Political unrest in the Middle East and North Africa (MENA) region may affect the labour market and unemployment in Egypt, analysts say. The return of thousands of Egyptian expatriates from Libya and Gulf countries is seen to add more pressure on the country's economy, which has been bleeding since the eruption of the January 25 revolution that ended Hosni Mubarak's 30-year regime. Analysts expect a loss of LE2 billion ($339 million) as around 7 million Egyptians return from the MENA region. "Egyptians' remittances average LE8 billion annually. The loss of this resource will push up food prices and unemployment," says Rashad Abdo, a professor of economics at Cairo University. Around 1.5 million Egyptians are escaping from war-torn Libya. Egypt's unemployed stand at 2.3 million, according to the State-run Central Agency for Public Mobilisation and Statistics (CAPMAS). Unemployment in Egypt hit 9 per cent of labour force in 2010, also according to CAPMAS. But unofficial reports say that unemployment stands at 15-20 per cent. "Egyptian investments in Libya will be affected too, reducing revenues and putting more pressure on the economy. If the unrest reaches Saudi Arabia, more Egyptians will be returning," Abdo explains. Egyptians' remittances are an important resource for the country's balance of payments, according to Hamdy Abdel-Azim, a former Chairman of the Sadat Academy for Management Sciences. Abdel-Azim called for creating new markets for returnees from Libya, in countries like Greece and Italy. Egypt's balance of payments is seen to post a deficit of $3 billion in the first quarter (Q1) of 2011, according to the Central Bank of Egypt. The country's State budget deficit is forecast to widen to 8.5 per cent of GDP in the fiscal year (FY) 2010/2011 from 7.9 per cent in FY 2009/2010, according to the Ministry of Finance. Egypt's fiscal year begins on July 1. Abdel-Mottaleb Abdel-Hamid, professor of economics and the incumbent Chairman of the Sadat Academy for Management Sciences, stresses the need to boost small and medium-scale enterprises (SMEs). "Long-term development projects like the Toshka Project in Upper Egypt and the Development Corridor need to be expedited,” he argues. The Development Corridor is a long-term national project brainstormed by Egyptian-born geologist Farouk el-Baz more than 25 years ago. El-Baz believes this project will "change the face of Egypt" by creating 200 cities and around 500,000 villages in the Western Desert. The Development Corridor project includes a 1,200km superhighway to be built from west of Alexandria to the southern border of Egypt, as well as 12 east-west branches, with a total length of approximately 800km, linking the highway to high-density population centres, a railroad for fast transport parallel to the superhighway, a water pipeline from the Toshka Canal and a power grid to supply electricity.
