The economic crisis has created challenges for government and private-sector jobs, leading to an altered job market. The first challenge of the crisis was a decline in employment rates, signalling the beginning of transformations in the Egyptian job market.
According to the Purchasing Managers’ Index for March 2023, as reviewed by the Ministry of Planning and Economic Development, private-sector companies are facing problems with weakening demand for their products, in addition to inflationary pressures, supply constraints, and fluctuating exchange rates, leading them to reduce their workforce numbers.
According to the index, the employment sub-index recorded a score of 9.46 points in March, significantly lower than the neutral level and indicating a decline in employment rates. It also said that the decrease in employment rates in March 2023 marked the fourth consecutive month of decline, which suggests that many jobs are likely to remain vacant due to the high cost of employment.
Alongside the decline in the employment rate, Egyptians seeking work outside of Egypt face other challenges that have also decreased their employment abroad, as Emad Darwish, a marketing manager at an employment agency, explained.
“Despite the increased demand from Egyptians searching for job opportunities abroad, the percentage of actual employment contracts has decreased due to external factors beyond their control. For example, women in some countries, such as the UAE and Oman, are now given more opportunities to work than in previous years, which has reduced the number of available jobs for Egyptians in those countries,” Darwish said.
“Additionally, there is a trend towards including Saudi youth in the workforce, especially in administrative jobs which have become almost entirely restricted to Saudi nationals. Employment standards have been raised to demand higher academic degrees, language requirements, and professional experience. As a result, job opportunities are now limited to the small group of applicants who meet these higher standards.”
“In addition to declining employment rates, inflation has also created a gap between the minimum wage and the rising cost of living. This has resulted in many people leaving their jobs to search for better-paying ones. For instance, the cost of living in some countries like Kuwait has increased significantly, as an average worker’s salary starts at 1,800 Kuwaiti dinars while they must pay for food and high-priced housing expenses from their salary. As a result, they may not have enough money to send to their families, making employment abroad less viable in many cases,” Darwish concluded.
Heba Al-Beheiri, a sales employee, faced the same issue. “I worked for a company on a fixed wage, and despite the continuous rise in prices and work pressure, my earnings did not increase. Over time, my employers had to reduce employee salaries to balance low sales and company expenses. At this point, I chose to leave my job because what I earned was consumed by transport and other expenses,” she said.
To reduce the cost of transport and bridge the gap between a minimum wage and the continuous increase in prices, many people have turned to freelance work platforms online as a solution. Mohamed Al-Hassab, a photographer, said that when he started working in photography, he joined a company where he earned a monthly salary of LE2,500. However, working freelance this could be the same as he receives for a single photo session lasting a few hours.
On the other side of the decline in employment rates, new professions and developments have emerged due to technological advances and other changes, Darwish said.
“In various professions, jobseekers must now master new requirements. For example, there is a new generation of cars that operate on a different system than regular cars. We receive requests to hire drivers to drive this type of car. However, no one in Egypt knows how to drive them yet as they are not available here,” he said.
Changes to keep up
Zahra Al-Khouli, the originator of an idea for a breakfast gift box project, said that “our fast-paced lifestyles have created an expanding market that we must be innovative and skilled to keep up with.
“Despite the competition I faced in the pastry industry, I created a breakfast gift box idea that gave me a market with fewer competitors than in my previous work,” she said.
“Social media helped me to promote my idea. I worked alone for three years, but now I have a team of four and 25,000 followers on Facebook and 16,000 on Instagram. Through these online communication platforms, I found that the idea was well-received by followers, even though it did not receive encouragement from those around me at first.”
“As time passed, the Internet helped us to understand what customers desired. We found that people are tired of giving chocolate and sweets as gifts and want something healthy and different, such as ready-to-eat and sliced fruit and vegetables.”
“Social media and technological advances also helped me promote my business better than traditional photo-sharing. I chose slow-motion photography techniques and created advertising videos to present products in an attractive and appealing way to my Facebook followers. One of the videos became viral and gained 1.5 million views,” Al-Hassab said.
The rise in the price of the dollar has also formed a barrier to the importation of many raw materials, affecting the manufacturing and sale of various products and, consequently, jobs. In order to deal with the fluctuation in dollar prices that have affected many jobs, the Medium, Small, and Micro Enterprises Committee of Egypt’s parliament has presented a strategy for initiating projects to provide alternative products and reduce imports to the prime minister, Mohamed Kamal Marei, chair of the committee, told Al-Ahram Weekly.
The strategy relies on directing young people towards projects to manufacture alternative products to imported ones and to localise industry and reduce imports, Marei said. It begins with cooperation between the Industrial Development Authority (IDA) and micro, small, and medium-sized enterprises (MSMEs).
The IDA provides land adjacent to factories that import raw materials for their manufacturing processes and designates this land for young people wanting to establish their own projects. It also provides a list of requirements and supplies for larger factories to young entrepreneurs, so they can manufacture them locally.
If an investor wants to establish a clothing factory, for example, the IDA can provide land for the factory and a list of complementary products such as buttons and zip fasteners. Young people who apply to become MSMEs can build their own small factories to manufacture such products locally instead of importing them, creating a market and demand for their products, reducing the imports of the raw materials used by large factories, and leading to an integrated industrial cycle that supports young people.
Many Egyptian workers are following the same approach to avoid falling into the trap of relying on imports. Samar Mohamed, an online marketer, said that “I used to work selling baby cribs made of imported wood. But with the rise in the dollar rate, production decreased, and I began to sell less, which resulted in a decrease in my commissions.”
To overcome this, Samar resigned from her marketing job. “I chose to learn how to tailor a different product made entirely of local fabric and materials instead and to manufacture and market it myself. This saved me the profit margin that the importer and manufacturer would take,” she said.
As part of efforts to provide alternative products to imported ones, pharmacist Kati Halim also launched a brand of skincare products that are an alternative to imported products from abroad.
“I chose to design Egyptian products made of 100 per cent natural materials. The ancient Egyptians were pioneers in this field, and many of my products include recipes known since ancient times,” Halim said.
“I created a product that brings the user closer to Queen Cleopatra’s baths, using goat’s milk, rose, and orange oils. I have even coined the phrase ‘soak like an Egyptian’ for some of my products that bring back the ancient Egyptian way of doing things for customers.”
Halim has invented a product that can be used in multiple ways to facilitate personal care, even during times of economic crisis. “Many people no longer have extra money for skin care, so I created a multi-function product, a candle made from olive oil and beeswax. It melts at a low temperature so that users can use the liquid oils for moisturising the skin or during massages.”
In addition to reducing imports, MSMEs support freelancers and project owners by providing entrepreneurship courses in various specialisations. The MSMEs also provide loans at a lower interest rate than the banks at 2.25 per cent, according to Marei.
Sharing her experience of creating her project, Halim said she had benefited from the courses and training programmes provided by the government. She learned marketing, sales, and everything else she needed to start her own business.
“Many young people do not know about them, but opportunities are available for those who want to study for free. The government provides business incubators at Egyptian universities and online and full programmes for learning in any field. In addition, it gives extra support to young people, women, and people with special needs and empowers them in their work and private projects,” she concluded.
* A version of this article appears in print in the 18 May, 2023 edition of Al-Ahram Weekly