Al-Ahram Weekly   Al-Ahram Weekly
23 - 29 December 1999
Issue No. 461
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Wish you were here

By Fatemah Farag

In the Giza village of Hawamdiya is a white-washed, three-storey house. The fresh paint makes it stand out from its neighbours. Inside the modestly decorated interior a fan is placed carefully over the refrigerator, while the television and video are the focal point of the living room. It is the house of Mohamed, a driver who left his village for the Gulf 19 years ago in search of his fortune. "I stayed 15 very long years," recounts Mohamed as he lounges amid his hard-earned treasures. "I made enough money to buy a microbus which I work with my two sons. Three families now survive on that income."

Mohamed was lucky. He not only got a contract to travel, but found a job with people who treated him well. He came back with enough money to upgrade his house and enough money to invest in his current business. He went after the "Gulf dream" and rode the wave.

Out on the street in the cold morning smog in the working-class district of Al-Zawya Al-Hamra stand those for whom the dream passed by. Sayed is about Mohamed's age. In Cairo, he lives in a mud hovel shared with seven other men all of whom come from his hometown in Assuit. Every morning he heads for the street at 7 am. On lucky days a contractor will choose him for a day's work -- he can expect to earn around LE10. "What else can I do? There is no work in agriculture anymore. I do not have the LE7,000 it would take to travel to the Gulf and I do not want to have to pickpocket on buses."

workforce photos: Sherif Sonbol
That is not to say that everyone who got to travel had Mohamed's luck. The violence that broke out last October in the Kuwaiti town of Ghitan was a rude reminder of the fate of the less fortunate. The response to that incident has been a flurry of action by the Ministry of Labour focusing on drafting bi-lateral agreements that would protect Egyptian labourers. And this week the ministry took further action, publishing extensive information regarding travel procedures while at the same time the media has taken upon itself the task of exposing the dire circumstances faced by large numbers of migrant labourers.

"Inspired by the political leadership, represented in the person of President Hosni Mubarak, the General Federation of Trade Unions [GFTU] takes great care of the dignity of the Egyptian citizen," read a statement released by GFTU.

In an attempt to influence the situation, GFTU has been following up on the conditions of Egyptian labour in Kuwait via the Kuwaiti Labour Union while Sayed Rashed, GFTU secretary-general, has announced a plan that would widen the "blanket of social insurance" to cover migrant workers. His initiative, however, comes at the same time that GFTU has admitted that many workers within Egypt are deprived access to insurance coverage required by existing legislation.

"What happened focused attention on the realities on the ground. They are not new, but following the Iraqi invasion of Kuwait the situation has been steadily exacerbated," said one senior GFTU member who preferred to remain anonymous. "The problem, in a nutshell, is that workers go and then find no jobs. If workers went through the proper authorities, we would be able to ensure that the contract offers are legitimate and wages adequate. But people get entrance permits and leave without proper papers. How can we be responsible for the people who go without coming through us?"

But this seems to beg the question of why they do so. Indeed, an elaborate legal and institutional apparatus aimed at protecting the rights of migrant labourers has been in place for many years. There is the Arab Labour Organisation, a specialised agency of the Arab League set up in 1965 and the annual Arab Labour Conference. In 1980 the Arab Employment Agency was established and began its activities in 1982; the Economic Unity Treaty was concluded by the Arab Economic Council in 1957; the Arab Treaty for Labour Movement was ratified by the Arab Labour Conference (ALC) in 1967; the Modified Arab Treaty for Labour Movement was ratified in 1975 while the Charter of National Economic Action and the Strategy of Joint Arab Economic Action was adopted by the Arab Summit Conference of 1980. Meanwhile, the Declaration of Principals Regarding Labour Movement issued by the Arab Economic and Social Council dates from 1984. It is significant though, that out of this landslide of agreements the two treaties were ratified by only five countries, of which two were labour importers.

This last fact underlines a simple, important point, oft over-looked but stressed by Nader El-Fergany, a pioneer in the research of labour migration and director of the independent Almishkat Center for Research. "The Arab market is a buyers' market -- supply exceeds demand." The result, he posits, is that "two major issues characterised the articulation of expatriate labour with the economies of the Gulf Cooperation Council (GCC): labour remained temporary and isolated from the socio-economic fabric and a discrimination-resentment complex evolved to condition relationships. Hence while material benefits were high, work and living conditions in general fell considerably short of international and Arab standards regulating the conditions of migrants."

The story is best told by those who lived it. "It was such a dream to go. Everyone in my village thought I was so lucky. My family was thrilled. People who have not tried do not know how difficult it is to be a stranger. To be so dependent on strangers, foreigners, for everything. Your permit, where you sleep, your pay at the end of the month and the food and future of your children. I am a tough man, but when I was abroad [the term used in Arabic is ghorba, literally estrangement] and would hear an Egyptian song I would cry. I swear to God I would cry just like a little child."

Figures published in 1990 by International Migration illustrate the steady increase in the number of Egyptian migrants to Arab oil-producing countries between 1969 and 1979. The rate of increase was largest between 1970 and 1972 after which migration continued to grow, though at a more moderate rate. The only exception to this growth was between 1973 and 1974 (the war year), and in the wake of the Camp David Accords, when political relations between Egypt and most Arab countries were in crisis.

Although labour migration would continue to grow after 1982, the number of migrants remained below its record high in 1979. The latest figure released by the Ministry of Labour and Manpower puts the current total of Egyptian migrant workers at over two million, 1.3 million of whom are in the Arab Gulf.

"Labour migration happens when there is a market that expels and a market that wants. Egypt expels labour not just because of high unemployment but because many of those employed suffer low pay and bad working conditions," sums up Fergany.

Increased mechanisation in agriculture, which began in the 1960s and accelerated during the mid-1970s resulted in "technological unemployment", while more recent studies on the development of rural areas attest to the continual pauperisation of the Egyptian countryside. A World Bank study quoted by the Land Centre for Human Rights indicates that the real wages of agricultural workers decreased by 60 per cent between 1985 and 1996, while figures covering the ten year period between 1988-1998 indicate that rural unemployment has increased at a higher rate than urban unemployment.

Public sector jobs acted to accelerate labour migration from rural to urban areas. However, as indicated in a 1997 paper by Barry McCormick and Jackline Wahba, this sector, which had already absorbed 35 per cent of the work force, could no longer sustain the strain. The employment guarantee was revoked in practical terms; real public sector wages eroded and the waiting period for government jobs was extended. By 1987 the waiting period was five years for university graduates and six years for secondary school graduates.

workforceLabour migration undoubtedly relieved social and economic pressures at home. However, receiving markets are in no way static. In a 1995 report, Fergany highlighted that "the jump in oil prices in 1973 resulted in a quantum jump in the demand for labour. Hence, while it is estimated that expatriate labour did not exceed 750,000 in 1970 its size doubled in five years and probably surpassed five million in the early '80s. By the early '80s expatriates constituted the majority of the labour force in countries of the GCC and exceeded 80 per cent of the total in some GCC countries. Non Arab labour grew to represent about one third of the afore-mentioned. Despite the oil bust in the '80s, expatriate labour to the Gulf did not diminish, though both the rate of growth slowed down and the share of non-Arabs continued to rise."

The change in the size and composition of the Gulf market was compounded by the second Gulf War. The Iraqi invasion of Kuwait in August 1990 is estimated to have resulted in the return of some 700,000 Egyptian from Iraq, Jordan and Kuwait.

Further, although Iraq adopted a policy of free entry and became the largest receiver of Egyptian migrants in the 80s (when its civilian labour force was largely mobilised in the war with Iran), financial accumulation was limited and the situation deteriorated with the onset of foreign exchange constraints that reduced and delayed the transfer of worker remittances. Also the return of Iraqis to civilian life resulted in tensions. Today only 100,000 Egyptians remain in Iraq. As for Libya, employment has been erratic and declined considerably during the '80s."

Fergany sums up the situation today thus: "Due to economic recession, the economies of the Gulf countries are no longer as keen to employ Egyptian labour. They prefer Asian labour which is more compliant and accepts lower wages."

In the face of shrinking Gulf markets the Ministry of Labour has been working on opening labour markets in Africa while a prominent feature of current economic development programmes is to expand domestic employment opportunities.

The catch 22 aspect of the situation though, is that the local economy has become dependent on exporting labour not only as a means of combatting unemployment, but also as an important source of hard currency. To grasp the magnitude of this dependency, a closer look at both sides of the equation is needed. In 1970 remittances on income earned abroad were estimated at a mere LE2.5 million. In 1973 they had grown 15-fold and between 1976 and 1984 provided the most important single source of foreign exchange, surpassing even petroleum. Today, it is estimated that the 1.3 million workers in the Gulf remit $4 billion annually.

In 1983 the National Specialised Councils attempted to break down the total remittance figure into four categories: financial transfers converted into Egyptian pounds, foreign currency deposits in local or foreign banks operating in Egypt, imports financed by the Own-Exchange Import System and undeclared goods brought into Egypt by returning migrants. The breakdown suggested that the largest component of migrants' savings is spent on the purchase of foreign products through the Own-Exchange Import System. Further, it was noted that consumption patterns by expatriate workers favour imported goods.

The change in consumption habits is obvious in Cairo Airport arrivals lounge, as returning workers navigate their overloaded trolleys. Over the mud houses of the countryside first television aerials and then dishes have sprouted apace while in middle class households the fetish has been for kitchen gadgetry, cars, perfumes and real estate.

Fergany claims that because of the absence of any comprehensive planning remittances have, for the most part, been wasted. "In Korea the remittances of foreign workers were channeled into local production -- there was a strong mobilisation of incoming money. In Egypt everyone spends his money in any which way and the money is lost to consumer goods. This trend is exacerbated by the bias towards large investors. A worker will have saved maximum LE50,000-60,000," Fergany told Al Ahram Weekly. "But the policy framework in which labour migration took place did not help reap the potential benefits of remittances at the macro level and instead reinforced negative economic repercussions such as inflation, speculation in hard currency and dependence on imports."

For the economy as a whole, it seems, remittances have provided little more than a band-aid.

More deep-rooted solutions would be for the local market to provide more good jobs. Ironically, and despite the stated intent to reduce the role of the state in job provision, the government has announced that 650,000 jobs will be created, 150,000 of which will be within the government.

"Unemployment is inextricably linked with poverty... For the vast majority of the poor, labour power is their only, or most important, asset. It is their only access to livelihood," points out Fergany. But the sad truth is that many of those out on the job market lack education and skills. Critics point out that the current government initiative is piecemeal and contradictory, and call for more strategic planning.

"We have a problem of human resource quality. This is part of our problem with the Gulf. Today, to be competitive in the global market you have to have efficient, cheap and highly trained labour. Our education, training and re-training systems are very weak. In this new era of rapidly and continuously changing knowledge and high rates of obsolescence workers require access to on-going education programmes," said Fergany.

Saadeddin Ibrahim, head of the Ibn Khaldun Centre for Social Research, has highlighted that while Gulf countries imported mostly educated and highly skilled Egyptian labour between 1968 and 1972, the balance shifted after the oil boom towards low and un-skilled labour.

"Both labour migration and unemployment are the outcomes of the breakdown of mechanisms resorted to in the past to absorb labour released from agriculture not accommodated in the modern sector. Such labour was either drawn into the public sector by design or into the informal sector by default," opined Fergany.

Khaled is 30 years old and obtained an industrial diploma in 1987. "After graduation I searched for two years but could not find a job. I finally got the opportunity to go to Jordan but job opportunities there were not good. I spent a year and came back." He shrugs his shoulder while pulling his scarf around his face. "Today I stand out in the men's market. I carry sand... that sort of thing. Some days there is work, some days there is none. Some days I make LE10, some days I only make four or five pounds -- it depends on the contractor. I have four children back home."

Additional sources:

Adams, Richard The Effects of International Remittances on Poverty, Inequality, and Development in Rural Egypt (International Food Policy Research Institute, 1991)

Fergany, Nader Aspects of Labour Migration in Arab Countries (Almishkat Centre for Research, June 1995)

An Assessment of the Unemployment Situation in Egypt - draft paper (Almishkat Centre for Research, December 1999)

Kandil, M and M Metwally The Impact of Migrants' Remittances on the Egyptian Economy (International Migration, 1990)

McCormick, Barry and Jackline Wahba Public Sector Jobs and Migration in Egypt (Economic Research Forum, 1997)

ILO and CAPMAS, Immigration and the Movement of Labour Power (1993)

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