In the 1950s and 1960s, the Egyptian state under President Gamal Abdel Nasser had placed several barriers, some bureaucratic and others discursively, towards emigration.
The socialist discourse that Gamal Abdel-Nasser employed was anti-western and anti-imperialist.
There was a focus on how Egyptians needed to stay in their country and help build a strong, independent, and self-sufficient nation.
However, shifting political and economic conditions resulted in a more liberalized emigration policy from the 1970s onwards.
This paper will focus on how the Egyptian state dealt with the economic challenges by employing emigration policies.
The three main macroeconomic issues have persisted in Egypt since the 1960s are overpopulation and urbanization, structural unemployment, and balance-of-payments deficit.
When implementing emigration policies to address the aforementioned macroeconomic issues, the Egyptian state hoped to lessen its financial burden and leverage the economic gains such policies may generate.
Whether the gains were financial or knowledge transfer is not the concern of the paper.
However, it is worth noting that there are three main routes in which brain drain can influence knowledge transfer, i.e., brain gain.
Firstly, the allure of migration might encourage populations to increase education spending in order to increase their chances of securing jobs abroad.
Secondly, remittances may alleviate household constraints regarding spending on education.
Finally, the migrants that work abroad can transfer their new skills and knowledge back to their country of origin once they return. (Bacchi, 2016)
From looking at these routes, it is evident that there is a need to develop and maintain a robust education system in order to secure as many benefits from emigration as possible.
However, in the case of Egypt, emigration was used as a method to deal with already existing problems and not necessarily as a way to have additional gains other than financial remittances.
In the case of overpopulation, conventional family planning techniques were deemed insufficient in dealing with the matter at hand. It is speculated that there was a lack of political drive to pursue conventional family planning fully.
The political elite wanted to avoid actively pursuing such an agenda as it was viewed unfavourably by Egyptian society's more religious or conservative groups. The Egyptian government was trying to co-opt this segment of society during the 1970s and 80s.
The official stance of the Egyptian government argued that successful birth control requires a certain standard of education within society and that most Egyptians did not meet that standard.
In 1975, emigration became an official target of the nation in order to deal with the problem of overpopulation.
In addition to being viewed as a mechanism to deal with overpopulation, emigration policies were advanced by the Egyptian state as a tool to combat unemployment.
In the 1970s, Egypt had the region’s most significant and well-trained deployable force of human capital. The educational reforms that took place on the heels of the 1952 revolution allowed for the training of many individuals.
However, it was clear early on that there was a problem with actually absorbing these trained individuals into the Egyptian domestic economy. After all, according to official projections of state agencies in the 1960s, it was expected that by the early 1970s, Egypt would have graduated more than four times the number of engineers it was expected to need until 1980.(Ayubi, 1983)
The formal plan of the Egyptian state was to “export” Egyptians to other Arab nations. Egyptians were no longer viewed as an asset by the Egyptian state (as long as they remained in Egypt) but rather a burden that had to be offloaded to other nations in the region.
However, having such a model for dealing with unemployment does not consider that Egyptian workers abroad may suddenly be forced to return.
This can be due to an increasingly globalized workforce forcing them to compete with workers from South Asia or Asia, host countries wishing to nationalize their workforce, or declining oil prices.
That is to say; there are too many factors outside the direct influence of the Egyptian state for emigration to be a long-term solution for structural unemployment.
On the one hand, the ever-increasing number of domestic-based Egyptians was seen as a burden. On the other hand, Egyptians that went abroad secured the inflow of remittances in foreign currency are seen as assets that greatly aided the Egyptian government in dealing with their balance-of-payments deficit. In 1970, remittances did not exceed $10 million; by 1979, they had amounted to more than $2 billion.
This figure continued to rise as it reached $31.9 billion as of 2022 from official channels. This source of foreign reserves is vital in balancing Egypt’s payment deficit.
In 2022, Egypt imported goods worth $94.5 billion and exported goods worth $51.6 billion. This nearly $43 billion deficit is covered to a large extent by remittances.
In that sense, Egypt’s largest export would be human capital. However, depending heavily on it is highly risky as remittances are subject to vast externalities.
It is essential to highlight that Egypt’s current brain drain is not a sudden development but rather a direct consequence of half a century’s worth of policies that attempted to deal with the three major macroeconomic struggles of Egypt, 1) overpopulation and urbanization, 2) structural unemployment, and 3) balance-of-payments deficit, in a relatively short-term gains mindset.
These policies did not address the direct cause of these macroeconomic problems, education, and lack of robust and lively public and private industries. In some cases, it would seem that these policies seemed to amplify the already existing problems over the long run.
While attempting to rectify the macroeconomic issues presented here is beyond the scope of this paper, some policy recommendations can be put forth that allow the Egyptian state to secure more gains from the brain drain.
Firstly, the Egyptian government’s unregulated and seemingly unsupervised temporary emigration policy needs a maintained census of Egyptian workers abroad. This will enable the Egyptian state to develop projections and models for future remittance flows.
Secondly, there is an urgent need to eradicate the presence of a parallel currency market within Egypt as they tend to offer better rates than the official ones.
In January 1986, the Ministry of Emigration estimated that the actual remittances entering Egypt were closer to $10 billion, but only $2 billion entered the country through legal routes. The same trend has likely continued to the present moment.
And thirdly, there needs to be a directive to secure more investment-focused remittances. Most remittances that enter the Egyptian economy are geared toward consumptive practices. However, the dollar’s purchasing power in Egypt may allow for needs to be met with fewer dollars required. In that case, individuals may only decide to send what is needed to Egypt and invest the remaining amount elsewhere.
Therefore, there is a need to attract remittances for investment rather than consumption. A portal for investing in ongoing Egyptian projects is available online through government websites. This platform must work with the census policy to reach individuals abroad and procure their investments. The structure of ownership could be in the form of stocks/shared ownership with expected returns provided.
*Adham Shebl is a senior researcher at BUC’s Centre for Global Affairs. He graduated with a Master of Arts in Political Science with a specialization in International Relations from the American University in Cairo (AUC). His research interests include Security Studies, the History of Imperialism, the Development of Capital Relations, National Identity, and the Formation of Political Subjectivity.