Economic growth, on its own, does not automatically translate into more and better jobs for everyone. While it is a prerequisite for increasing employment, the nature and the sector composition of growth determine the extent to which growth translates into productive jobs (International Labour Organization [ILO], 2018). Therefore, policies should be concerned with the extent to which economic growth has met the need for more jobs and for higher productivity and income. The efficiency of economic growth is judged by the unemployment rates, the employment-to-population ratios and the labor force participation rates. This is the elasticity of employment with respect to growth, which is how much employment growth is associated with 1% of economic growth. This commentary will explore whether economic growth policies in Egypt have explicitly integrated employment to enable sustainable and inclusive job creation.&nbsp;
At the macroeconomic level, the economic performance in Egypt flourished in the years leading up to the 2011 revolution. The real GDP had shown a significant growth over the period of 2005 till 2010, reaching its highest in 2008 at 7.2% (World Bank, 2019). The economic advancements were made possible by the high stream of income generated through tourism, which reached its highest record ever of USD12.5 billion, as well as the incoming flows from the Foreign Direct Investments (FDIs) and the increasing inflows of the Suez Canal (Breisinger et al., 2020; Central Bank of Egypt [CBE], 2019). Such inflows have contributed to a significant increase in the foreign currency reserves, reaching USD45.5 billion as of February 2020, compared to USD44.4 billion by end of fiscal year 2018/19 and USD19 billion in 2016/17 (Egyptian Center for Economic Studies [ECES], 2020a).&nbsp;
However, since 2011, Egypt has experienced economic fluctuations. The macroeconomic indicators deteriorated heavily: the real GDP growth fell from 5.1% in 2010 to 1.8% in 2011, a fall of 3.3% (African Development Bank, 2012). The economic reforms undertaken by the Egyptian economy and under the advice of the International Monetary Fund, have resulted in the real GDP growth rate increasing to 5.6% in 2019, and the unemployment rate had significantly reduced to 8.1% in 2019 prior to COVID-19 crisis, before rising to 9.6% by the second quarter of 2020 (African Development Bank, 2019; ECES, 2020b). However, despite the revival in the rates of growth, an increase in the inequality gap, as reflected by the increase in the Gini index&mdash;the measure of the distribution of income&mdash;was witnessed (see Figures 1 and 2). This shows that growth has not been inclusive and has induced a widening gap between the different sectors of the society. Social conditions remain difficult. Inflation and poverty are still recording high numbers and unemployment, especially among the youth as shown in Figure (3) below, is still recording significantly high.&nbsp;
&nbsp;Figure 1: GDP Growth Rate
<img style="display: block; margin-left: auto; margin-right: auto;" src="https://api-aps.aucegypt.edu/uploads/tinymce/1611041503imageScreen Shot 2021-01-19 at 9.28.46 AM.png" alt="" width="602" height="303">
Source: Author&rsquo;s own calculation using World Bank Data, 2019.
&nbsp;Figure 2: Gini Index
<img style="display: block; margin-left: auto; margin-right: auto;" src="https://api-aps.aucegypt.edu/uploads/tinymce/1611041523imageScreen Shot 2021-01-19 at 9.28.55 AM.png" alt="" width="481" height="292"> 
Source: Author&rsquo;s own calculation using World Bank Data, 2019.
Figure 3: Unemployment Rate (Total and Youth)
<img style="display: block; margin-left: auto; margin-right: auto;" src="https://api-aps.aucegypt.edu/uploads/tinymce/1611041541imageScreen Shot 2021-01-19 at 9.29.03 AM.png" alt="" width="481" height="242">
Source: Author&rsquo;s own calculation using World Bank Data, 2019.
<h3>A Closer Look at Unemployment and Labor Force Participation</h3>
Looking specifically at unemployment rates and labor force participation dissected by education, gender and age group (Figures 3, 4, 5 and 6), it becomes obvious that employment policies in Egypt have not been inclusive. Equity in access to employment has not been achieved, indicating marginalization and exclusion in the labor market. Figure (4) shows that throughout the period 2005-2018, labor force participation among the youth (24-37%) is consistently lower than the overall labor force participation rate (43-50%). Figure (5) further shows that during the same period, women have the lowest rates of participation of all groups reaching a low of 11% in 2018 and a high of 21% in 2005.&nbsp;
&nbsp;Figure 4: Labor Force Participation Rates (Total vs Youth)
<img style="display: block; margin-left: auto; margin-right: auto;" src="https://api-aps.aucegypt.edu/uploads/tinymce/1611041560imageScreen Shot 2021-01-19 at 9.29.12 AM.png" alt="" width="525" height="231">
Source: Author&rsquo;s own calculation using World Bank Data, 2019.
Figure 5: Labor Force Participation Rates (15-24), by Gender
&nbsp;<img style="display: block; margin-left: auto; margin-right: auto;" src="https://api-aps.aucegypt.edu/uploads/tinymce/1611041582imageScreen Shot 2021-01-19 at 9.29.20 AM.png" alt="" width="532" height="255">
Source: Author&rsquo;s own calculation using World Bank Data, 2019.
While unemployment rates have been declining, this decline differs across&nbsp; the different education groups, age groups and genders, as reflected in Figures (6) and (7). Youth unemployment rates are higher than total national unemployment rates, the former reaching a high of 34%. Within both groups, unemployment rates significantly differ by gender and education group. Unemployment rates among female youth recorded the highest rates over the years, reaching a high of 56%. Moreover, unemployment rates among the highly educated have recorded a high of 22%, compared to 17% and 11% among the intermediate and basic education levels, respectively. This high unemployment rate among the highly educated is reflective of the mismatch occurring between the education outcomes and the labor market needs.&nbsp;
Figure 6: Unemployment Rate (Total and Among Youth), by Gender
<img style="display: block; margin-left: auto; margin-right: auto;" src="https://api-aps.aucegypt.edu/uploads/tinymce/1611041610imageScreen Shot 2021-01-19 at 9.29.27 AM.png" alt="" width="595" height="227"> 
Source: Author&rsquo;s own calculation using World Bank Data, 2019.&nbsp;
Figure 7: Unemployment Rate by Education Level
<img style="display: block; margin-left: auto; margin-right: auto;" src="https://api-aps.aucegypt.edu/uploads/tinymce/1611041638imageScreen Shot 2021-01-19 at 9.29.34 AM.png" alt="" width="533" height="292">
Source: Author&rsquo;s own calculation using World Bank Data, 2019.
&nbsp;Evidently, policies promoting economic growth and job creation in Egypt have failed to provide enough jobs, especially for the youth and the highly educated. An employment-led growth strategy needs to incorporate financial inclusion, skills update and upgrade and direct investments to sectors identified as main employers, especially of youth and women. This employment-led strategy should aim to take Egypt out of its lower skill equilibrium and promote more inclusive growth.&nbsp;
<h3>&nbsp;Learning from Morocco: Tackling Demand-Side Barriers</h3>
The collection of quality data is the key to ensure inclusive and employment-rich economic growth. Poor or missing data cripples economic planning and policymaking. Moreover, the lack of integration and coordination between policies is the main reason for the mismatch that heightens labor market imbalances. Morocco is a country that has managed to collect quality data used to inform its well-integrated policies. On the other end of the spectrum, Tunisia is suffering from data deficiency with limited policy integration. Egypt has managed to lay somewhere in between, with limited data availability&mdash;mainly on the supply-side&mdash;and a rather limited policy integration.&nbsp;
The Moroccan National Survey of Employment provides extensive information on labor market needs through identifying the future employment needs of companies. The National Agency for the Promotion of Employment and Skills (ANAPEC) was initially designed to facilitate legal migration between Morocco and Europe, acting as an intermediary between European markets and Moroccan workers, whether they are migration candidates or planning to return home. ANAPEC also organises and implements active labor programs, including: skills training to improve employability; wage subsidies for unemployed graduates and entrepreneurship promotion through mentoring programs and financial assistance&nbsp; (World Bank, 2018). ANAPEC has successfully managed to integrate more than 100,000 job seekers in the professional environment and improved the employability of more than 27,000 job seekers in 2018 (International Centre for Migration Policy Development [ICMPD], 2020). The collection and utilisation of rich demand-side data has enabled both the identification of the main causes of high unemployment rates (especially among the youth) and the proper formulation of policies to encourage inclusive growth and job creation.&nbsp;
Similarly, policies in Egypt should aim at tackling demand-side barriers and addressing mismatches between education outcomes and employers&rsquo; demand. Inclusive employment policies in Egypt need to be centred around:
<ul>
<li aria-level="1">Data availability and analysis</li>
<li aria-level="1">Structural reform to the education system</li>
<li aria-level="1">Structural reform to employment and self-employment policies</li>
<li aria-level="1">Employment intermediation&nbsp;</li>
</ul>
Informed decisions and policymaking are highly dependent on the&nbsp;availability and accuracy of data. While labor market surveys in Egypt extensively cover the supply side of the labor market, demand-side data is highly missing, making it difficult to devise well- informed policies on the proper employment strategies to drive economic productivity and growth.&nbsp;
Barriers to employment are also related to the mismatch between skills in demand and those in supply. This mismatch could arise from the limited availability of the skills needed, and/or limited information on where to find those who have the skills in demand. Education reforms aim to encourage the alignments of educational outcomes with labor market demand. Public-private and private-private partnerships could improve the education infrastructure and update curricula. Partnerships with industries are highly encouraged to identify the right mix of skills and the provision of appropriate education programmes.&nbsp;
Furthermore,&nbsp;employment reforms need to make use of the available data and identify labor market dynamics and future labor and skill needs. Moreover, coordination between the different stakeholders (public, private and NGOs) is necessary to ensure projects are well-coordinated and dispersed so as not to mistakenly provide the same benefits to the same populations. A revision of the Active Labor Market Programmes (ALMPs) is necessary to make sure they do not overlap and only the most effective of them is retained.&nbsp;
Self-employment appears as an alternative absorbent to the youth in the labor market. The efforts in promoting self-employment and entrepreneurship have not spread enough nor have been accessible enough to the new youth entrants to the labor market. Access to credit remains to be the main challenge facing self-employment in Egypt. Reforms to the self-employment policies should not only aim to address the main challenge of financial constraints, but should also aim to provide potential entrepreneurs with enough skills and mentorship to overcome the fear of failure. Efforts to improve know-how and financial inclusion could provide an alternative opportunity to the youth in the labor market.&nbsp;
Finally, employment intermediation, which aims at improving formal methods of job search, information provision and job matching, is needed to make sure policies are not working in isolation. This would entail the provision of digital infrastructure to improve communication and awareness, bringing the job matching services closer to the youth.&nbsp;
<hr>
References
<ul>
<li style="text-align: left;">African Development Bank. (2012). African Economic Outlook, Egypt. <a href="https://www.afdb.org/fileadmin/uploads/afdb/Documents/Generic-Documents/Egypt%20Full%20PDF%20Country%20Note_01.pdf">https://www.afdb.org/fileadmin/uploads/afdb/Documents/Generic-Documents/Egypt%20Full%20PDF%20Country%20Note_01.pdf</a></li>
<li style="text-align: left;">&nbsp;African Development Bank. (2019). Egypt Economic Outlook. <a href="https://www.afdb.org/en/countries/north-africa/egypt/egypt-economic-outlook">https://www.afdb.org/en/countries/north-africa/egypt/egypt-economic-outlook</a></li>
<li style="text-align: left;">&nbsp;Breisinger, Clemens, Abla Abdel Latif, Mariam Raoud and Manfred Wiebelt. (2020). Economic impact of Covid-19 on Egypt&rsquo;s tourism and remittances. </li>
<li style="text-align: left;">Central Bank of Egypt. (2019). Balance of Payments Performance. <a href="https://www.cbe.org.eg/Highlights%20Documents/Press%20Release%20about%20Balance%20of%20Payments%20Performance%20durig%20July-Dec.%202018-2019.pdf">https://www.cbe.org.eg/Highlights%20Documents/Press%20Release%20about%20Balance%20of%20Payments%20Performance%20durig%20July-Dec.%202018-2019.pdf</a> </li>
<li style="text-align: left;">Egyptian Center for Economic Studies. (2020a). Servicing Egypt&rsquo;s External Debt.&nbsp;<a href="http://www.eces.org.eg/cms/NewsUploads/Pdf/2020_4_19-7_30_26Debts-%20English-%20Yara%20.pdf">http://www.eces.org.eg/cms/NewsUploads/Pdf/2020_4_19-7_30_26Debts-%20English-%20Yara%20.pdf</a></li>
<li style="text-align: left;">Egyptian Center for Economic Studies. (2020b). Follow-up on Covid-19 Consequences on Egyptian Economy: Egyptian Labor Market.&nbsp;<a href="http://www.eces.org.eg/cms/NewsUploads/Pdf/2020_12_7-9_16_12Views%20On%20News%20(Views%20On%20The%20Crisis)%20-%20Edition%2023%20Follow-up%20on%20the%20effects%20of%20COVID-19%20on%20the%20Egyptian%20economy%20-%20Egyptian%20Labor%20Market.pdf">http://www.eces.org.eg/cms/NewsUploads/Pdf/2020_12_7-9_16_12Views%20On%20News%20(Views%20On%20The%20Crisis)%20-%20Edition%2023%20Follow-up%20on%20the%20effects%20of%20COVID-19%20on%20the%20Egyptian%20economy%20-%20Egyptian%20Labor%20Market.pdf</a></li>
<li style="text-align: left;">&nbsp;Egypt Today. (2019). Egypt&rsquo;s Economic Outlook in World Bank&rsquo;s Report. <a href="https://www.egypttoday.com/Article/3/68143/Egypt%E2%80%99s-economic-outlook-in-World-Bank%E2%80%99s-report">https://www.egypttoday.com/Article/3/68143/Egypt&rsquo;s-economic-outlook-in-World-Bank&rsquo;s-report</a></li>
<li style="text-align: left;">International Labour Organization. (2018). Employment-rich Economic Growth (Decent work for sustainable development (DW4SD) Resource Platform). <a href="https://www.ilo.org/global/topics/dw4sd/themes/employment-rich/lang--en/index.htm">https://www.ilo.org/global/topics/dw4sd/themes/employment-rich/lang--en/index.htm</a></li>
<li style="text-align: left;">International Centre for Migration Policy Development. (2020), Linking human capital, labour markets and international mobility: an assessment of challenges in Egypt, Jordan, Morocco and Tunisia .</li>
<li style="text-align: left;">World Bank. (2018). Labor Market in Morocco: Challenges and Opportunities. https://www.worldbank.org/en/country/morocco/publication/labor-market-in-morocco-challenges-and-opportunities</li>
<li style="text-align: left;">World Bank. (2019). Data bank.&nbsp; <a href="https://databank.worldbank.org/reports.aspx?source=2&amp;country=EGY">https://databank.worldbank.org/reports.aspx?source=2&amp;country=EGY</a></li>
</ul>

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العمل والتوظيف

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