Poverty and Unemployment in Egypt

Egypt is regarded as one of the wealthiest nations in the world due to Hollywood images of pyramids and numerous ancient riches. However, poverty and unemployment is experienced by most of the citizens. The nation has an overall population of about eighty million people. Thirty-three percent of this population is young people aged fourteen and below. The largest population in this nation comprise of young people who are struggling with joblessness, poverty, and increased food prices. Almost half of Egyptian population lives below or slightly above the poverty line spending two dollars per day. 9.7 percent of the population is unemployed (Galal, 2001). There are numerous factors that cause increased poverty levels and unemployment. The Egyptian government provides policies that help in combating poverty and unemployment issues among the citizens. This research reviews the Egyptian population that suffers from poverty and unemployment. It also indicates the governmental policies that are put in place to alleviate the problem.

Research Findings

From 1980s, Egypt experienced an increasingly growth in poverty levels, but the rates subsided in mid-1990s. According to report issued by Human Development Report in 1996, 13.7 million Egyptians (22.9% of the entire population) live below the poverty line. Poverty level is slightly lower in urban areas as compared to rural areas (Galal, 2001). 7.4% of the poor live below the core poverty line, 25% are moderately poor, while 52% are non-poor. The poor are involved in marginal activities that give them low-wage while still, a good number is unemployed. Most of the poor are highly illiterate or have low educational level (Galal, 2001). Unemployment rate is higher in women ranging at 24% as compared to unemployed rate of men that are at 9%. However, the rate of unemployment is highest among the youths, which is at 33% considering those aged between 20 and 24 only.

There is a big gap between the rich and the poor. Over 40% of the Egyptian population lives below the poverty level spending less than $2 per day. The economy is controlled by a few persons with statistics showing that 98% of the economy is controlled by 2% of the population (Shahin, 2000). There in an increasing rate of inflation following the increased prices of basic commodities such as food, textile products, and housing maintenance and repair costs. About 86% of vulnerable Egyptians are unable to acquire sufficient food and 61% spend their entire earnings on food.

Factors that Contribute to Poverty and Unemployment

High-population growth rate is the main cause of poverty and unemployment in Egypt. Egypt has a high-fertility rate thus giving rise to socio-economic burdens. Although fertility rates have declined over the last few decades, growth rate is still high with the population rising from 44 million to 80 million in the last three decades. Such growth rate result to numerous unemployed youth. There are about 7.7 million unemployed youths between aged between 14 and 25. Again, Egypt does not have pragmatic policies to fight poverty. The subsidized policies that are meant to benefit the poor are enjoyed more by the rich.

Governmental policies

There are different governmental policies that have been adopted to alleviate poverty and also to curb unemployment problem.

1. Social Fund for Development (SFD).

This policy was established in 1990. It was established through a Presidential Decree in partnership with World Bank, European Union, UNDP, and Arab Funds. The main objective of this policy was to mobilize both national and international resources to be utilized by human development (Datt & Jolliffe, 1999). The policy facilitates soft loans and donations that are crucial in supporting economic reforms program thus reducing the unfavorable effects on vulnerable and low-income earners. The availability of donations and soft loans is used to finance small-scale enterprises; therefore it creates job opportunities. SFD also addresses structural social problems by developing income generating projects. The program stimulates institutional relation that strengthens civil society by increase social awareness. SFD takes the responsibility of activate local non-governmental organizations by building their capacity. This helps in poverty alleviation, economic development, and creation of employment.

       2. Establishment and strengthening of the ministry of insurance and social affairs.

This ministry is directly involved in eradicating poverty by implementing social and pension programs. It is also indirectly involved through various NGOs that it supervises and support such as Social Nasser Bank. Again, this ministry co-operates with SFD in financing micro and small enterprises thus creating employment and offering support to poverty stricken families.

       3. Productive Families Project (PFP).

This is a socially-based national project that aims at assisting families in Egypt. It has branches all over the nation though it is managed at national level. PFP main objective is to develop economic resources for Egyptian families by mobilizing members’ potential (Datt & Jolliffe, 1999). Members are encouraged to engage in profitable environmental home industries in order to improve their living standards and manage to face socio-economic hardships. PFP provides services, equipments, and raw materials that are needed to carry out a project. They also provides loans essential to establish and implement a project. Since its establishment, over a million families have benefited from it thus lowering unemployment rate and reducing poverty level.

        4. Mubarak Social Solidarity Program.

The Egyptian government has also established another program known as Mubarak Social Solidarity Program that aims at reducing the burden on low-income earners. Mubarak Social Solidarity Program aims at higher rates of human development. The program, therefore mobilizes productive potentials through income generating projects. It main targets are poor people whose earnings are below the poverty level, the handicapped, persons with terminal sicknesses, and unemployed youths (Datt & Jolliffe, 1999). The program targets all the marginalized groups to enable them improve their living conditions.