High levels of unemployment are one of the most pressing problems facing Egypt today, with the country’s unemployment rate standing at 12.6 per cent in the third quarter of 2016, according to the Central Agency for Public Mobilisation and Statistics (CAPMAS). The problem is most acute among young people.
Director of the International Labour Organisation (ILO) Decent Work Team for North Africa and the ILO Country Office for Egypt and Eritrea Peter Van Rooij spoke to Al-Ahram Weekly about how the government can address the issue.
Where do you think the government should start in addressing Egypt’s unemployment problem?
I think over the last couple of years a lot of good work has been done, but at the same time when you have profound challenges, some of which Egypt is coping with, it takes a lot of time to address some of them. One of the first things to do, at least from a labour and employment perspective, is to aim for growth that is job intensive and that creates jobs, something that we are working on with the Ministry of Planning.
We have seen so many countries where there is good economic growth, but a very limited number of jobs is created, so it is important for Egypt to have economic growth that can generate jobs. One of the biggest challenges that can turn into an opportunity is youth unemployment through planning and creating an enabling environment for investment. Now with the International Monetary Fund (IMF) package and the floatation of the Egyptian pound, there are a lot more investment opportunities, but it is important that these opportunities are directed towards the sectors where jobs are created.
It is also important to see how vocational training and education can better prepare Egyptian youth for the labour market. The irony in Egypt is that there are vacancies in some sectors, but it is not easy to find qualified workers to fill them. Moreover, in order to understand the unemployment situation, you should look at the informal economy, the unemployment of youth and gender unemployment. In North Africa, including in Egypt, women’s participation in the labour force is the lowest in the world at about 23 per cent. One study by an international consultancy company that looked at several countries, including Japan and Egypt, calculated that by better involving women in the economy GDP could increase by around 35 per cent.
Egypt has long seen a mismatch between education outcomes and labour market demands. How can the country bridge this gap?
There are a lot of good projects taking place to bridge this gap, but it is important to implement them on a large scale and across the country. If you want better education, you have to invest in the whole institution and that will take time.
A culture of entrepreneurship should also be encouraged. In North Africa, including in Egypt, there is a relatively low number of people who are self-employed, so there is a lot of space for self-employment and as an extension for small- and medium-sized enterprises (SMEs).
How many young people are considering opening their own business? What the ILO has been doing in many countries, including in Egypt, is introducing a module in schools which we call “know about business” to encourage an entrepreneurial culture. In Egypt, this needs to be scaled up and to be better integrated into the educational system.
You have worked in Indonesia where conditions are similar to Egypt. Are there success stories from Indonesia that Egypt could emulate?
I have been lucky in coming to Egypt from Indonesia because both countries share a lot of things together. Indonesia has done well in some issues, such as youth employment, social protection and skills training. So it would be interesting to share this experience with Egypt. At the same time, Indonesia can benefit from Egypt as well. I see it as mutual learning: it is no longer a one-way learning process. It is also important not to copy and paste, but to be inspired and adapt.
The challenges that Egypt is facing now are very similar to those Indonesia was coping with in 1998 after its revolution. Progress takes time, especially if you want to see structural changes. When you look at Indonesia now, almost 19 years later, you will say that it is doing well, but it has been 19 years of investment with everybody on board. I think Egypt has made great progress, including by approving the new constitution. It is also making good progress on social protection as this is part of the bigger picture of decent work for all.
Training for employment
IN A BID to generate jobs and increase the employability of young people, the AlexBank, the Professional Development Foundation, the Sawiris Foundation for Social Development (SFSD) and the International Labour Organisation signed a memorandum of understanding this week to launch a Youth and Women Socioeconomic Empowerment Project targeting women and young people in Upper Egypt.
The project aims at facilitating work opportunities for 1,600 women and young people in rural and disadvantaged areas, helping to give them access to productive employment, decent work and income opportunities.
Noura Selim, executive director of the SFSD, said the project aimed to train 1,200 women and young people in basic skills to help facilitate their employment in large companies. “We aim to link young people to large companies so that they can work in marketing these companies’ products in the governorates targeted by the project,” Selim told Al-Ahram Weekly.
Another 400 opportunities will be offered to students who will be trained in entrepreneurship and leadership skills, after which they will receive loans to help them start their own small projects. The project will also target the training of 40 NGOs to help them build their capacities so that they can effectively implement it.
The project was chosen to take place in Upper Egypt because this area suffers from high poverty rates compared to Egypt’s big cities. It will be expanded to other areas should it show signs of success, Selim said.