Al-Ahram Weekly   Al-Ahram Weekly
11 - 17 May 2000
Issue No. 481
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Labour on the fence

By Fatemah Farag
"My brothers, the workers:

From the first day in the 23 July, 1952 Revolution, it was clear that this revolution was undertaken for the working people, for dissolving differences between classes, for establishing social justice, for the establishment of a healthy democratic life, for abolishing feudalism, for abolishing the monopoly and control of capital over government and for abolishing colonialism."

Gamal Abdel-Nasser, May Day Speech, 1963

With these words the late President Gamal Abdel-Nasser summed up, in his first-ever May Day speech, the revolutionary élan of his era. It is a spirit whose time has now passed. Although some of the rhetoric once used to espouse the merits of his socialist experiment remain within the lexicon of the Egypt of today, the context is much changed. The dynamics of capitalist development have considerably altered the economic landscape. The relationship between the state and labour is governed by a new agenda.

The populist regime of Nasser considered the working class to be a corner stone within the "Alliance of Popular Working Forces" in the struggle to achieve economic independence and build an Arab brand of socialism. Wage improvements, job security measures and social benefits were implemented as part of a greater national project. Workers' status as social actors was enshrined in a new constitution that guaranteed that 50 per cent of parliament would be held by "workers and peasants."

In the 1963 May Day speech quoted above, Nasser, in reference to the sweeping nationalisations of two years before declared, "In 1961, the worker became the boss.; in 1961, the worker participated in administration; in 1961, the worker shared in profits; in 1961, work hours were reduced to seven hours; in 1961, the minimum wage was set at 25 piastres; in 1961, the real benefits of the workers began." Yet, Nasser's Arab Socialism was a social contract and as with all contracts, gains come at a cost. In return for greater benefits the labour movement gave up its independence. The government-controlled General Federation of Trade Unions (GFTU) and the Ministry of Manpower became the guardians of labour rights.

Workers
Cartoon
Cartoon
TIMELESS TOIL: Above, cartoons by Hassanein, which appeared in Kalam Sanay'iya (an independent labour magazine) express a certain mood. Top, an image of Egyptian labour in times past
However, these were the heady days of state-driven industrialisation, public sector expansion and guaranteed employment. In a few short years, this economic framework quickly reached the limits of its potential. Since the mid-seventies, the country has been moving to a more laissez-faire model of development. In 1992, the government adopted a programme of structural adjustment that consummated the ideological and economic policy shift. Today, liberal free market economic policies are espoused with the same intensity of conviction that had once characterised the drive to build socialism.

Last week, in an interview with the Al-Ahram Weekly, the Minister of Manpower and Immigration, Ahmed El-Amawi, explained that the liberalisation process has meant more jobs for workers. In the new satellite industrial cities and within the private sector in general, he estimates that 200,000 jobs were created last year alone. He also praised the vitality of the informal sector, which had created an estimated eight million jobs.

Yet, the quality of jobs as well as the rate of growth vis-à-vis unemployment are still serious concerns. While the dominant opinion holds that the populist instruments of the past are still adequate, labour grievances, and struggles on the ground seem to be testing the limits of this argument.

Debate on the current state of labour in Egypt focuses on the issue of unemployment. The government claims it currently stands at about eight per cent. This figure, however, has been contested by a number of independent studies which generally put it around 17 per cent. Nader El-Fergani, head of the independent Almishkat Center for Social Studies, explained to the Weekly that this discrepancy is due to the fact the "standard definition of unemployment, ratified by international conventions, is not used by the government when calculating their current estimate." El-Fergani pointed out that, "In 1996, the Central Authority for Mobilisation and Statistics (CAPMAS) figure was 22 per cent! I think that the new figures are a result of the fact that the issue of unemployment has become very politicised and there is a need to manipulate the figure."

In a recent study of the main labour market aggregates and rates in Egypt between 1988 and 1998, Ragui Assaad, professor at the Humphries Institute of Public Affairs, University of Minnesota, found that of those entering the job market, only one out of every three entrants found a job. A large percentage of these jobs were to be found within the government sector itself. In the private sector, Assaad discovered that most of the newly employed were not sufficiently protected by current legislation. In the study, he found that 80 per cent of these workers enjoyed no labour protection.

Perhaps the most poignant indicator of the pressures created by the growing pool of unemployed is the size of the informal labour market. So-called "men's markets" can be found all over urban centres. Men congregate in these areas to be picked up by contractors in need of menial day labour. Other indicators of deep unemployment are the mass of internal migrants, the expansion of the informal sector and the climate of fear that seems to prevail among workers who have succeeded in landing jobs. As one worker in the industrial 10th of Ramadan City put it, "The owner of my factory has the upper hand. I need this job. If I say anything to protest work conditions, well then, he can throw me out and find ten to replace me on the same day. After all, we all know that there are a lot of people who desperately need a job."

Chronic unemployment is only one half of the labour dilemma, however. The other major problem is endemic poverty. Fergany explained to the Weekly, "One of the most telling pieces of information is that labour's share in national income dropped from 44 per cent in 1975 to 25 per cent in 1995. Wealth has become polarised and in this situation the poor, in reality, do not count within the system. Don't believe otherwise."

Mahmoud Mortada, former trade union activist and current labour issues researcher, is another scholar attempting to raise awareness of the deterioration in the labour market. He explains that, "workers have suffered a decrease in their standard of living as a result of the state withdrawing from many basic services. The development of the new industrial cities has created a section of the working class which is totally isolated, and the informal sector provides jobs where protection is non-existent, and working conditions are harsh. The net result is that workers feel they have been thrown on the market without the protection of either the state or their own organisations, which creates a strong feeling of fear."

Even senior trade union officials, while supporting the overall direction of economic policy, concede that labour is, for the time being, at a distinct disadvantage within the new economic environment. "The new capital is in many cases ferocious," confided a senior GFTU official who requested anonymity, who went on to explain that "there are many cases of inhumane capital/labour relations in which the aim of capital is to make a quick profit and take advantage of incentives given to investment. Yet, these incentives were made in order for capital to create good jobs. In such cases, capital has not come through with its part of the deal."

A case in point is the plight of 300 workers at El-Motahida factory in 10th of Ramadan City. "The owner of the factory borrowed LE23 million from the banks without proper insurance and in September he fled. Since then workers have not been paid," explained Abdel-Hakim Amer, head of the factory trade union committee.

Arriving in this much heralded archetype of the new industrial cities one is impressed by the wide tree-lined roads and well maintained gardens. Venturing further in, however, the green spaces recede and the road gets bumpy. When we finally reached the El-Motahida plant, the city was a dismal sight.

Within the gates, which are guarded half-heartedly by a few policemen, workers have converted burlap bags into tents. In order to protect their jobs, they have not left the premises since the first of February. Amer explained that, "We presented a detailed plan of how to work the factory profitably," showing us neatly hand-written sheets of paper covered in figures. "We have gone to [Manpower Minister] El-Amawi and to Sayed Rashed [head of GFTU]. So far it seems there is nothing they can do for us. Also, our appeal to have the government take custodianship of the factory was thrown out of court on 30 April," he recounted. Refusing to accept defeat, Amer added adamantly, "We will, however, appeal this court decision and we will not move from our factory until we have been paid in full and our jobs are back."

Workers gathered around us as we speak nod their heads in sullen agreement. The situation at the El-Motahida factory is not unique in this city. Amer informs us that, "As far as we know there are 28 factories which shut down the same way. Workers would leave Thursday evening only to come back Saturday morning and find a lock on the door. They had no rights and there was nothing they could do about it. They had no union committees. Fortunately, we are one of the very few that do, which is why we were able to take action."

It is estimated that out of the 1,200 factories in 10th of Ramadan a mere 17 have trade union committees. A GFTU source who requested anonymity explained to the Weekly that factory owners prohibited workers from organising. The official explained, "To deal with this problem we have started setting up informal committees, but outside the work place. Of course, more must be done." Yet, the prospects for movement in this direction are not promising. The GFTU itself introduced regulations, some years ago, which increased the number of required applicants to create a trade union committee from 50 to 250, which further complicated organisation efforts.

The workers of El-Motahida recount that many of their colleagues in other factories are required to sign a resignation form -- 'form number six' -- before being hired. Such insecurity is the cost of higher wages. "Of course we are lured to the new cities because the money offered is better. In similar industries within the traditional industrial areas, the salaries offered are a third to a half less than here. In 10th of Ramadan an average salary is no less than LE250. But for many of the workers here, you have to sign yourself over to the will of the owner before you can get a job," muttered one of the workers.

The new cities, however, are only one aspect of the changing labour market. Another crucial dynamic is the heavy cuts being made to the size of the public sector. "To date 135,000 workers have been removed from their jobs via the early retirement scheme," explained Hassan Badawi, a spokesman for the leftist Tagammu' Party on labour issues. "That is not counting tens of thousands of workers who have lost their jobs as a result of the closure of certain factories, such as the case of the General Company for Batteries, and the de facto factory shut downs, such as the Misr Helwan Spinning and Weaving Factory. Furthermore, as far as the traditional private sector goes the past year has seen the mass closure of medium- and small-sized aluminum factories in Mit Ghamr and textiles factories in Shubra Al-Kheima. In these cases because legislation is set up in favour of large capital, owners could not keep up."

GFTU and the Ministry of Manpower and Immigration have argued that the formulation of more balanced labour-capital relations can be achieved if the controversial draft Unified Labour Law is passed. The draft has already been in the making for about five years. Drawn up through consultation with representatives of labour, business and the International Labour Organisation (ILO), a final version has yet to see the full light of day. Last May Day was in fact an opportunity for both Minister El-Amawi and GFTU's Rashed, to call on President Hosni Mubarak to expedite the passing of the proposed legislation. A GFTU source told the Weekly that some businessmen were against the draft law because it was in their benefit to keep workers in a state of legal limbo. Even on the side of labour there is some trepidation regarding the possible impact of the new legislation. There are many in the labour movement who fear that the proposed draft will only work against their interests.

But even more pressing than the pros and cons of the proposed new legislation seems to be the fact that labour laws, whatever they may be, are inadequately enforced. In the idle factory grounds of El-Motahida, workers complained that the fine for delayed or even non-payment of salaries was a paltry LE10 a month per worker. Amer lamented, "Even if the official at the Labour Office is conscientious, the sum is so small that owners don't care. The interest made in the bank by the total sum of our salaries in one month would cover the fine and then some. Then, of course, there is the problem of Labour Office employees who are responsible for inspection. These have more to gain from the owners than they have to gain from the workers, and what happens as a result is self-evident."

But what about labour activism. Detailed studies are few and far between. A report issued by the Land Centre for Human Rights, an NGO, documented 164 incidents of labour protest during 1999. Tagammu's Badawi explains, however, that labour activism remains disjointed and defensive. Labour at the moment does not have the organisational power to effect change, argues Badawi who goes on to suggest that the time has come for new forms of labour organisation to meet the requirements of the new economic reality. He notes that, "The current trade union structure represents three million workers out of over 17 million, and as the public sector is broken up so is the base of the GFTU."

Similarly, Mortada argues that although GFTU has promoted a model of labour-capital relations based on negotiation, it does not have the abilities to undertake the role. "How can we talk about negotiations in the absence of independent shop-floor organisations?" questioned Mortada.

Badawi believes that he can outline a new labour regime to which most independent activists would agree. "Before we can talk of laws or a balanced relationship between labour and capital I think that the freedom to form trade unions must be provided without restrictions, as well as the right to strike. In this aspect, workers should have equal rights to businessmen who not only enjoy full freedom of association but can close down whenever they please. General policies must be geared to reduce unemployment which continually pressures labour into accepting wretched working conditions while both social and health insurance must be upgraded and re-structured in ways which would provide real services to workers."

The debate on labour legislation, trade union organisation and employment policy is unlikely to reach conclusive results any time soon. Meanwhile, the workers of the El-Motahida continue their indefinite sit-in on the grounds of their defunct company. Their concerns are at once pressing and far-reaching. In the words of their leader, Amer, "We want to have a future, something to look forward to. So far, that 'something' is very unclear."

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