Day III of ERF 20th Annual Conference: Emerging lessons from Arab countries in transition

The third and final day of the ERF 20th Annual Conference started with discussions around lessons emerging from the experience of Arab countries in transition. Chaired by Noha El-Mikawy (Ford Foundation), plenary session 3 gathered a number of distinguished economists: Gouda Abdel-Khalek (Cairo University); Georges Corm (Georges Corm Consulting Office); Paul Salem (Middle East Institute); and Zafiris Tzannatos (International Labor Organization).

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In his presentation on ‘Social Justice: lessons of experience for Egypt‘, Gouda Abdel-Khalek (Cairo University) examined the meaning behind ‘bread, freedom and social justice’, which became the main slogan of the uprising in Egypt. He discussed how tricky it is to establish social justice in times of political unrest. To support his argument, Abdel-Khalek referred to social injustice indicators that Egyptian society has been witnessing since January 25th, including decreasing wage share to GDP, rising unemployment (youth unemployment over 30%), rising poverty, increasing urban/rural divide, poor access to water and child undernutrition. It seems very little has been done to achieve the slogan of the revolution; therefore, Abdel-Khalek stressed on the need for reforms touching upon taxation systems and subsidizing agricultural producers.

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How can we make the Egyptian people employable?

Labor market is a valuable pillar to achieve economic and social progress and is key to alleviating poverty and promoting inclusion in Egypt. This is why labor market indicators are among the most timely and important measures of economic performance. The Economic Research Forum (ERF) recognizes the value and determines the need to comprehensively study the Egyptian Labor markets. Hence the ELMPS survey- The Egyptian Labor Market Panel Survey.

Timing of the survey results is key, after the January 25th revolution Egypt is no longer the same. Egyptians calling for their ‘right to information Access’, people need to know. ‘To complement two previous surveys of 1998 and 2006, ERF carried out a new round of the Egypt Labor Market Panel Survey (ELMPS) in 2012. It thus marks the third round of a longitudinal survey that tracks the labor market and demographic characteristics of households and individuals interviewed in the two previous rounds.’ (ERF website)

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Education in Egypt: A deep rooted problem

This post was written by Shahira Moneib (GDNet)

Higher education students of private institutions have shown to be more concerned about credentials than obtaining skills that would be beneficial to them in the labor market.

This is one of the findings of a paper entitled “Aligning Incentives to Reforming Higher Education in Egypt: The Role of Private Institutions” by Ghada Barsoum, professor at the American University in Cairo; which looks at the quality of education through the assessment and feedback of students based on their experiences. According to Barsoum, private institutions tend to be more lenient with students in terms of the amount of work and assignments given to them, which in turn affects their skills development.

Barsoum added that private institutions now compose one fifth of higher education institutions in Egypt. This is a phenomenon that has caught the attention of researchers in the field lately as the international trend is playing a strong role in several countries.

Discussed at the latest Economic Research Forum (ERF) workshop, “Incentives for Better Quality Higher Education in Egypt and Jordan”, the paper compares the learning experience between public and private higher education institutions in Egypt. In the light of her research work, Barsoum argues that rules aiming to control the quality of education in private institution have become necessary , towards a higher value of the  learning outcomes of education as opposed to credentials.

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Unemployment rate is a misleading indicator to the labor market, conventional or not?

As we know, the number of people at work is generally related to whether an economy is growing or not. In other words, unemployment can be thought of as a double-edged sword; when economic activity is high, more people are needed to produce the higher amount of goods and services. Thus, it is very important to measure different aspects of the labor market in order to get a better feel for the health of the economy. The unemployment rate is probably the best-known labor market measure and certainly one of the most widely quoted.

The last session of the ERF’s Conference “The Egyptian Labor Market in a Revolutionary Era: results from the 2012 survey (ELMPS)” was a panel discussion on the labor markets in Egypt; we had the chance to interview Ragui Assaad (University of Minnesota), who was one of the panelists.  He argues that the unemployment rate, while useful, does not take into account a number of important features of the labor market, for example, it doesn’t show how the economy is doing during economic crisis and its effect on the labor market.

But is the unemployment rate really the most accurate indicator to the health of the labor market?

While the unemployment rate may be considered as the most informative labor market indicator reflecting the general performance of the labor market and the economy as a whole, it does not say anything about the type of unemployment; whether it is cyclical; not having enough demand for labor to employ all those who are looking for work, or structural; a longer-lasting form of unemployment caused by fundamental shifts in an economy, such as workers’ lack of requisite job skills or inability to move out of their regions. Moreover, it does not take into consideration the informal sector which constitutes a large share of the Egyptian labor market.

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From localized development to up-scaling: What’s the role of key players?

Dr. Anita Nirody, the UNDP’s resident representative in Egypt commences the Egypt Network for Integrated Development (ENID)’s 1st Annual conference by expressing the UNDP’s pride in the association with the initiative for its vital efforts toward poverty eradication in rural Upper Egypt. The conference theme was “A call for developing Upper Egypt”, where ENID demonstrates its efforts in promoting sustainable development and employment opportunities in Upper Egypt. Dr. Nirody emphasizes the advantage of the initiative, being a truly integrated model for development that addresses the most vulnerable groups.

The initiative, Dr. Nirodi argues, helps the poor people of Upper Egypt find job opportunities and builds their capacities to lead productive livelihoods. Moreover, it links them to value chains and markets. Being a multi-stakeholder initiative, ENID works closely with local communities’ administration as well as various networks of civil society groups. It works in three major spheres; agriculture, SME development and innovative business models.

The conference hosted a number of ministers of the Egyptian government, who expressed their support of the initiative’s goals and agendas, which need be integrated on a national level. Dr. Nirody also expresses her faith in the effectiveness of the initiative’s model and its potential to be replicated in other parts of Egypt. Such an upscale would require a high level of cooperation between different ministerial bodies, with the support of international partners such as DFID and the Sawiris foundation.

Watch interview video with Anita Nirody

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Enhancing education cannot be measured by numbers

Nelson Mandela has once said ‘Education is the most powerful weapon which you can use to change the world.’ The importance of education is unquestionable. Achieving universal primary education has actually been one of the Millennium Development Goals set by the United Nations, to be achieved by 2015. Both individuals and countries benefit substantially from increased education levels and improvements in the quality of education. Education is a necessary factor for economic development and growth. It is also the gateway of every individual to the labor market, affecting both the present and future workforce of any nation.

Given the importance of education, it has been crucial to get look at the quality of education in Egypt. This was the topic of the study conducted by Dr. Asmaa El Badawi (Research Associate ERF) using the new Egypt Labor Market Panel Survey for 2012, which she presented during ERF’s conference ‘The Egyptian Labor Market In A Revolutionary Era: Results From The 2012 Survey‘.

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Is the Egyptian labor market post-revolution in a weaker position?

Egypt’s young people have enormous potential to drive the economic and social revitalization of their country, yet this critical sector of the population represents the vast majority of Egypt’s unemployed and underemployed.  Overall unemployment reached 13% in the fourth quarter of 2012 (CAPMAS 2012); in which youth market labor force (ages 15-24) grew 3.1% per year 1998-2006, whereas it  contracted to 4.2% in 2006-2012.

The second session in the ERF Conference on “The Egyptian Labor Market in a Revolutionary Era: Results from the 2012 Survey” focused on the main labor markets trends in Egypt. Two papers were presented in which they complement each other; Dr. Ragui Assaad presented the first paper “The evolution of labor supply and unemployment in the Egyptian Economy: 1998 – 2012“.

This paper analyzes the evolution of labor supply and unemployment in Egypt in the period from 1999 to 2012, focusing on the impact of the demographic phenomenon known as the youth bulge and the impact of the world financial crisis and the marked economic slowdown following the January 25th 2011 revolution.  It was found that the female share of the unemployed has increased from 54% in 1998 to 63% in 2012 despite the fact that they are only 23% of the labor force

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What women want?

Egypt is and remains to be a traditional society with biased gender allocation of time within the household: Men specialize in market work while most; if not all; of the family responsibilities continues to be women’s responsibilities. Nevertheless, women labor force participation is a mandatory factor for economic development. Despite the remarkable increase in women’s educational rates, sometimes more than their male counterparts, participation in the labor market remains relatively low. Are the reasons resulting to this conclusion associated mostly with women themselves? Factors like marriage, fertility, reservation wages, or women’s own preferences have a say. Or are reasons tend to be driven more by the demand side of the market, factors such as discrimination or shrinking public sector? Given the notable participation of women in the Egyptian revolution and the economic scene, ERF commissioned the paper ‘Women’s Participation in Egypt over a Decade: Empirical Evidence Using Post-Revolution Panel Data’ by Rana Hendy to study how women’s participation in labor markets has affected their economic situation from 1998 up to 2012.

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The Egyptian fiscal disclosure puzzle (2000-2010)

Lobna Abdel Latif (Cairo University)

Lobna Abdel Latif (Cairo University)

In her paper “Are improvements in fiscal transparency in Egypt endogenous to fiscal outcomes?“, Lobna Abdel Latif (Cairo University) investigates the parliamentarians’ ability to hold the government accountable for its fiscal behaviour through the fiscal disclosure data they receive from government, over the period 2000-2010 in Egypt. According to Lobna, parliamentarians are only interested in data that hold the government accountable for what serves their own interests and constituencies. Through in-depth analysis of the MPs’ interventions in the floor discussion of fiscal affairs for two successive parliamentary terms over ten years (2000-2010), the study shows that the data disclosed were not the type demanded by parliamentarians; while MPs preferred data on targeted public goods, they received data about pure public goods on deficit and its attributes. In addition, data were not utilized to hold government accountable to its fiscal actions. Lobna hypothesizes that MPs did not request the government to share the right information that affects distributive decisions in parliament; her findings show that they even went into reducing the number of interventions on deficit and its attributes after they got data on those. Therefore, together with her research tem, Lobna calls for a reform of such “transparency-crippling structures”.

Interested in getting an explanation of the Egyptian disclosure puzzle? Read Lobna’s post “Opacity in the attire of transparency!!!: The story of fiscal disclosure in Egypt

Watch our interview with Lobna

Socio-economic policies and the efficiency of democratic reforms

This post was written by Kaouthar Gazdar (PhD in Economics, University of Sousse), Hajer Kratou (PhD student in Economics, University of Carthage & University of Auvergne) & Zeinab Sabet (GDNet)

The fourth and last session of the workshop’s first day had a special focus on economic and social policies, and the efficiency of democratic reforms.

Eberhard Kienle (CNRS Paris/IEP Grenoble)

Eberhard Kienle (CNRS Paris/IEP Grenoble)

The session introduced two papers by Eberhard Kienle (CNRS Paris/IEP Grenoble) and Pierre-Guillaume Méon (Université Libre de Bruxelles). In his paper, Kienle examines the economic and social policies in Tunisia and Egypt in the aftermath of authoritarianism. Despite the intricacy of the Arab spring, it seems fair the assumption that large scale popular protests and the related transformation of political regimes were prompted by a combination of socio-economic and political factors. In a nutshell, authoritarian government had over years and decades prevented numerous actors to articulate their grievances in ways that would have allowed alleviating and addressing them effectively. Many of these grievances were related to socio- economic developments that widened the gap between income and opportunities on the one hand; and expectations based on past experience, official propaganda and comparisons with the outside world on the other.

Kienle challenges the idea according to which democratic regimes guarantee that such potential is actually translated into practice. In fact, and alike authoritarian regimes, democracies may fail to meet the expectations of the ruled. Less repressive by nature, they may even be challenged more quickly and more easily than their authoritarian predecessors or counterparts. According to him, the most important challenge for elected rulers in Tunisia and Egypt, besides the establishment and consolidation of democratic rules, is the formulation and implementation of economic and social policies that avoid past errors, and improve or secure the welfare of all within a broadly accepted framework of social justice.

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