CAIRO: Egypt’s unemployment rate reached 11.8 percent in the second quarter of 2011, down from 11.9 percent in the first quarter, but higher than last year’s 8.96 percent.
Despite the slight decrease in the actual statistic, Alaa Ezz, secretary general of the Federation of Egyptian Chambers, pointed out that the country will continue to see high unemployment figures.
“Since the open door policy, where the government starts to be regulator instead of operator, private sector has taken over the majority of investment; today, almost 95 percent of new employment is by private sector,” he noted.
“The problem is that due to the repercussion of the revolution where foreign direct investment and local investment have gone down tremendously and tourism has gone down drastically, there are no new investments to take this 95 percent up.”
Ezz attributed the decrease in some job opportunities to what he labels as the “yo-yo system,” where tourism entities have an understanding with workers who know they may easily be laid off during tourism disasters.
According to Ezz, this happened as a result of the January 25Rrevolution, incapacitating growth rate.
Ezz also noted that as the country’s population increases, productivity and GDP remain negative.
“Our population growth is about 2.4 percent annually, and the growth of GDP has been around 6 percent in 2010, which means it helps year by year to reduce unemployment, this year however, there is no growth in GDP, while our population continues to increase.”
Ezz also emphasized that the country will continue to see a negative growth rate until clear economic policies are put in place after the elections.
Despite the forecast after elections, Ezz pointed out that most of the political parties running in the upcoming elections have high hopes and promises, but no concrete plans.
Taking current circumstances of the economy into consideration, this is seen as very problematic and disturbing as the country now is in dire need of rigorous economic reforms even more so than before.
“Most of the parties now don’t have a real economic agenda, we don’t see a plan to achieve the targets of the objectives that they are putting,” he added. “You want to create more jobs, you want a better status for Egyptians, then you have to address how you are going to do that; you have to have mechanism to apply these plans.”
Earlier this month, the Central Agency for Public Mobilization and Statistics (CAPMAS) issued a report that found unemployment rate among youth in the 18-29 age group reached 20.4 percent.
The report was issued on August 12, what the United Nations honors as annual youth day in order to celebrate and honor youth as well as ensure the world’s commitment of enhancing and protecting human rights, especially those of the youth.
On the occasion, CAPMAS found that the number of youth in Egypt between the ages of 18-29 reached about 19 million, representing 24.2 percent of the total country’s population in 2010, 50.5 percent male and 49.5 percent female.
The youth’s contribution in the labor force at age group 18-29 years reached 51.9 percent, males being significantly higher with a contribution of 75.6 percent, while 27 percent of females contributed.
Unemployment rate among the youth reached 11.5 percent for males and 46.4 percent for females; while unemployment among males who have university degrees reached 26.8 percent and 55.1 percent for females.
According to Ezz, since the government is not “honoring” its promises of facilitating business plans or land deals for investors, Egypt will continue to see a rough time ahead.
“I predict that we will see negative figures in growth rate over the next year,” Ezz added. “The improvement that we can see will be after the elections, possibly in the end of the year or beginning of 2012, but that will simply be recovering what we lost after the revolution. “
Meanwhile, as local and foreign investors continue to have low confidence in the market, the country will continue to see high employment figures.
“The unemployment figure is not what we should worry about; it is the kind of jobs we create,” he added.
“We should strive to create jobs where there is a possibility of creating value, hence youth will be a part of a mechanism developing themselves and the country.”
