More investments needed to provide more jobs
Egypt, Economics, 8/22/2001

It goes without saying how unemployment constitutes a real challenge for the Egyptian government hindering all efforts for achieving comprehensive development.

This is why the government has recently launched a program for providing jobs for 170,000 graduates applying for which started on August 15. But what actually happened was that more than a million graduates have applied for these jobs. Businessmen seem to have a different opinion as they think the private sector should be given the real chance to contribute to the efforts seeking solutions for the unemployment problem and providing new jobs through encouraging investments and eliminating obstacles hindering them from playing due role in that concern.

Undersecretary of the Federation of the Egyptian Chambers of Commerce, Ahmed Arafa, said that government agencies were no longer able to receive new employees as they were already suffering from masked unemployment. Since 1985, the government seemed to have left that role to the private sector, which has managed over the past ten years to provide hundreds of thousands of new jobs, he added. Following these ten years, the problem emerged again as a result of the recession on the economic market which forced the private sector to refrain from launching more fresh investments.

"Many factories and companies have come to work with half their actual capacity as most of them failed to sell their production," Arafa said. He urged the government to help the private sector overcome its problems, eliminate obstacles standing in the way of serious investments and take necessary measures to reactivate the market.

"In this way, the private sector would manage to overcome unemployment over the coming few years," he said. Undersecretary of the Sadat Academy for Management Sciences, Abdul-Moteleb Abdul-Hamid, shared the same view saying that the government announcement of new jobs would be no more than replacing retired employees with new ones.

"These are not true job opportunities and the government administration is already suffering from too much employees," he said. Moteleb added that the real solution for the unemployment problem would be launching fresh private investments by the private sector encouraged by the government.

"The private sector has an important social role to play, that is working harder on providing new jobs," Moteleb said, noting that the problem of unemployment had started when the Egyptian economy started to rely on projects that absorb great capital depending on high technology which need no big labour. Therefore, investments have to be concentrated on projects that could provide more job opportunities.

"One wonders why are not such projects included in enterprises that enjoy the incentives and advantages of the investment law," Moteleb said, urging more attention to be given to small and medium projects. He also proposed that each Egyptian governorate should adopt a programme of its own to overcome unemployment and governors will be evaluated according to their success in solving the problem. Professor Mohammed Abdul-Halim Omar, chairman of Saleh Kamel Centre for Islamic Economy, shared the view that the government agencies were not in need of more staff.

"In fact the jobs announced recently by the government would be no more than paper works that would add nothing to the national economy," he said. Omar stressed the private sector's ability to solve the unemployment problem, but still the sector was not committed to do so in light of the recession and liquidity squeeze in most economic activities in the country.

"For almost a whole decade the private sector has managed to provide thousands of new jobs in the industrial projects in the new cities and it could contribute more and more to providing new jobs . Thus there is urgent need for more official efforts to activate the market and encourage the sector to launch fresh investments and create new jobs as part of its social role." he said.

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