Trade Union Forum

Speech by Abdelmonem Elgamal, President of the Egyptian Trade Union Federation. September 7th, 2024

Analytical insight on the impact of economic challenges on working class in Egypt

From 2011 to 2014 the Egyptian economy was affected due to political instability, which resulted in an increase of unemployment rate, reaching 13% in 2013. The economic situation was reflected significantly in the labor market, which was trying to adapt to rapid changes and successive shocks that had a big impact on the Egyptian working class.

Since 2014 Egypt has adopted ambitious economic reform program, the state has taken a package of economic reform measures in conjunction with implementing of number of major national projects which contributed to create large number of jobs especially in construction sector, as well as the state has also given great interest in stimulating the entrepreneurship climate in order to improve economic opportunities by providing concessional loans to support SMEs to increase opportunities for youth and women's empowerment ,However, the consequences of the coronavirus pandemic and the political situation at the regional and international levels have caused successive shocks that have radically affected Egypt's economy which has witnessed a range of challenges, most notably high inflation rates that have reached 33.8%in 2023, in addition to the weakness of exportation and FDI, inability to meet local market needs due to high production costs, and the provision of some production inputs as a result of decisions of ban to import certain goods due to the crisis of the decline in foreign cash reserves.

The economic challenges peaked; however, the World Bank's report expects that economic activity will begin to recover from 2025.

With increasing investment, consumption strengthened, and lower inflation, the Government's debt is expected to decline in the medium term with continuing economic reforms and improving business environment, human capital development, social protection and creating job opportunities.

Undoubtedly the Egyptian working class faces a major challenge in light of the changes posed by the future of work in which unemployment is high among learners, young people and women.

Demand for traditional jobs is affected with increased demand on new jobs offers and unprepared education systems to meet the needs of those jobs that require non-traditional skills, which indicates the gap between offer and demand as a result of the required skills gap.

The rapid changes of technology development exceed the readiness of the labour market awareness and skills to keep up with the new requirements for these jobs, also the legislation and policies of labour market have become unsuitable for these changes in order to discipline the new situation of labour future. The education and training outputs become also unsuitable for the required jobs in the labour market. This situation pushed the working class to informal sector and work fields that don't need good skills.

Regarding these challenges, ETUF, as one of the main social partners, has set a comprehensive vision for reform based on his responsibility for the working class in general and the trade union organisation specifically. ETUF has contributed in giving opinion and discussing legislations concerning the working class especially the labour draft and social insurance in order to apply flexible policies able to keep up with changing reality. In addition, ETUF prioritizes the development of vocational education system through improving the labour university to be able to contribute to improve working class skills related to labour market requirements. This will be achieved by creating education systems based on qualifications and development of vocational education and training for acquisition of untraditional developed skills and this reflects the priorities for ETUF as one of the social partners.

At last through analysis of the current economic conditions and its impact on the working class ETUF is trying to set a road map for integration with the ambitious national policies of development of Egyptian labour market, comprehensive legislative and institutional reforms, and human capital investment. This road map based on determining of priorities for reform and supposing development methods from ETUF perspective.