The migration of skilled labour can relieve demographic pressures, but it will never be the answer to employment challenges in the region, Sherine Nasr reports on a study released this week and interviews the director of the International Migration Programme of the ILO In an exclusive interview, Ibrahim Awad, the director of the International Migration Programme of the International Labour Organisation (ILO) gives insight into labour migration trends and the challenges of improving labour conditions in Egypt. You believe that the dependence of an economy on foreign remittance is a negative sign. Why? It is not necessarily a negative or a positive sign. There are positive consequences of remittances, as they reduce poverty and improve spending on education and healthcare. Thus, remittances contribute to human capital formation for the development of any country. They are also good for the balance of payments. But we should not consider remittances as the solution, or the resource that should be promoted by the country. There is a lot of research that shows that remittances do not really result in economic growth. In some countries, remittances represent 30 or 40 per cent of GDP. Fortunately, Egypt does not excessively rely on remittances. They stand for almost six per cent of the total GDP. So, it is within safe limits. Southern Mediterranean countries have been arguing for receiving compensation for the brain drain of their skilled labour to the EU. Will such demands materialise into something more concrete? The idea has been around for quite some time now, not with regards to the South Mediterranean countries but to all developing countries at large. However, as international relations stand today, it would be very difficult to imagine countries of destination accepting the principle of compensation. Does Egypt have enough data on its labour market and labour migration? Very few countries have that. Statistics of international migration are very poor in the majority of countries. There is no complete data in Egypt and information is lacking on migrants from Egypt, their volume, destinations, wages and occupations. We at the International Labour Organisation have worked with Egypt on enhancing available data. How has Egyptian labour migration developed through the last decades? Labour migration started in the 1950s, mainly to Arab countries such as Kuwait, Bahrain and Saudi Arabia, expanded in the 1970s to other Gulf Cooperation Council (GCC) countries, and then to settlement countries like the US, Canada and Australia. Egyptian labour migration is essential to the Gulf countries, subsidiary to Europe, while migration to settlement countries presents a very specific situation. What is the impact of the present financial crisis on the movement of Egyptian labour to other countries? The crisis has not hit the GCC region as it has hit Europe; therefore, labour demand in the GCC region has not declined as it has in the EU. One reason is because GCC countries accumulated large financial reserves in recent years when oil prices were very high and, thus, could use it to sustain demand. So they did not have large movements of return, neither to Arab countries such as Egypt or Asian countries such as Bangladesh, Pakistan and the Philippines. Indeed, Egypt saw an increase in remittances during the first quarter of 2009, though they have now declined. In other Asian countries, remittances have actually increased. But in Europe, the case is different. People have lost their jobs and their remittances are less. While unemployment in Egypt causes the government a headache, businessmen often complain about the scarcity of skilled labour. Does that sound paradoxical? Yes, of course. It is not only a question of high unemployment but of the lack of social protection for those who are unemployed. A large segment of persons employed also work for small amounts of time and get low incomes. This is a major problem in the employment sector. As for skills, of course there is a lack of skills, but there is also a lack of sufficient demand for skills. Unfortunately, the economy operates at a low level of technology, a low level of value added and productivity; therefore, there is no demand for high skills. And this is why the educated are unemployed because there is no need for them. The question even goes far beyond that. There is no expenditure on scientific research to produce good education and, thus, high quality skills. What are the major challenges the government faces with regards to labour within the next decade? A major challenge is to create enough jobs, upgrade present employment and improve the quality of working conditions. On top of all is to have policies that would enable people to create jobs for themselves and the economy independently.
