooperative service providers
• Research Institutions

Expected Results 

• The National Cooperative Strategy and the Executive Regulation of the amended Cooperative Law are reviewed in line with international labour standards, the national context, and international good practices.
• The role of the Cooperative Societies Council (Apex Organization for cooperatives) is adequately defined and enhanced.
• Capacities of MHRSD, primary and secondary cooperatives and education institutions are enhanced.
• A national report on improving national statistics concerning cooperatives in KSA is produced.
• Awareness is raised about innovative cooperative models around the world.