One-way ticket
Egyptians working in the Arab Gulf states are in no hurry to return, writes Yasser Sobhi, but an escalation in the war might force an exodus
As the war in Iraq continues to escalate, nearly two million Egyptian workers in Arab Gulf countries remain at risk. A quick war would have been their best scenario, but even that seems unlikely now.
As United States President George Bush was giving President Saddam Hussein an ultimatum to leave Iraq or face war, Kuwaiti enterprises were giving their Egyptian employees a similar one, "If you leave the country, it will be on a one-way ticket." Thus, many have opted to stay; a decision that, ironically, will favour the Egyptian economy.
Kuwait has the fourth largest expatriate Egyptian population in the Arab world (after Saudi Arabia, Libya and Jordan), and provides jobs to almost 200,000. Their annual remittances represent an important contribution to Egypt's foreign currency income. In the financial year (FY) 2001/02, Egyptian employees in Kuwait remitted some $246 million back home.
As the attacks on Iraq began, Egyptian ports and airports reportedly received hundreds of Egyptians, Kuwaitis and Iraqis, who were fleeing the war zone. Most of the Egyptians were women and children, who had left their husbands and fathers back in Kuwait. Those that have made the decision to stay in Kuwait have clearly been influenced by the region's poor economic performance -- unemployment stands at nine per cent officially, with some saying it is closer to 14 per cent.
As for workers in Iraq, the decision has been more complicated. The structure of Egyptian workers in Iraq -- three per cent of total Egyptian labour in the Arab world -- made it unlikely that they could leave the country once war began, according to a recent study on the impact of war on Egyptian labour in the region.
"Most of the Egyptians employed in Iraq are working in the informal sector, whether in agriculture, crafts or the service sector. In the case of a quick and decisive war in Iraq, it is unlikely that they would return to Egypt, as they have become well integrated into Iraqi society and economic activity," says the study, which was prepared by Laila El-Khawaga, professor of economics at Cairo University.
The study links the impact of the ongoing war, in terms of length and severity, on Egyptian workers. It suggests three scenarios for war that, besides the security issue, should determine movement in oil prices and hence the ability of oil- based Arab economies to continue to host Egyptian workers.
In the case of a quick strike, that is, from six to nine weeks, leading to the removal of Saddam Hussein's regime with limited physical and human loss, oil prices are likely to average $25-26 per barrel for the remainder of the year. This scenario would make a return of Egyptian migrant workers unlikely. In fact, it is expected that demand for Egyptian workers would increase due to a post-war reconstruction of Iraq.
In the case of a war characterised by fierce resistance from the Iraqi military, resulting in large human and physical losses and a reduction in global oil supplies, oil prices could increase to $37 per barrel. In this scenario, it is expected that around half of the Egyptian workers in Iraq -- or about 33,000 workers -- would return to Egypt. They would probably be joined by a large number from Kuwait, Jordan and Saudi Arabia. Thus, between 134,000 and 268,000 workers might then return to Egypt.
In the case of a war characterised by the use of chemical and biological weapons -- leading to total chaos and disruption in all Arab countries -- oil prices would soar. Egyptian workers would be forced to return home in this scenario, for safety reasons and because of the economic devastation that the Gulf states would subsequently endure.
