Neighbors / Let My People Work

Post-upheaval Egypt is having trouble creating jobs or feeding its hungry, a reality worsened by an influx of returnee workers fleeing Libya who will add to the swelling ranks of the unemployed.

The border crossing between Egypt and Libya at Salum is filled with thousands of Egyptians trying to return home. The dozens of buses which the Egyptian authorities have sent there to bring frightened Egyptian citizens back cannot cope with the demand. The fleeing Egyptians are trying to hitch rides to safe refuges however they can and are leaving behind their money and possessions.

During the first two days of the riots in Libya, close to 60,000 of the 1.5 million Egyptians who work in Libya crossed the border. In the Egyptian media, one can see pictures of Egyptian citizens crossing on foot with only a blanket and a basket of necessities in their hands, while on the Egyptian side their family members wait to receive them and drive them home.

Libya border

However the main problems facing these Egyptians citizens and their government still lies ahead. Those escaping Libya will need to find employment in Egypt, not an easy prospect.

Egyptian workers in Libya used to send some $250 million home each year. Now they will join the swelling ranks of the impoverished, who are already holding daily protests outside government offices in Cairo over the lack of jobs. While Egyptian intellectuals are busy arguing over the appointment of the new culture minister, over which they were not consulted, the Supreme Council of the Armed Forces, which in effect is running the country now, will have to deal with much more serious problems. The most important of these are how to feed the hungry, where to find work for the hundreds of thousands of Egyptians who will return from Libya, and how to reduce Egypt's national debt.

Egypts interim government, already under fire, is hoping to find work for the returnees in the Gulf states, but those countries prefer to import workers from Pakistan, India and Bangladesh and not to take on more Egyptian workers.

Egyptians working abroad send home some $12 billion each year, and if the Gulf states now try to get rid of the Egyptians working there for fear that they may cause unrest, this could worsen Egypt's problems even further. According to figures published by Cairo's statistics bureau, more than 90 percent of the construction workers in Egypt, most of them day laborers found themselves without work during the uprising because of an almost total cessation of construction work. The problem in the tourism field is no less severe, with a million tourists fleeing Egypt over the past month, leaving workers in the industry - which brings in about 10 percent of the gross domestic product - without a job.

Poor man's revolution

In a situation where Egypt's future is still up in the air, it will be impossible to speak in the near future of a broad economic reform, privatization, or a reduction in the subsidies which cost the government about five percent of the GDP. In a situation where 18 percent of the citizens and some 40 percent of the rural population live below the poverty line, any change in prices is likely to give rise to a new civil revolt.

At this stage, it is difficult to speak in Egypt about industrial exports as a lever to economic growth and job creation. Between 1990 and 2009, Egyptian exports increased by a mere five percent annually, about one half of the export growth rate in India and about one third of that of China. According to estimates by the International Monetary Fund, Egypt will need an average growth rate of 10 percent every year in order to absorb into its work force the estimated 9.5 million workers that will be added to it until the year 2020. At present the growth rate is only half of that.

The new Egyptian government, whatever it will be, will have to decide also whether, and how, it plans to support the six million people on welfare. The government decided at the beginning of February to raise salaries by 15 percent in an attempt to calm the economic discontent, however it is doubtful whether this step will be sufficient to satisfy the demands of the protesters.

On the other hand, in order to cut its losses, the government will have to choose whether to dismiss thousands of employees and send them into the streets or borrow more money from outside sources to fund hidden unemployment.

One of the most sensational examples of excess employment used to hide the country's unemployment numbers found expression in the vast sums - about one billion Egyptian pounds per year - that the government allocated to corruption and good government watchdogs.

There is no disagreement over the fact that these bodies themselves did not merely fail to carry out their task but were themselves also a source of widespread corruption. An example of this is how the speaker of the Egyptian parliament appointed 200 parliamentary advisers at a cost of some $20,000 per adviser each month, while members of parliament themselves were paid only $2,000 approximately each month.

The promises to fight corruption are once again filling the pages of the government newspapers in Egypt. Ahmed Shafik's temporary government has announced that it plans to take action against the real estate mafia that gained control of lands on the road between Cairo and Alexandria; it is busy drawing up new laws to prevent monopolies and cartels; and former ministers and public figures have already been arrested on suspicion of engaging in corruption and stealing public funds.

However all these steps do not appear to constitute an organized economic plan that will be able to put the country's economy on its feet or at least to indicate to the citizens who brought about the overthrow of the old order what kind of economic future they can expect.

It appears that even the protesters are now beginning to understand that a revolution won't open the grocery store. There could still be times when Egyptians will hanker for their old regime, just like the citizens of Russia after the Soviet Union was disbanded and Iraqis after the fall of Saddam Hussein.