The new government, sworn in on Saturday, takes office as a fresh wave of labour unrest sweeps an already ailing economy. More than 20,000 workers at the state-owned Mahalla Spinning and Weaving Company have been on strike for 12 days, demanding the payment of overdue bonuses, the application of the minimum wage and the dismissal of the chairman of the Holding Company for Spinning and Weaving. While a strike by 38,000 bus drivers ended last week postal workers in many parts of the country remain on strike. Doctors, pharmacists and steel workers have all taken industrial action in recent days. Kamal Abbas, General Coordinator of the Centre for Workers and Trade Union Services, (CWTUS), slams the fact that the new Prime Minister, Ibrahim Mehleb, has so far failed to address workers grievances but “instead said all strikes should be called off”. Hopes had been pinned on Kamal Abu Aita, a veteran labour activist, who served as minister of manpower in the outgoing government. “But Abu Aita's performance as labour minister,” Abbas told Al-Ahram Weekly, “was the worst since the 25 January Revolution”. Abbas charges that Abu Aita used his position to settle old scores with several unions, freezing the funds of some of them. “He interfered in a way that we didn't even see under Mubarak,” claims Abbas. The new government, adds Abbas, will have to address four basic issues which its predecessor failed to tackle. It must alter the current selective approach to paying the minimum wage set by the government last year at LE1,200 and which came into effect in January, covering only workers directly employed by ministries. The minimum wage could cost $2.5 billion a year according to outgoing finance minter Ahmed Galal. The government must also create an effective negotiating mechanism with the workers, address the multitude of problems facing the public sector and act on court rulings that have annulled a host of privatisation deals. Abu Aita is replaced in the incoming government by Nahed Al-Ashri who has spent 30 years working at the Ministry of Labour and Immigration. The new minister has said that facilitating negotiations with all disputants is her top priority. Disputes over the minimum wage have spread to pensioners who are demanded a similar sum to replace existing pensions which currently stand at less than LE500 a month. A number of pensioners have threatened to stage an open-ended hunger strike to get their demands heard. Ghada Wali, the incoming minister of social solidarity who has served as managing director of the Social Fund for Development (SFD) since 2011, says reviewing the pension system is one of her top priorities. The widespread economic gloom has been compounded by natural gas shortages that are hampering electricity generation. Daily power cuts across the nation are now the norm. There is also a gaping budget deficit and a huge subsidy bill. Both desperately need to be reduced. “Addressing and solving all these challenges is contingent upon achieving political stability,” says Amr Adli, post-doctoral fellow at Stanford University and former director of the economic and social justice unit at the Egyptian Initiative for Personal Rights (EIPR). Moving towards economic recovery and solving the current economic stalemate, says Adli, will rely heavily on the political mandate of Egypt's upcoming administration. The new economic team, he points out, are well-known technocrats in their fields and “technocrats are necessary in government” but they cannot solve all the existing problems unless they are given the power, and room, to manoeuvre. Adli feels it is far too early to assess the performance of the Al-Beblawi government which was took office in exceptional circumstances. “ I don't think there was space measured economic policies following the forced dispersal of the pro-Morsi sit-ins in August last year,” he says. The government was crippled by the complexities of the political situation and is unlikely to have had a mandate to take the kinds of tough economic decisions that were needed. Adli believes it is unfair to blame the current wave of unrest on Al-Beblawi's government. Labour problems, he says, have been growing ever more chronic since at least 2004. Adli is critical, however, of the selective implementation of the minimum wage and of the outgoing minister of labour's failure to communicate with workers. A report by the ministry of finance on the outgoing government's performance in the first half of the financial year 2013/14 revealed that economic growth had slowed down to 1 per cent in the first quarter of the financial year. Unemployment grew to 13.4 per cent in the first quarter compared to 12.5 per cent in the first quarter of the previous year. While the report concluded that the first stimulus package had been insufficient to boost economic performance it did detect some positive signs of economic recovery, not least an increase in November's industrial growth rate, a slight improvement in the tourism sector and a 2.2 per cent reduction in the budget deficit in the first half of the year.
