Al-Ahram Weekly Online   15 - 21 October 2009
Issue No. 968
Economy
 
Published in Cairo by AL-AHRAM established in 1875

Of labour and migration

The migration of skilled labour can relieve demographic pressures, but it will never be the answer to employment challenges in the region, Sherine Nasr reports on a study released this week and interviews the director of the International Migration Programme of the ILO

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Immediate action is required by governments in Arab Mediterranean countries, including Egypt, to upgrade labour conditions and secure labour migration rights in host countries. This is the message of a comprehensive study entitled, "Labour Markets Performance and Migration Flows in Arab Mediterranean Countries: A Regional Perspective," released this week by the European University Institute (EUI).

The study, co-financed by the European Commission (EC) and started in January, analysed key labour market determinants of migration flows from eight Arab Mediterranean countries (AMCs), including Egypt, Morocco, Algeria, Tunisia, Jordan, Lebanon and Palestine.

The study also touched on the impact of outward migration on the labour markets of AMCs, and proposed a series of specific recommendations to improve the design of the EU migration policies towards AMCs.

Although scarcity, inaccessibility and inconsistency of data constituted a major problem for researchers, some interesting yet alarming facts about the dynamics of labour markets in AMCs were brought to light.

For example, less than one in three people in AMCs have a job. The eight selected countries have shown the lowest female work participation rate, estimated at below 25 per cent against a 42 per cent as the world's average.

"Four out of five women do not have a job," said Ivan Martin, a senior member of the team that conducted the study, during a conference that was organised this week by the EUI, EC and Cairo University.

Estimates are that the working age population of AMCs will increase by 2.5 million persons a year, from 129 million to 154 million between 2010-20. "Thus, some 1.5 million additional new jobs a year over the coming 10 years will be required in order to provide employment opportunities for new labour market entrants," said the study.

Moving to the labour market performance, the study has underlined that the highest rates of unemployment are found in AMCs. "Skill mismatches in labour markets and the poor performance of education systems remain the main problem."

Informal employment is the main symptom of labour market distortions, standing at 35 to 55 per cent of non-agricultural employment. The study describes how informal employment depresses wages, hampers the development of human capital and leads to a prevalence of low productivity jobs, and introduces major distortions into the functioning of markets of goods and services, including the operations of foreign investors.

"However, we still know too little about the working of the informal economy and its impact on economic activity and development prospects in the region, not to mention its interaction with international migration," said Martin.

Touching on the issue of wages and productivity, the study also found that real wages are at a very low level in comparison to the EU, though in Morocco, Algeria, Tunisia, Syria and Jordan only a slight divergence of wage levels in relation to those of the EU could be noticed.

"The low productivity prevailing in AMCs makes it very difficult to improve prospects for the coming years, either for wage increases or for job creation," said the study.

The study further charges that current employment policies in AMCs are not equal to the challenges ahead. Labour regulations were found to be rigid and poorly implemented. "So migration remains the first choice for many workers, in particular the young ones," according to the study.

The study also found that AMC economies are highly dependent on remittances, "With Egypt, Morocco and Lebanon amongst the top 20 remittance recipient countries in the world."

"Ten million AMC citizens are resident in third countries, which represent eight per cent of the working age population." In Egypt and Morocco, migrant labour represents 8.6 per cent of the working age population. "An estimated two million persons will be migrating during the period from 2010-20. However, total migration could be tripled during the same period as migration ratios show a clear increasing trend."

According to the study, there is evidence that skilled migration is causing shortages of qualified labour in certain sectors, as is the case in Morocco and Tunisia, or a drain on scarce resources, as in Lebanon. "In other countries, the migration of skilled labour seems to ease the graduate unemployment problem rather than causing a loss of resources."

The study indicated that skilled migration from AMCs is mainly directed to the Gulf and the US, rather than towards the EU.

In conclusion, while underlining that migration was no solution, "the demographic and skills profile of the EU and AMCs offer opportunities for win-win matching strategies between the EU labour demand and the AMC labour supply."

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