Friday,20 October, 2017
Current issue | Issue 1127, 20 - 26 December 2012
Friday,20 October, 2017
Issue 1127, 20 - 26 December 2012

Ahram Weekly

Unfulfilled promises

With its primary chant “Bread, freedom and social justice”, many expected the poor to be the main beneficiary of the revolution. --Read More--

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Al-Ahram Weekly

With its primary chant “Bread, freedom and social justice”, many expected the poor to be the main beneficiary of the revolution. Since 2005 they have been promised they would soon feel the trickle down effect of a fast growing economy. Today, two years after the revolution, the poor are still waiting.
The revolution not only added to the hardships of the needy but also made the life of other segments of society harder. Sherine Abdel-Razek talks to a businessman, a worker and a housewife on how their economic welfare has been affected by revolutionary upheaval.

Then came the revolution

For Noha, a 30-year-old housewife, the revolution was a great achievement for Egyptians.

“I never cared about politics, but the chants of ‘Bread, freedom and social justice’ and the images of young martyrs moved me, and I was euphoric when the people succeeded in toppling the regime.”

Starting at this point, when politics intersected with economy — with her household income — Noha became more involved in politics.

Married soon after graduating seven years ago, Noha and her husband Sameh, a tour guide, decided she would not work. “Sameh’s income back then was very good and we never thought we might need another breadwinner in the house.”

“Tourism was good in our first years of marriage,” Noha says, “and Sameh was working all the time. He used to spend three weeks on average each month in Sharm El-Sheikh with tour groups. He used to earn triple, sometimes quadruple, his salary in tips from groups or as a special bonus from the company when they had extra work,” Noha said.

Sameh, who speaks English, French and Spanish, used to give Noha LE6,000 on average per month for house expenses and to pay for instalments of a small Chinese- made car he bought for her.

Noha remembers that they paid the last instalment of the car in November 2010 and were planning to start saving to go to Turkey in April 2011. “It was a dream. It would have been my first ever trip abroad.”

Then came the revolution.

“We were not worried during the first 18 days when Sameh were not working as we understood that it was only temporary,” said Noha. However, things started to get bad. “In the following six months, Sameh worked for only six weeks.”

Noha adds: “Each time he goes to Sharm or takes a group to the Pyramids he returns back depressed, talking about fewer number of tourists, less tips and more worries.”

By October 2011, the travel agency Sameh worked for decided to close its doors after two months with no reservations at all.

This was the hardest time in Noha’s life, and in addition she was pregnant with her second baby. The pregnancy saw many complications and Noha was worried she could not afford the cost of a cesarean birth. “We sold the car at 65 per cent of its purchase value because we had no other choice.”

“In the following months my mom came to stay with us to help with the household expenses. Sameh’s mother, a retired engineer, used to give him LE500 each month from her pension.”

“Imagine that I used to pay LE120 monthly in diapers and LE80 to give Hassan, my elder son, daily pocket money for the kindergarten.”

Cooking was the only thing Noha knew, so she decided to start a small catering project. She put together a menu of dishes she is good at cooking and spread the word among family and friends.

The idea was good, but “with two kids, a sick mother and depressed husband around, you can’t deliver the dishes ordered every day. Also, it became a very competitive field and I neither had the experience nor the means to have an edge.”

She needed a larger fridge to keep the cooked dishes in. She needed someone to help and someone to deliver the dishes to those who ordered them. She could not afford all of the above. So five months later, she quit.

Sameh, who never gave up trying to find a job, worked on a freelance basis as a translator, but the income was little and inconstant.

One day, a friend of his friends living in Qatar told him they need a salesman in a car dealership in Doha. He took the job.

“The salary is not high, but we had to take the offer. We did not have the luxury of waiting for a better one.”

Sameh sends Noha LE3,000 at the beginning of each month. She saves LE1,000 and spends the rest.

“Life got more expensive. Even if the prices are the same, the volume of the packages got less. I feel it even in powdered baby milk.”

Last month, Noha could not save money because Hassan got an infection and she had to take him to a doctor who gave him a course of six shots at LE100 each. Neither Noha nor Sameh has medical insurance.

The revolution turned Noha’s life upside down, one outcome being that she follows politics everyday.

“I do it in the hope that things will settle down one day, and tourism will get better and Sameh will come back. I want him to enjoy watching his kids growing up.”

 

‘Wait and see mood’

Just five months before the revolution, Alaa Arafa, CEO of Al-Arafa Investments and Consulting, Egypt’s largest garments exporter, told Bloomberg news agency that he planned to triple production capacity of luxury suits in three years.

Less than a week ago, Arafa, whose factories in Beni Sweif and 10 Ramadan City supply international stores like Debenhams, Banana Republic, Zara and Massimo Dutti with high end suits, told Al-Ahram Weekly that for him the thought of injecting new investment into the country now is “second to impossible”.

For Arafa, it is not simply a matter of a less favourable business atmosphere due to political instability following the revolution, but that “Egypt lost all that it takes to make the atmosphere business friendly, even to locals.”

“When local businesses are reluctant to expand and there are no start-ups in a country, then there is a huge problem and you have to be sure foreigners will shy away as well,” Arafa laments.

““e have not only shelved expansions but also downsized due to recurrent strikes and instability. This is making our customers abroad really worried.”

Despite what Arafa calls “exceptional efforts” the group’s nine months results for the period ending 31 October 2012 showed revenues declining by a 6.9 per cent compared to last year to reach $192.18 million. Whereas net profits were $ 5.32 million versus $5.67 million recorded during the comparable period a year earlier.

The gravity of the situation, according to Arafa, can be crystallised in one sentence: “If I need to buy a piece of land to expand my business, I don’t know which state body I should address.”

A doctor-turned-businessman, Arafa diagnoses the main problem as a lack of vision by a below-par cabinet wed to ambiguous policies.

“We have no clear tax or monetary policies. We have a widening budget deficit and dwindling currency price and we don’t have a plan to deal with any of these problems,” said Arafa.

Political unrest has been overshadowing the economic scene since the revolution. With the drainage of foreign currency due to a slowdown in foreign direct investment, tourism and exports, Egypt’s reserves have been on the slide, making it impossible to protect the local currency against the dollar. Egypt last week lost a chance to get a $4.8 billion loan from the IMF after social unrest pushed the government to withdraw tax increases just hours after announcing them. The new taxes were part of a reform programme seen as a prerequisite to get the loan.

Moreover, since the revolution, consecutive governments lack the skills to deal with investors. “Look at the number of investment contracts annulled after the revolution. This conveys a very negative message about the investment atmosphere,” said Arafa.

There are currently eight cases against Egypt in the Washington-based International Centre for Settlement of Investment Disputes regarding contracts sealed before the revolution subsequently scrapped by local courts.

Also, the revolution emboldened a series of strikes and sit-ins by workers expecting to see their rights realised.

Each of Arafa’s three factories witnessed two strikes since the revolution.

“None of it lasted long because we never gave in to any of the demands raised during the strikes. Our workers’ salaries and working conditions are already good.”

For a strike to be legitimate, according to Arafa, it should be for better conditions for workers and not to grant some workers fake positions of leadership.

“Some workers are trying to make use of the revolutionary spirit to name themselves leaders among their colleagues. To be leaders they start strikes to grab unjustified new privileges.”

Arafa points out that this tendency is prevalent among Islamists, evident — he says —in strikes taking place in his plants.

Arafa did not abruptly sack workers who incited the strikes but did not renew the contract of those who proved to be causing problems.

And while forming independent trade unions in factories became the trend since the government acknowledged freedom of association as a right in March 2011, Arafa has reservations. Having a properly formed trade union is in the favour of the factory administration as it finds a body to negotiate with on the obligations and rights of workers, Arafa said. The problem is that most workers are not aware of the way such unions work.

“They don’t even organise strikes according to the law, which obliges them to inform the factory before the strike and have it outside the factory premises.”

Ascending anti-Israeli sentiment after the revolution was seen by many observers as a potential threat to the Qualified Industrial Zones (QIZ) agreement that allows Egyptian producers zero-tariff entry to the US market provided their products contain at least 10.5 per cent of Israeli materials. These fears escalated after Cairo decided to cancel its gas export deal with Tel Aviv.

Arafa’s factories are in provinces included in the QIZ agreement, which according to Hatem Saleh, Egypt’s trade minister, covers 700 Egyptian factories employing together more than 100,000 workers and exporting $1 billion worth of textiles in 2011.

While talks about including more provinces in the accord were put on ice after the revolution, Arafa says no one talked with him formally or informally about the protocol or changing it. “It is still enforced with regular quarterly revisions.”

What does Arafa plan for the future? “I am taking it one day at a time. I go to work each day not to produce but to solve problems.”

Amid such an atmosphere, “one can’t plan for tomorrow or for future investments, neither here or abroad. We are in wait and see mood,” he concluded.

 

Aspiring for more

 

The hike in the number of labour strikes and protests in Egypt since 2004 was one of the main indications that unrest was reaching its peak and revolution was coming.

An estimated two million workers participated in around 2,000 factory sit-ins, strikes, demonstrations and protests in the six years leading to the revolution, according to reports by NGOs like Solidarity Centre. For the past several years, Egypt has been on the International Labour Organisation (ILO) list of 25 countries with the worst labour conditions.

Industrial Sadat City, a manufacturing city located 100 kilometres west of Cairo, was one place where the anger of workers was heavily suppressed. Including two of the factories of business tycoon and former leading National Democratic Party (NDP) figure Ahmed Ezz’s factories — Ezz Steel Rebars and Gemma Porcelain — the city’s worker movements were very much contained under close police scrutiny.

Saad Shaaban, head of the Federation of Sadat City Independent Trade Unions (FSCITU), recalls that factory owners used to resort to the State Security apparatus to abort worker attempts to form strong trade unions to protect worker rights. The almost 90,000 workers in the industrial city were represented by only two trade unions affiliated to the Egyptian Trade Union Federation (ETUF). The problem with ETUF was that its head was chosen by the government, which led to nepotism and a reward system based on personal relations. “The ETUF served the government and business interests and did not represent us,” said Shaaban.

Then came the revolution. “We had many aspirations and expectations and the first days were very promising,” Shaaban recalls. Ahmed Al-Borai, an advocate of labour rights and minister of manpower and immigration in Essam Sharaf’s cabinet, staunchly supported freedom of association as a right for workers in Egypt. A government statement in March 2011 acknowledged the right of labour to form trade unions independently from the EFTU. A draft law regarding the rights of labour unions was issued, but is yet to be ratified.

“Now we don’t need the approval of the companies administration to form unions, and we can have a number of unions in the same factory as long as we register them with the Ministry of Manpower,” Shaaban says.

Since the revolution, 24 independent trade unions were formed in Sadat City. Out of those, 18 trade unions joined efforts and formed FSCITU.

In the year and half following the revolution, FSCITU helped resolve many problems and regain and defend what Shaaban calls legitimate worker rights.

Shaaban gives the strike in the Mega Textiles factory as an example. The Turkish owner, according to Shaaban, laid off many workers and prevented them from entering the factory and he even had beaten one of them. Among them were members of the factory’s independent trade union demanding better working conditions and equal treatment with Bangladeshi and Indian workers in the same factory regarding salaries and other benefits.

“We [members of the federation] insisted that the laid off workers return to the factory and when he refused we joined forces and broke into the factory’s premises, held negotiations and the workers returned back to work.

The FSCITU has a headquarters where weekly meetings are held. It organises workshops aiming at raising the awareness of workers of their rights and improving their bargaining skills with company owners.

However, trade unions are still facing problems as businessmen so far do not deal with them as legitimate bodies, mainly because the law authorising their formation has not yet been ratified.

Shaaban argues that the current regime is not working in favour of labour. In mid-2011, the cabinet approved a decree law criminalising business-disrupting sit-ins and protests. According to the law, the punishment accorded to those responsible for halting production in a strike that does not comply with certain criteria reaches one year in prison or a penalty of LE500,000. Last month, five workers in a shipping company were sentenced to three months detention for staging a strike in Alexandria.

Indeed, cases of detention and imprisonment among workers are on the rise since current Minister of Manpower Osama Azhari came to power. “Now we see the members of the independent trade unions being punished by sacking them. This was not the case with the two other ministers that came to power since the revolution and before the nomination of Azhari,” Shaaban said.

Being the ruling party, members of the Muslim Brotherhood attending negotiations between union and factories owners tend to push for rushed and unfair compromises just to give the impression that everything is going well under their rule, said Shaaban.

However, this does not seem to be stopping the tide of protests as estimates put the number of strikes so far in 2012 at 12,000. “It is true that after the revolution we have more freedom to ask for our rights, but the point is that we still haven’t got most of them,” said Shaaban.

 

 

 

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