Libya and the Egyptian economy

Hussein Suleiman , Thursday 29 Mar 2018

The conflict in Libya has cost the jobs of at least one million of the most vulnerable Egyptian workers, underlining the economic stakes of finding a solution

Egyptians cross from Libya
File Photo: Egyptians cross from Libya to Egypt through the Salloum land port gate on 2011 (Photo: courtesy of UN office for Coordination of Humanitarian Affairs "OCHA"website)

Hundreds of thousands of people have fled from Libya since the civil war broke out in 2011, threatening the safety and livelihoods of Libyans and foreigners alike.

Egypt has been particularly affected by the instability in Libya, as millions of Egyptians used to work in the country and have consequently had to flee the war to Egypt or other neighbouring countries.

Because of the geographical proximity of Libya, it has traditionally been easy for Egyptians to cross the border to seek jobs in the country even without prior permits or contracts.

Illegal migrants have long constituted a significant part of the Egyptian labour force in Libya, and this makes identifying the specific numbers, trends, and characteristics of the Egyptian labour force there a difficult task.

However, in 2010 the International Organisation for Migration (IOM) estimated that right before the Libyan Revolution and civil war between one and 1.5 million Egyptians were working in Libya, most of them illegally.

Egyptians also constituted the majority of foreign workers in Libya, estimated at a total of some 2.5 million.

When the war broke out, some 770,000 foreign workers fled the violence during its early stages. In the first two months of the war, 148,000 Egyptians returned from Libya either directly or through Tunisia, and the outflow continued in the following years as the conflict intensified.

By the middle of 2017, the number of foreign workers in Libya had shrunk to a mere 400,000, of whom nearly 70,000 were Egyptians.

However, since then the number of foreign workers has gone up again, and by early 2018 there were some 704,000 foreign workers in Libya, some 121,000 of whom were Egyptians.

As the country having the largest number of workers in Libya before 2011, Egypt has suffered from heavy economic losses as a result of the return of its workers during the civil war.

It is estimated that 99 per cent of Egyptian workers in Libya before the war were men of between 20 and 30 years of age. 93.7 per cent of these sent remittances home, and 77.8 per cent were the sole breadwinners of their respective families.

Some 85 per cent of the Egyptian workers in Libya were from rural areas, 28 per cent were illiterate, 33 per cent had received primary or preparatory education, 15 per cent had received vocational secondary education, and four per cent general secondary education.

Nine per cent of them had attended a post-secondary institute, and 11 per cent had a university degree or higher qualification.

Thus, some 80 per cent of the Egyptian workers in Libya had received an intermediate education (general or vocational secondary degree) or no education at all, according to an IOM survey.

Central Authority for Public Mobilisation and Statistics (CAPMAS) data indicating the latest poverty rates in Egypt by level of education and geographical distribution show that poverty decreases with education and that a large proportion of the population in Egypt’s rural areas lives in poverty compared to the population in urban ones.

From this poverty and unemployment data, it can be concluded that the Libyan market has been absorbing many people from the unemployed and poorer sections of the labour force in Egypt, predominantly unskilled workers, providing them with job opportunities and an income to send to their families back home.

The war in Libya thus cost at least one million of the most vulnerable Egyptians their jobs and cost their families an indispensable source of income.

Even if Egypt’s efforts to bring about stability and security in Libya were not necessary for humanitarian, national security and political purposes, they would be more than justified by the necessity of helping Egypt’s poor, giving them back the employment opportunities that were so cruelly cut short by the Libyan civil war.

The World Bank estimates that it could cost as much as $200 billion to restore Libya’s infrastructure, a process that might extend over the next 10 years provided that the armed conflict halts and a political settlement is reached in the country.

This reconstruction could provide hundreds of thousands of job opportunities for Libyans and foreigners alike and could absorb far more Egyptian workers than the country’s labour market did even before the present crisis, especially as construction was already the main sector of employment for Egyptians in Libya with 37 per cent of all Egyptian labour in the country working in the sector.

Reconstruction would also create opportunities for other groups in Egypt besides the unskilled labour that constitutes the majority of the country’s workers in Libya.

Reconstruction contracts could provide business opportunities for Egyptian companies in various sectors and could expand the market for Egyptian goods and services during the decade of reconstruction.

It could also create opportunities for highly skilled labour during the process, in order to build and improve Libyan human capital and assist the country in recovering from the damage of the war and decades of inefficient government.

Economic coordination between Egypt and Libya could bring about many mutual benefits over the next few years. Libya would have a flexible, affordable, and diversified labour supply just across its border, in addition to a commodity market and business community that could satisfy a large part of the Libyan economy’s needs during the reconstruction process.

On the other side, Egypt would benefit from having a much-needed market for its goods, services and labour, which might also help to ease the pressure of the current economic reform programme.

 The writer is a researcher in economics at the Al-Ahram Centre for Political and Strategic Studies.


*This article was first published in Al-Ahram Weekly

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