Working your way out
Efforts to combat poverty worldwide have met little success and Egypt is no exception. Gihan Shahine sifts through a new ILO report in search for answers
"Breaking out of poverty is really about breaking into a new cycle of opportunity and local wealth creation."
-- Juan Somavia, ILO director-general
This is the main message of Working Out of Poverty, a new report by Juan Somavia, the director-general of the International Labour Organisation (ILO). Unless new ways are found to create opportunities for the world's poor to work for a decent living, the report warns, global efforts to reach the Millenium Development Goals (MDGs), which focus on halving extreme poverty and hunger by 2015, will be doomed to failure.
"The persistence of poverty is the moral indictment of our times," Somavia said. "While there are some signs of progress, the fact remains that never have we seen so much wealth while so many continue to live in abject poverty."
Poverty, a global epidemic, stumping experts in every single society. The picture is bleak: Half of the world's population (three billion people) is poor, living on less than two US dollars a day. More than one billion people (23 per cent of the developing world's population) suffer absolute poverty, struggling on one US dollar or less. Even in the 20 most industrialised countries, over 10 per cent of the population, on average, was living below the poverty line in the mid 1990s; according to the report.
Unemployment has reached its "highest point". At least some 180 million people who could be working are unable to do so. And over a billion people are underemployed, in insecure jobs producing far less than they could. The future is no more hopeful. There are at least 50 million new entrants to the labour market every year worldwide, 97 per cent of them are in developing countries. Over one billion young people will be seeking jobs in the next 10 years and the global economy will not be ready to "make full use of the enormous potential of their skills, energy and ambition"; according to the report.
The report draws a pessimistic picture, one where signs of progress in some areas pale in comparison to worrisome trends of growing poverty in many others. Whereas the number of poor people in China and East Asia dropped from 1.1 billion to about 900 million in the 1990s, it increased by 25 per cent in Sub Saharan Africa to reach nearly 500 million persons. In the Middle East and North Africa, the number of people living at or below the poverty line rose from 50 million to nearly 70 million, while in Eastern Europe and Central Asia, the number increased three-fold to 97 million.
The report also reveals stark injustice in the distribution of wealth in the world represented in the widening income gap between the wealthiest and poorest fifths of the world's population from 30-1 in 1960 to 74-1 in 1999.
"If the poorest people living in the poorest countries were polled today, I doubt if they would report any major recent improvement in their lives," Somavia lamented.
To reach a more accurate conclusion, however, country-level consultations are currently held in every ILO member state based on the suggestions presented in the report. Each country is required to present its recommendations for discussion first in a regional conference in Addis Ababa in December and ultimately in an extraordinary African Summit taking place in 2004.
So what is the situation of poverty in Egypt? A host of methodological, conceptual, and practical difficulties faces those who seek an answer. Measuring poverty is an inexact science at best; at worst, it is riddled with controversy arising from different ideological views on defining poverty. Even when using the same data, different researchers give varying estimates about how many poor people Egypt has. Or, at least, that was the case at an ILO seminar held in Cairo on Saturday to discuss the state of poverty in Egypt and propose solutions based on the ILO report.
Official estimates indicate a drop in the number of poor people, living below a poverty line of two dollars per day, from almost 20 per cent of the Egyptian population in 1995/6 to almost 17 per cent in 2000. Officials credit the decrease to the strong economic growth, between four to five per cent annually during that period.
Many experts, however, contest those figures, speculating that poverty had already reached more than 40 per cent of the population in the 1990s. The report released last August by the UN Children's Fund (UNICEF), the National Council for Childhood and Motherhood (NCCM) and the Situation of Egyptian Children and Women, reached similar conclusions. According to the report, using the same poverty line measure of two dollars per day, the proportion of the poor in Egypt stood at 52.7 per cent in 1995/6.
If calculated by the human poverty measure, which takes into consideration income and non-income dimensions (such as malnutrition, health services and mortality rates) the percentage of poor Egyptians would be 32.3 per cent, according to the Human Development Index.
Even when going by the most conservative estimates of 17 per cent, the number of those below the poverty line would still be as high as 15 million people.
Other experts, however, insist that absolute numbers make little difference. Samir Radwan, an ILO senior adviser, argues "What matters is the trend of poverty and who the poor are."
For Egypt, this trend can easily be characterised as alarming. Since income-poverty is always observed in relation to growth rate, there has been a near-consensus among experts that the number of poor people has significantly increased since 2000. The economic aftershocks of the 9/11 attacks on the US have also dealt a serious blow to the Egyptian economy, aggravating poverty.
The growth rate has dropped to 2.5-3.0 per cent since 2000/1. Egypt's population is growing fast (at a rate of growth is 1.7-1.9 per cent). "So to absorb the 600,000 new entrants to the labour market every year, the economy has to grow by at least six per cent," Radwan concludes.
The worst bane, however, lies in the characteristics and geographic distribution of poverty. While traditionally prevalent in rural areas, poverty is now also focussed in urban slums.
"Poverty is prevalent among the lower levels of civil servants and those working in the informal sector," Radwan told Al-Ahram Weekly. "But, more seriously perhaps, is the fact that poverty is also spreading among fresh university graduates who stand for 74 per cent of the unemployed. If you provide those graduates with work, then you are automatically tackling poverty."
Experts similarly lament poverty's unequal grip on the country. Poverty is most widely prevalent in Upper Egypt. As is the case worldwide, women and girls are more likely than males to become trapped in poverty. The ILO report says that two-thirds of the female workforce of the developing world are in the informal economy, generally doing the lowest-paid work.
The real challenge, according to the report, lies beyond what statistics measure. Poverty breeds a growing sense of powerlessness and indignity, of being unable to think, plan or dream beyond the daily struggle to survive.
Poverty perpetuates itself through a vicious circle of poor health, reduced working capacity, low productivity and shortened life expectancy. The poor receive inadequate schooling, which, consequently lead to low skills and insecure income. The curse of poverty then affects society at large, hindering growth, fuelling instability, and keeping poor countries from advancing on the path to sustainable development, the ILO claims.
But the poor are also a wealth of human resource for what they have of enormous reserves of courage, ingenuity, persistence and solidarity that helps them get through each day on less than an equivalent of two dollars, the report says.
And so, Somavia suggests, "instead of waging war on poverty from the top down, the multilateral system must find ways of tapping into this unused potential. In many ways, the working poor are the ultimate entrepreneurs."
To do so, the report suggests "empowering the poor themselves" and ensuring that they have a chance to obtain jobs. Employment, Somavia asserts, is "the most effective route to poverty eradication".
But there are caveats here. The report focusses on providing the poor with a "decent work dividend", not just any kind of work. That is, creating full and productive employment and better-quality work, where employees enjoy stable incomes, social security, a safe and healthy environment and a voice to obtain recognition of rights and demand respect.
"We must provide work -- work that expands choices of a better quality of life, work that creates wealth that can be distributed fairly, work that sends children back to school and ensures that everyone who wants or needs a job can have one," Somavia enthused.
But how applicable is this to Egypt?
Radwan puts it this way: "To create employment, the economy should grow at a minimum of six per cent a year."
Which, Radwan insists, is not far-fetched. "The government needs to adopt an expansionary policy and combine it with an investment policy," Radwan suggests. "That is, funds should be invested in productive, employment-intensive, sectors."
But in addition to boosting economic growth, Farrukh Iqbal, a lead economist at the World Bank, believes a long-term plan is equally essential. Which is, Iqbal said, "increasing the future potential to earn income, typically achieved through education".
"Poverty is very highly correlated with educational achievement," Iqbal told the Weekly. "It declines as the average level of education rises."
But poverty is a complex problem, one that requires a multi-faceted strategy, including providing the poor with better social security nets and enhancing their skills through training.
"Government policies, however, should be clear, pragmatic and meaningful," said Mustafa Kamel El-Sayed, professor of political science at Cairo University. "Training, for instance, should be organised according to labour market demand, or else, it would be a waste of funds."
There is a wealth of theories, suggestions and recommendations for those at the helm of combating poverty. The challenge, however, is always how to translate them into action. "The poor need a decisive commitment from us if they are to find a dignified way to work out of poverty," said Somavia. "We cannot let them down."
