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Al-Ahram Weekly 4 - 10 May 2000 Issue No. 480 
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Published in Cairo by AL-AHRAM established in 1875 |
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Al-Ahram Weekly 4 - 10 May 2000 Issue No. 480
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| Published in Cairo by AL-AHRAM established in 1875 |
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Labour and liberalisation
The transition from a state-led to a fully liberalised market economy is most often debated in terms of economic efficiency -- which is better for economic growth; state intervention, the free market, or some combination of the two? But what about the people whose very lives and livelihoods are at stake? As Egypt and the world mark Labour Day, Minister of Manpower and Immigration Ahmed El-Amawy, speaks to Fatemah Farag in the first of a two-part special focus on labour issues
Egypt Region International Economy Opinion Culture Special Features Travel Living Sports Profile People Time Out Chronicles Cartoons Letters As I wait to be admitted to the office of Minister of Manpower and Immigration Ahmed El-Amawy, a middle-aged male clerk in a safari suit -- one of many -- walks towards me waving a long metal rod. "Move over," he orders as he bends his rotund body over the couch where I had been seated and bangs at the air-conditioning unit with the rod. "This is how we keep the machine running," he explains over his shoulder as he walks out. It is after all a Koldair system, the product of a public sector company which is facing stiff competition from considerably more slick remote-controlled models with multinational brand names.
El-Amawy's office itself is minimalist. One of the few adornments is a large glass box showing to full advantage a dry spiky fish on a bed of shells. This is obviously not a place where time is wasted on pretense.
Ancient, wheezing, air-conditioners and drab corridors seem to echo the ministry's past -- when it was all but identified with the General Federation of Trade Unions (GFTU), and both were identified with the "Socialist experiment," embodied in a massive public and government sector that provided the great bulk of formal non-agricultural employment in the country.
But while the rhetoric of these times was abandoned nearly a quarter of a century ago, its legacy, made up of much more than dingy government offices, survived well into the 1990s. Indeed, the transition continues to this day. And whatever its ultimate results, there is little doubt that the government drive to fully liberalise the economy has impacted dramatically on the lives of hundreds of thousands of working men and women throughout the country.
El-Amawy, is well aware of this. "The economic system before 1992 was a system where the employer was known -- the state. The private sector was marginal and hence our role was seen as being primarily responsible for implementing the guaranteed employment policy. After adopting a free market economy in which the job market is subject to the laws of supply and demand, this common perception had to be revised," El-Amawy said.
The new philosophy of the ministry, according to El-Amawy, "has been geared to dealing with the relationship that is developing between labour and capital in a free market. We are concerned with training and inspection. These have always been our responsibilities, but they were muted. Today the market more clearly requires that the ministry take on these roles."
But what of rising unemployment? "There is no doubt that we have a degree of unemployment," begins the minister; "in 1998/99 it was 8.2 per cent but it has decreased to 7.8 per cent." He takes in stride objections to the accuracy of this figure. "Many people make an effort to calculate the size of unemployment, but the statistics they suggest do not represent reality. You see, they include a large percentage of people who do not want jobs. For example, a very large percentage of female graduates do not want to work -- even those who graduate from prestigious universities because there is the consideration of marriage."
El-Amawy goes on to explain that popular perceptions also define what people consider to be a job opportunity. "People look down on certain jobs. In the monthly employment leaflet published by the ministry we have job openings for positions such as a cashier at a cafeteria. Most people do not appreciate that this is a job opportunity because we have been taught to think that a job has to be either behind a desk like this one -- although this one is not very fancy -- or like that of the man who opens and closes the door over there. This is the result of a very long period in which there was no other option but to work within the government as other activities were marginal. But today, the free economy and the dynamics of supply and demand have their own law: investment gives birth to job opportunities. The investment may be a bakery or a factory, in either case it creates a job."
Small and micro enterprises in both the formal and informal sectors should not be underestimated as job-providers, stresses El-Amawy. "By this sector I mean those establishments which use five workers or less, namely, small stores, cafeterias, some small hotels and workshops. Out of a work force of 18 million, approximately 7 to 8 million are employed within this sector."
photos: Sherif Sonbol
Employment remains a challenge, however, the minister admits. "According to our studies, we must create between 500,000 to 600,000 job opportunities per year. Today, we come close to creating 500,000, but we need more so as to absorb from the current unemployment."
But who is 'we'? "The role of the government/public sectors in job creation has without doubt receded. The private sector has started to fill in for the government. In the new cities and in the traditional industrial areas, the private sector is proving a good employer. I estimate the number of jobs created by the private sector last year at over 200,000 jobs," says El-Amawy.
It has been suggested that the private sector has not stepped into the employment-generating role of the government, because the tax and other incentives provided for investors by the government encourage large, capital intensive investment which absorbs little labour.
El-Amawy is candid, "In some sectors this is true, but really there is no choice. In some sectors if we get machinery and technology which is labour intensive, the industry will be unable to compete in the market. Hence, we are forced to import advanced technology. This is a challenge that we must face, but how? There are other sectors which are by nature labour intensive. For example, ready made garments. No matter how advanced the technology being used these products depend on extensive labour power. We must work towards balancing both types of industries."
Competition, technological advances and open borders raise the question of the quality of training received by workers. Is the training/education agenda appropriate for the requirements of the labour market? "It is true that the needs of the job market are somewhat different from the specialisations available. The job market is definitely in need of workers that are more highly skilled," begins El-Amawy adding that this is not without good reason. "There is a reason for this discrepancy. The Egyptian labour market is open for anyone to work in any job. That person is not required to have proper training and preparation before beginning to work. We have no licensing system or a system by which to measure skill. Hence, a person who works as an electrician in the morning can go and work as a carpenter in the afternoon and no one can tell him anything."
Accordingly, the priorities of the ministry to deal with this situation have been set as follows: "First we must organise the job market so as to create the incentive for people to obtain training and licensing. We have already started working towards this goal but it will take several years to implement. Further, the government, and this government in particular, is concerned with training and education as the basis for human development. Towards these ends the president issued decree no. 102 last February which established the Higher Council for Human Development. This body is concerned with the range of projects that need to be developed toward raising the standard of skills and training. Again, I stress that it will take some time before we can take full control of the job market."
The question remains: What kind of jobs, and what is the quality of life that workers can expect to have under the new free market economy?
While El-Amawy is eager to highlight that large private sector enterprises have provided stable and lucrative jobs, especially for highly skilled workers, he admits that "there are other examples where the relationship between the two is not perfect. We have examples of owners not paying their share of social security payments, and sometimes they are aided in this by the workers who do not want to pay their share either, as well as other instances of violations. We undertake inspection campaigns. We have been calling for the amendment of the social security law to keep up with developments on the ground. But do not think that after all of our efforts there will be no problems. Not all people are angels. That is why we need laws which help us solve the problems as they arise."
He explains further, "The ministry is fully responsible for supervision -- we are the government body concerned with the protection of labour. But our mandate must be served by the law. Hence, we have been advocating the need for a new unified labour law," El-Amawy says.
But a draft unified labour law has been in circulation for some five years now, reportedly drawn up through consultations with representatives of labour, business and the International Labour Organisation (ILO). The leaked draft triggered objections from both labour and business circles, but is yet to reach parliament for enactment.
El-Amawy is clearly frustrated by such objections. "Some people who have the intellectual luxury to sit back and pontificate have written analyses in which they either say the draft is against labour interests or against business interests. These people are incapable of appreciating what those who are involved in worker/capital relations on a daily basis can."
According to El-Amawy, it was labour that first put up the idea of a new labour law. "This draft was not the idea of the government. In 1991, it was the workers, the General Federation of Trade Unions (GFTU), who, when the organisation was under my leadership, suggested the need for a new law. I got a committee together, and it is noteworthy that the first people to pay money to have a committee to study the idea of a new draft were the workers. Then the businessmen were brought in and I left the GFTU. GFTU and the businessmen continued to meet. These are the parties that came to an agreement on the draft, not the government. That is why when anyone comes today and starts philosophising and says change this or that, with all due respect, I tell them nothing can be changed without the approval of those who agreed in the first place," the minister stated adamantly.
El-Amawy went on to explain why the draft law was in fact a positive addition to labour/capital relations. "A basic tenet of the law is that all problems between labour and capital are solved via collective bargaining under the supervision of the government. Also, the law sets down all obligations and rights of both parties down in writing -- in a contract -- and hence no party can use its power against the other party. The draft law does not take from any party rights they currently enjoy, it only adds to these and modernises them so that we can face problems of the future."
El-Amawy brushes aside claims that the presentation of the draft to parliament is being delayed. Rather, he believes that extra time has been beneficial. "It is good that it has taken so long as we have faced problems in the past years which we had never faced before and this gave us the opportunity to search for solutions that could be incorporated into the draft of the law," he said.
Concerning arguments that the draft law was restrictive of labour rights such as the right to strike, El-Amawy commented, "Strikes are about achieving a specific demand and if that demand can be achieved without striking, then why strike? Just for the sake of striking? In the proposed draft it is stipulated that before you strike you must go to the employer and present the demands. Maybe an agreement can be achieved. Maybe if he cannot meet these demands and the alternative is a factory closure, workers would revise their position. They would have the choice."
Claims that the draft was prepared behind closed doors and not widely discussed within the labour movement are unjustified according to the minister. "How can I get the 18 million workers of Egypt and put them into a hall and ask them what they think of this draft law? Are there not those who are their democratic representatives. These are the ones with the mandate to negotiate."
El-Amawy argues that such issues should not be politicised. "Some people are talking from an ideological standpoint, but the labour law, and social laws in general, are not about ideology they are about people's daily bread. How to bring the parties in the production process together so that people can continue to make a living."
With all of these changes and developments, perhaps the time has also come to modernise the trade union structure? Despite privatisation, trade union activity continues to be the exclusive preserve of GFTU, a single trade union structure established in 1957 by the Nasserist state within the framework of a co-operatised labour movement. Under a liberal economy, some have argued for the right to pluralism in the trade union movement. "This is very superficial talk, with all due respect for those who say it," says El-Amawy. The minister insisted that in many countries of Europe, especially in northern Europe, there is a single trade union "and they have no [trade union] pluralism." There, as here, it was the workers choice to have a single trade union, El-Amawy asserted.
Admittedly, "pluralism exists in the world, I cannot say otherwise. I know of an African country whose name I shall not mention that has 46 federations! Tell me when the businessman wants to negotiate with 46 federations. Who is he going to talk to?"
El-Amawy questions the validity of the idea that there is inevitably a conflict of interest between the government and labour. "I do not understand this thing about workers versus the government. The Egyptian system gives workers the right to be a part of management. We are members -- the workers that it is -- of holding companies, parliament, etc. We participate in decision making. How can we stand against a decision we have participated in making?"
