Unemployment in Egypt is on the rise, especially given the current economic crisis. The Central Agency for Public Mobilisation and Statistics’s (CAPMAS) has revealed that out of 23 million
Unemployment in Egypt is on the rise, especially given the current economic crisis. The Central Agency for Public Mobilisation and Statistics’s (CAPMAS) has revealed that out of 23 million and 829,000 Egyptians working in the Egyptian market, 4.676 million are women. The average rate of unemployment is 12.4 per cent, and is highest among young people from 20 to 24 years old at 46.9 per cent, followed by the age group 25 to 29 at 24.4 per cent. The highest rate of unemployment, according to the CAPMAS report, is 82.6 per cent and is among degree holders, whether intermediate or high degrees. Unemployed graduates represent 39.7 per cent of the total number of unemployed. The CAPMAS report indicated that the sustenance level in Egypt is too high; every working person in Egypt sustains two unemployed.
All talk but no action
Unemployment is not new to Egypt, no less than in the rest of the world. Rashad Abdu, Professor of Economics at Cairo University told Watani that in Egypt the problem goes deep because the public sector, which is the main source of employment, is fully saturated with a mostly administrative, non-productive work force. The public business sector, he says, suffers shortage of funds, employs obsolete technologies and strategies, and is overstaffed and not expanding enough to take on new manpower. This leaves only the private sector as a plausible solution, but this appears no longer viable under the current economic crisis.
According to a report issued by the Supreme Council of the Armed Forces, Dr Abdu says, the chaotic security situation in Egypt since the 25 January Revolution and the success of the Islamists, which brings them closer to the official decision making process, have driven foreign investors away from the Egyptian market.
“The two cabinets Egypt has had since the Revolution failed to soften the economic climate or to overcome the obstacles to investment,” Dr Abdu says. He cites the various impediments to resumed economic growth, not least among which is the turbulent security situation, the [legitimate] fears of investors as they see businessmen imprisoned and no final rulings issued on their cases, to say nothing of the repetitive Islamist declarations reeking of hostility towards tourism and tourists?”
“The Premier Dr Ganzouri talks about creating job opportunities, but how can he achieve that under the scarcity of funds?”
When Watani asked Dr Abdu whether the State was able to establish investment projects that could provide young people with jobs, he replied that projects would come after adequate policies were in place, not least halting the flight of investments from the Egyptian market. He suggests that new legislation should be issued to attract investors, in addition to formulating new policies that would help establishing large national projects and kick-start production and create job opportunities.
Dr Hazem al-Biblawi, former Finance Minister, recently declared that EGP12 billion-worth of investments had fled the market, in addition to a EGP22 billion deficit in the foreign currency reserve which went down from EGP36 billion before the revolution to EGP14 billion. The authorities, he says, should restore security and stability if they hope to attract investors back. They should also swiftly bring to justice the symbols of corruption of the pre-Revolution regime to reassure Egyptian and foreign businessmen that the investment climate in post-revolution Egypt is free of corruption.
Taking every chance
“The State should plan for youth employment in all fields, such as working on building Sinai for instance,” suggests former Prime Minister Abdel-Aziz Hegazi. “But the youth themselves should change first.” After the elections are over and some of the public demands related to social justice are met, young people’s concern should be to maximise production and create new opportunities for themselves and the community. The State should be concerned with nurturing the poor and helping them depend on themselves. In such a climate unemployment could be overcome, Dr Hegazi says.
“Unemployment is Egypt’s primary problem, and the State is responsible for finding a solution,” economics expert and banker Mahmoud Hussein told Watani. A purely Egyptian strategy should be set up, he says, to combat unemployment and boost investment, focusing mainly on underprivileged areas. Dr Hussein envisages Egyptians’ savings inside Egypt or abroad being used to fund projects in poor areas because “Egypt should be built by Egyptians.” These projects should then be put on the market for public subscription; businessmen, banks and insurance companies should contribute in them, he suggests. The State should adopt the idea of founding large, labour-intensive projects that would absorb a large number of unemployed.
Economics expert Salwa al-Antari agrees. She says it is true that projects financed through the private sector might be better suited to confront the current situation, but the State should provide needed infrastructure and offer investors incentives such as tax exemptions for the labour-intensive projects.
Watani asked Yumna al-Hamaqi, head of the economics department at Ain Shams University and deputy of the economic committee of the former Shura Council, about the unemployment and training fund established a few months after the revolution. She said the fund was established by the Ministry of Work Force, and a budget of EGP1 billion was assigned to it. Several meetings took place between the fund representatives and those of different fields such as the construction, tourism and petrochemical fields. During these meetings training priorities were determined according to the international measures. According to Dr Hamaqi, an implementation plan is now being processed. The fund, she explains, aims at making use of training centres and universities which are already in place while applying international measures, instead of establishing new centres. Some fields, she says, are actually in need of trained work force, so the fund surveys these authorities or fields in order to provide them with the needed manpower. Dr Hamaki says the fund has supported small scale projects that attract large manpower, and selected the needed calibres through the help of civil society organisations, universities and technical schools.
13 May 2012