Sending Egypt's youth abroad will not address pressures within the domestic labour market, writes Magda Shahin* Unemployment is a symptom of a deep-rooted structural malaise in our economy. This is one of the straightforward conclusions of a conference held by the Trade Related Assistance Centre (TRAC) of the American Chamber of Commerce, in cooperation with the Egyptian Ministry of Manpower and Immigration, at which the minister of manpower and immigration was the keynote speaker. Unlike at other conferences, the topic of education -- though not forgotten -- was the least spoken of, as the mismatch between supply and demand, the informal sector and the lack of coordination between relevant ministries took pre- eminence. For TRAC, the impetus to organise a conference on labour was initially borne of ongoing negotiations with the European Union on liberalising trade in services and was envisaged to assist negotiators in taking advantage of the potential of exporting Egyptian labour -- an underexploited means to help alleviate pressure on the domestic job market. However, it quickly became apparent that this goal was not practicable. The minimum conditions necessary to make the exporting labour valuable -- a prepared and highly competitive labour force -- are absent. It seems that there is a labour crisis plaguing Egypt that runs much deeper than mere unemployment. A closer look reveals that while there is an abundance of labour, the multitude of the Egyptian workforce lacks the knowledge and technical expertise that the market demands, both internationally and locally. The focus of the conference then shifted, yet we could never have imagined how timely this would all prove to be. The reality of negotiations with the EU reflects the current reality of most multilateral negotiations: they have entered a period of stagnation. As a welcomed breathing space, this state of affairs buys us much needed time upon which Egypt can capitalise so that when the storm of the global economic recession begins to clear we will have prepared ourselves and enhanced the competitiveness of our human capital, a core comparative advantage. Whilst not attempting to deny the complexity of the labour problem, we can say that there are four central features of our human resource challenge. First, the aforementioned mismatch between supply and demand, known as structural unemployment. Second, an expanding youth workforce. Third, the informal sector. And fourth, a lack of coordination that serves to exacerbate all the aforementioned problems. Structural unemployment produces a deficit on both ends of the employment spectrum. It is not merely characterised by an absence of appropriate skills in the workforce, which can be remedied relatively easily with well-designed training; it is also characterised by a particular cultural attitude towards work. From the perspective of the employer, there is both an absence of well-trained workers and of workers who are willing or able to abide by a minimum standard of work ethics. Currently, there are approximately 600 vocational schools in Egypt. This figure might be considered too many or too little, depending on how one sees the problem and its solution. But the concern is not in numbers. The analogy can be made with an overabundance of hospitals lacking beds, machines or medical supplies, or an excess of school buildings without benches, blackboards or teachers. By the same token, what purpose would 600 vocational schools serve if the majority suffers from a lack of proper equipment, proper curricula and proper training programmes to deal with technological innovations and constant evolutions in industry? It is essential to avoid cosmetic solutions that result in nice photo opportunities, like shiny new hospitals that can't address the needs of their patients. Rather, the problem of training must be tackled with honesty and with urgency. On the cultural level, an even more hazardous and deeply entrenched problem in Egyptian society is a lack of minimum work ethics manifested in tardiness, absenteeism and carelessness. There seems to be a cultural attitude towards work that no longer recognises its intrinsic value . Moreover, cultural norms that place training schools and universities in a hierarchy of value or prestige suggest that a new way of thinking about work must be fostered. Both morale and perceptions of the value of work exacerbate the structural employment problem. The second central feature of the human resource challenge is an ever-expanding workforce. There is an annual increase in the workforce of three per cent and the share of the new unemployed is consistently on the rise. Some 80 per cent of the unemployed are first time job seekers who are increasingly university graduates or those of specialised vocational schools. This persistent growth of the workforce will likely be aggravated by the present economic crisis, when global layoffs usher in waves of returnees in addition to the increased number of layoffs domestically. Perhaps indirectly related to the growth of the labour pool has been the growth of the informal sector, which now constitutes one third of the Egyptian workforce. Over 70 per cent of jobs come from the informal sector and the share of non-wage workers is steadily on the rise. While this might seem like a convenient way of alleviating pressure on the domestic labour market, the fact is that a lack of regulation in the informal sector produces losers on all sides. Consumers have no protection (eg, no guarantee that any type of standard is applied in the production and/or preparation of food); producers or workers have no protection (eg, no minimum wage guarantees or ceilings on the amount of hours worked in a week); and the state is not able to provide protection nor can it generate revenue (eg, from contaminated food and faulty products through taxation, job generation, and returns to the economy in general). Last but not least, there is the core problem of coordination, which exists at all levels. This problem cannot wait any longer. It is because of the lack of coordination that we have this structural unemployment, that we have such a high percentage of unemployed graduates, and that we have an informal sector with unbridled growth. Coordination between the private sector and the public sector, vocational schools, training centres, statistical bodies such as CAPMAS (Central Agency for Mobilisation and Statistics) that chart trends in unemployment and the labour market, and within the public sector between the multitude of ministries dealing with unemployment in a piecemeal fashion, must be achieved in order to implement effective solutions. These four central problems are certainly not new but they have not been addressed properly or seriously and as a result have ballooned. Now it will take considerably more time, more effort, and more finances to address them. There is no time for complacency and the strategies we implement now must take into account all the problems without embellishment. Above all, we need strategies that do not retreat from calling spade a spade or dealing with the deep-rooted problems at hand. * The writer is director of the Trade Related Assistance Centre of the American Chamber of Commerce.
