Exodus of workers from Libya puts stress on Egyptian economy

Marwa Hussein, Wednesday 16 Mar 2011

As 20 per cent of Egyptians in Libya flee, Egypt makes job creation plans and faces a sharp drop in remittances


As Egyptians workers fled Libya for home, some were spotted on the long road from Benghazi to the Salloum border hauling refrigerators and washing machines. Their attachment to these domestic items in spite of their anguish suggests the crucial importance of the money they made in Libya.

Some 90 per cent of Egyptians who lived in Libya are thought to be unskilled workers. “A major proportion of the Egyptians in Libya work in the construction sector or as farm labourers,” says a source at the Egyptian Ministry of Manpower. These comprise two of the lowest-paid sectors where similar work in Egypt is more seasonal and takes places under difficult conditions.

These returning expatriates -- and others who are likely to flee Libya in coming days -- will likely exert further pressure on the Egyptian economy, which will now face two main short-term challenges.

The first one will be to create new jobs for returnees in a country that already counted 2.4 million unemployed in 2009, according to official figures. These numbers may even need revision, following the announcement from the new Minister of Manpower, Ahmed Hassan El-Borai, that Egyptian unemployment might actually be as high as 19 per cent.

“The government is working on a global overview of employment which must also be applied to Egyptians who return from Libya”, says a source at the ministry.

“For those who are returning we have started to distribute certificates of compensation; we have a form for labourers and another for businessmen and entrepreneurs”, explains the source, who mentions similar measures taken by the Egyptian government when Gaddafi expelled Egyptians in the 1990s, following the first Iraq war. “We managed to obtain compensation for Egyptians who lost their employment and property. It is a responsibility which we cannot ignore," he adds.

Egypt will also have to cope with a substantial drop in workers' remittances sent from Libya. These are estimated at some US$254 million per annum, from a worldwide Egyptian remittance total of around $9.7 billion.

According to the Ministry of Foreign Affairs, around 185,000 Egyptians have left Libya since the beginning of the uprising. They are thought to make up 15 to 20 per cent of the total previously living in Egypt's strife-torn neighbour.

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