The Negative Impacts of Commercial Concealment on the Performance of Small Businesses in Jeddah Province in Saudi Arabia

Abstract

The commercial concealment phenomenon leads to negative economic, security and social consequences. It has been linked to several other phenomena such as money laundering operations and the violation of residence and work regulations by foreign workers who have been deported several times from the country due to their illegal entry. The trading practice by foreigners has been widespread for two main reasons: first, due to the availability of jobs; second, the Kingdom of Saudi Arabia is the shrine for many Muslims, especially after the Umrah (mini religious pilgrimage ceremony) or Hajj seasons. These reasons have contributed to the presence of a large number of foreigners who engage in commercial concealment activities with the help of a Saudi citizen. Such practices have contributed negatively towards both, the economy and the society, noting that the number of those foreigners is on the rise. Aggravating this situation, foreigners conceal each other’s practices by hiring other foreigners in their businesses and not Saudi citizens. More light has been shed on the commercial concealment issue, whereby, citizens, the media and authorities have altogether started to combat this phenomenon. It is gaining more attention especially after the spread of many security-related crimes that are constantly published in daily newspapers. Moreover, commercial concealment played a role in the increase of the unemployment rate among young people and the control of foreigners of many commercial and services businesses in which small businesses occupy a large portion. The importance of this research study is demonstrated in its focus on the commercial concealment phenomenon and its negative impacts on the State. This particular phenomenon gravely harms the economy and inflicts damage on the society through the spread of drugs, theft and other crimes. The current research addresses this phenomenon relying on the application of a positivistic (scientific) approach to study, with a deductive approach by analyzing and reaching appropriate solutions or answers to this phenomenon. The research explores the reasons behind commercial concealment, its economic impact and defines the means to combat it by identifying the best local, international methods and regulations to combat the commercial concealment crime. To identify the various aspects related to the reasons behind commercial concealment, information and data relevant to the research topic was collected from the private sector, official bodies, citizens and other related sectors of the society. Thus, this research study followed an explanatory nonexperimental research design (Belli, 2008; Cook and Cook, 2008; Johnson, 2001) via a survey which was distributed to a 100 randomly selected sample. The IBM SPSS Statistics 23 Package for the Social Sciences (SPSS®) software was used to analyze the collected data. The research drew up some proposed recommendations to combat the commercial concealment phenomenon based on the results of the analysis of questionnaires and the study of laws, regulations and relevant references.