Labour market blues
Past efforts to combat unemployment have failed, but will new labour market policies be enough? Gihan Shahine searches for answers at
an ILO workshop
"The right to decent work is crucial to attain development and alleviate poverty," said Minister of Manpower and Migration Ahmed El-Amawi on Sunday during the opening session of the three-day workshop "Active Labour Market Policies". That right, maintained El-Amawi, has been curtailed by current external and internal challenges. Economic migration, for instance, has decreased as a result of growing worldwide unemployment, and an educational system out of touch with the Egyptian labour market has left many out of work. Meanwhile, according to El-Amawi, young people are still seeking jobs in the swollen public sector while the "real chances [for employment] are found in the private sector and self-employment".
"The Egyptian labour force has to be empowered in the face of all these challenges," said El-Amawi. Accordingly, he explained, the ministry has undertaken multi-faceted employment policy revisions.
The International Labour Organisation (ILO) took the initiative to organise the workshop, under the auspices of the Ministry of Manpower and Migration, as a forum for workers, employers and experts to discuss current strategies and suggest solutions.
Many experts dispute official statistics claiming unemployment rose slightly to 9 per cent in 2001/2. If anything, experts argue, official figures are only estimates since gathering accurate statistics is impossible without a proper polling system.
But other figures are telling. Egypt's population is growing fast -- 2.2 per cent per year -- while the labour force has outpaced it -- growing by 2.6 per cent annually. Moreover, government figures put the economy's growth rate at 4.4 to five per cent per annum. According to an ILO study, each year over half a million people reach employment age, but the economy is growing too slowly to provide them all with work.
"Let's not get obsessed with figures," Ibrahim Awad, head of the ILO Cairo office, told Al-Ahram Weekly. "Unemployment is only part of a more complicated problem that also involves under-employment and poverty. Stopping at unemployment rates is a very simplistic approach to a multi-faceted problem."
Awad hits on a good point. For example, Germany and Egypt have almost the same rate of unemployment, but labour and living conditions are vastly different in the two countries.
"In Egypt, the problem is not just how many people are without work," Awad said. "It's actually the 91 per cent of those working, many of whom -- unable to find jobs in the formal sector -- are forced to work long hours for low wages in insecure jobs to earn their daily bread. Which, in turn, perpetuates poverty."
An ILO country profile of Egypt conducted in 2001 explained that "poor individuals do not suffer as much from unemployment since their main problem is underemployment and low wages."
"Although unemployment rates were found to be the lowest among the uneducated, poverty scored the highest within that same sector," Awad said. In other words, poor people earn less per unit time of their labour.
The worst problem, Awad said, lies in the characteristics and structure of unemployment. According to the ILO country profile, young people out of work in 1998 accounted for almost 94 per cent of the unemployed, and 90 per cent of them were new entrants to the market between 15 and 29 years old. The study also shows that education is inversely related to employment, indicating poor allocation of investment in human resources. The illiterate and barely literate represent a fraction of the unemployed -- 0.56 per cent in 1998 -- while those carrying intermediate certificates accounted for around 70 per cent of those without work in the same year. An estimated 18 per cent of university graduates are jobless.
The "feminisation" of unemployment is equally alarming.
"Unemployment is three times higher among females than males," Awad noted. "This should be regarded as a serious problem since almost a quarter of households in Egypt are female-headed."
Female-headed households accounted for 14 per cent of all poor families and 10 per cent of the non-poor, according to Awad.
Although the government has always said that unemployment is at the top of its agenda, experts claim that Egypt's solutions to the problem are insufficient. While 833,000 jobs need to be created each year to absorb new entrants and the long-term unemployed, the economy is only able to provide 600,000 jobs, according to the ILO study. The study concludes that numerous policies have been drafted to encourage job creation, but these policies are "too general and too broad", and the resources used in the fight against unemployment are inadequate. The government's mid-2000 "National Employment Programme", for instance, was more like a "kind of emergency plan" and has yet to be put to effective use. Again, in July 2001, the government launched a "government employment scheme" to introduce about 800,000 jobs in the public sector. But, the ILO study said, this initiative "will not create any jobs in productive sectors and will increase the number of employees in a government which is already over-staffed."
"The question of employment is not solved by labour market policy measures only," Awad maintained. Those measures, according to Awad, only intervene when the automatic mechanisms of job creation and labour supply and demand matching do not work. "But, since the problem is multi-faceted, more comprehensive solutions are required."
Yet effective solutions can be formulated only when the real causes are identified.
"Overpopulation eats up efforts to create jobs, but the harm would not have been that severe if foreign and domestic investments were enough," said Claude Farid Hassan, international employment consultant at the French Employment Agency in France and a former consultant at the Egyptian Ministry of Manpower and Migration. Foreign investment, Hassan said, is decreasing due to "Egypt's many bureaucratic hoops" while domestic investment does not create enough employment in light of the current stagnant economy.
"For a local investor to provide jobs, he must sell to make money," Hassan told the Weekly. "But the quality of Egyptian products make them unable to sell in the highly competitive international market."
Hassan credits that "lack of quality" to the paucity of skilled labour and, more importantly, the absence of an "inclusive employment strategy".
"Many companies have difficulties finding the right people for the right job," Hassan said. "Qualified personnel may be there, but in the absence of a human resource system, that should work under the leadership of the Ministry of Manpower, companies may not be able to find them."
The public should also change their attitude towards skill acquisition. "People should be educated with a flexible attitude," Hassan added. "They should realise that education is a never-ending process and that they should develop their skills according to market needs."
On policy issues, Awad suggests "looking at all the variables affecting employment issues". That, according to Awad, includes studying the impact of foreign trade on the market, promoting small and medium enterprises, improving working conditions in the informal sector where most jobs are created, improving the skills and productivity of the labour force through training and incentive-based systems and revising government employment programmes.
