Could the current economic situation push an already soaring unemployment rate any higher, asks Nesma Nowar The Central Agency for Public Mobilisation and Statistics (CAPMAS) last week announced that Egypt's unemployment rate has risen to 11.9 per cent in the first quarter of 2011, up from 8.9 per cent in December 2010. This figure is the highest in 10 years. In a press conference last week, Abu Bakr El-Guindi, head of CAPMAS, stated that out of the total workforce which exceeds 26 million people, 3.1 million are jobless. El-Guindi attributed the rise to the political unrest the country has witnessed and its negative impact on economic activities. Hamdi Abdel-Azim, professor of economics at Al-Sadat Academy for Administrative Sciences, stated that this figure is justified. He explained that there are a lot of people who lost their jobs due to the events of the 25 January Revolution. He pointed out that the market is currently stagnant due to a slowdown in commercial activities. This situation urged many business owners to lay off their workers. "Some 60 factories have totally been shut down," Abdel-Azim told Al-Ahram Weekly. "The bankruptcy rate has increased by 108 per cent in 2011 compared to last year." Abdel-Azim stated that the Egyptian workers who returned from Libya, Tunisia, Yemen and Bahrain, due to political unrest, have been added to the millions of the unemployed registered by the government. According to the Ministry of Foreign Affairs, over 180,000 workers returned from Libya by 10 March. In order to avoid unemployment, Abdel-Azim pointed out that Egypt needs to create 850,000 job opportunities annually, when only 450,000 job vacancies are actually created. "The Egyptian returnees have made the situation worse, constituting a further burden on the government to create more jobs," he said. Meanwhile, Abdel-Azim does not expect the unemployment rate to rise any further during this year. He said he believes that the coming period will witness a boost in the investment sector. "Britain will invest 11 billion euros in the petroleum sector, and Arab states like Saudi Arabia and Qatar are willing to support investment in Egypt," he said, adding that such investments would create many job opportunities that could compensate those who have lost their jobs during the revolution. Abdel-Azim further stated that Egypt would be more stable over the coming period, after holding the parliamentary elections, which would create a sense of political stability, and therefore a better economic environment. Sayed Ragab, head of the Egyptian Centre for the Reduction of Unemployment and Defending Human Rights, agrees with Abdel-Azim over an expected increase in the investment flow to Egypt during the next period. He said he became optimistic after Prime Minister Essam Sharaf's recent Gulf tour and the Arab states' tendency to support and invest in Egypt, as well as the G8 leaders' pledge to offer some $20 billion in aid to Egypt and Tunisia. However, he stressed on the importance of restoring law and order as being crucial for the investment flow. Egypt is suffering from a security vacuum caused by the withdrawal of the whole police apparatus during the 25 January Revolution. "Without law and order, not only unemployment would increase, but the whole country would be in shambles," he noted. Egypt has been suffering from unemployment since the 1960s. The state has always failed to embark on practical measures to overcome it. However, after the 25 January Revolution, unemployment should be tackled in a different way as it was a major factor that contributed to the people's discontent which led to Egypt's uprising that toppled president Hosni Mubarak's regime. Most of Egypt's unemployed population are young people and bachelor degree holders. According to CAPMAS, unemployment rates are highest amongst the younger segment of the population. Nearly one in two jobless Egyptians are between ages 20 and 24, while one in four are between 25 and 29 years old. In a press conference last Monday, Ahmed El-Borai, minister of manpower and immigration, said that CAPMAS has stated that the unemployment rate is 11.9 per cent, neglecting the fact that this figure increases to 45 per cent among youth. He added that one of the main targets of the revolution is achieving social justice and eradicating poverty. "We cannot achieve social justice unless unemployment is eliminated," he said. El-Borai further stated that LE2 billion is to be allocated in the government's coming budget of the fiscal year 2011/2012, in order to establish the Training and Unemployment Fund. This fund will be responsible for bridging the gap between education outcomes and job market demands by equipping youth with key essential skills necessary to be able to join and compete in the job market. In a bid to reduce unemployment rates, the press conference has witnessed the launch of a joint project between the International Labour Organisation (ILO) and the Canadian International Development Agency (CIDA) on "Decent Jobs for Egypt's Young People: Tackling the Challenge Together". The project aims at creating decent work opportunities for young people, aged 15-29, especially for young women and other vulnerable groups who find it hard to get access to appropriate opportunities. The project would be implemented in three governorates which will be selected through a competition. The ILO and CIDA will work on this project along with the Ministry of Manpower and Immigration, other relevant ministries, Digital Opportunity Trust (DOT), a leading social enterprise headquartered in Canada, governorates and young people. El Borai stated that Australia also would support this project in some governorates which are not selected yet. Employment conundrum THE GOVERNMENT is considering a minimum wage in Cairo and Alexandria that is different from other governorates because the cost of living is higher in both, the capital and the coastal city, said Egyptian Minister of Manpower and Immigration, Ahmed El-Borai, this week. Speaking during a press conference organised by the German Arab Chamber of Industry and Commerce (GACIC), El-Borai said the minimum wage should ensure a decent life for everyone. He added that Egypt is witnessing a strange phenomenon which is the rising unemployment rates, yet companies complain about having difficulties in finding employees for many specialisations. "There should be more attention to vocational training. It is the only way to meet the market demands for those specialisations," he noted. El-Borai also stated that the government has agreed to allocate LE2 billion in its budget for fiscal year 2011-2012 for a vocational training and unemployment fund. During the course of vocational training, he added, trainees will receive half the amount of the minimum wage that will be announced sometime this month as unemployment benefits. "There are approximately 3.5 million foreigners who work in Egypt, and only 250,000 of those have work permits," El-Borai said, adding that from now on, there will not be any work permits for foreigners in Egypt unless they will fill in a position in which no Egyptian can fill. The maximum limit for foreigners in any institution, according to the ministerial decree, is 10 per cent of employees. Foreign companies will be exempt from that decision.
