INTERVIEW: Targeting better quality jobs in Egypt
Niveen Wahish, Thursday 3 Sep 2020
Director of the International Labour Organisation’s Cairo Office Eric Oechslin talked to Ahram Weekly about key labour market challenges facing Egypt in the wake of the coronavirus pandemic

Eric Oechslin has been the director of the International Labour Organisation’s (ILO) Cairo Office and its Decent Work Team for North Africa since April 2019, having earlier been officer-in-charge of the organisation’s Cairo Office since June 2018.

He joined the ILO as a senior specialist for employers’ activities for the North African region in 2012 and was subsequently charged with providing technical and political support to employers’ organisations from 12 countries.

Among his achievements have been the establishment of human-resource academies in Algeria, Egypt, Tunisia, and soon Morocco, and assessments of business associations to guide them towards more members-oriented approaches.

In an interview with Al-Ahram Weekly, Oechslin explained what initial studies have had to say about how labour markets have reacted to the Covid-19 crisis and how this reflects on broader challenges to employment in the region.

It has been six months since countries around the world began taking measures to contain the spread of the Covid-19. How have these affected the labour market?

This is an unprecedented crisis, and we do not know when it will end. We have to wait until the availability of a vaccine. The crisis has influenced all aspects of life, travel, and relations with the family, and for the world of work it has had a huge impact. Every country has been affected with no exceptions.

Because of how the crisis has affected movement and trade, it will have repercussions on economic growth worldwide. We do not know yet what the full impact will be on unemployment, but initial surveys show that around 60 per cent of employees have been affected in terms of working hours and wages. The full impact on companies is also not yet clear, but a survey done with the National Council of Women (NCW) and the Egyptian Micro, Small and Medium Enterprises Development Agency (MSMEDA) on small and medium-sized enterprises owned by women showed that 79 per cent of businesses said the coronavirus had had a negative effect on their operations. Only two per cent said it had been positive.

We know that for some businesses such as supermarkets, the situation was more satisfactory because people could not go without food. Restaurants, however, were affected differently because they were closed for quite a long time, and there are still restrictions in terms of the capacity at which they are allowed to operate. Tourism was also severely affected. And so was the textiles sector, because exports stopped.

Because of the size of its domestic market, Egypt might be able to limit the effects on economic growth, according to the government. But it all depends on how long the crisis continues.

Why were women specifically affected?

The pandemic has exposed and exacerbated an already existing global care crisis. In normal circumstances, women perform a daily average of four hours and 25 minutes of unpaid care work, against one hour and 23 minutes for men. The coronavirus pandemic, along with the associated closures of schools, childcare, and other care facilities, has heavily increased the daily amount of time spent on unpaid care work.

This is particularly true for female health workers living in single-headed households who might have no other option but to care for their children and older parents themselves when they return from work, with the risk of infecting them with Covid-19. In addition, the informal economy as a whole has been seriously affected by the crisis, and women are a dominant part of the informal economy. We do not have exact figures yet, but we are afraid that the crisis has pushed women to stay at home more and away from the labour market.

In previous crises, the informal sector often held the economy together. Why are things different this time round?

This crisis is different from the financial crisis, when the informal economy remained intact and continued to support growth. During this crisis, domestic workers, for example, who are largely informal, could not travel to their workplace. And shops were also closed, and restrictions on movement affected their business. This is why what the government did to support people in the informal economy through cash transfers was so important.

In fact, all the measures taken by the government and the Central Bank of Egypt (CBE), such as the interest rate cuts and the deferral of sums owed by companies, were important in order to enable companies to pay their employees and maintain operations. Moving to the formal economy would be the best solution that the ILO can promote. The formal economy has a system of social protection: there is a contract with the employer, and employees can continue to work, unlike in the informal economy where there is no form of protection.

Unemployment in Egypt during the second quarter of 2020 is already higher than during the first quarter. How do you see unemployment trends going?

It is difficult to predict unemployment figures for the coming months. Even if there is an increase in unemployment, when the economy restarts again there will be an automatic boost. When things are back to normal, we will probably see an increase in hiring because the capacity is there, not like during the financial crisis. On the international level, it will also depend on the capacity of each country to stimulate the economy.

We know, for example, that in Egypt’s case when things are back to normal tourists will come back. The problem now is that people do not have either jobs or money. Next year hopefully things will be different.

How do you see the labour market changing after the coronavirus crisis is over? Is teleworking here to stay?

Probably there will be more teleworking than in the past. Some companies might continue teleworking if they find it to be more productive and saves on commutes in some cases, but it will be limited. Most people will go back to their offices. Some sectors might adopt the approach of allowing more flexibility and giving employees the possibility to work from home, but this will depend on how modern the economy is.

During the celebrations to mark 100 years of the ILO, the focus was on the future of work. In order to move forward and create the perspectives for a just and sustainable future we need to invest in people through a human-centred approach to the future of work. This means investing in jobs, skills, and social protection. It means supporting gender equality. It also means investing in the institutions of the labour market, so that wages are adequate, working hours are limited, and safety and health, as well as fundamental rights, at work are ensured.

It means adopting policies that promote an enabling environment for sustainable enterprises, economic growth, and decent work for all.

Do you see certain activities disappearing after the coronavirus crisis is over?

When you create a company, you need to ensure the sustainability of its activities. For example, if a company is created just to produce masks, its services will only be needed on a smaller scale after the crisis is over. Services such as deliveries that were already well developed in Egypt will continue. The use of applications on smart phones to facilitate deliveries will also continue.

I do not think any jobs will totally disappear, and no jobs that were here last year will be obsolete. We can have new forms of jobs in a more effective way. For example, we have seen during the crisis that carbon emissions decreased, so this is a chance to rethink jobs in a way to make them better for the planet, for the economy, and for the employee, but these jobs will not disappear altogether.

Some experts believe that though the Egyptian economy is creating jobs, they are not of the best quality. What needs to be done to ensure that more better-quality jobs are created?

The ILO’s core job is to help to create quality jobs. To create quality jobs, you need economic growth, production, and to ensure that wages are decent, and that is why we support social dialogue between employees and employers to ensure good working conditions and decent wages and to avoid precariousness and forced part-time jobs.

That is also why at the ILO we work with the government and social partners to improve this aspect, and we have programmes like “Better Work” and “Sustaining Competitive and Responsible Enterprises” (SCORE) to help create quality jobs. Part of the problem is the size of the informal economy, which does not provide any protection. That is why it is important for us to promote the formalisation of the informal economy. We cannot change things in one day, but we work with the Ministry of Manpower on labour inspections to be sure that proper standards are applied.

Why have efforts to encourage businesses to formalise not succeeded so far?

It’s not an easy issue. Very few countries have seen a decrease in the size of their informal economy. The Egyptian government is attempting to encourage businesses to formalise, and we are working with them on that. The ILO also did a survey with the Federation of Egyptian Industries (FEI) on obstacles to business in Egypt, and from there came the idea of having a “one-stop shop” for businesses. The FEI is working to facilitate the registration of companies and that may help.

One of the ways to encourage companies to formalise, for example, would be to allow companies that formalise not to pay their taxes immediately, but only after a certain period. There are different systems; we need to see what best suits Egypt. Sometimes there is also no clear border between what is formal and what is not; you can have a formal company, but one that hires some informal workers. We need to study why companies are doing that — it could be because of the rigidity of labour legislation.

What are the challenges facing Egypt’s labour market?

The low participation of women. Women represent only 25 per cent of the work force in Egypt. This is like other Middle East countries, but much less than in other economies worldwide. The indicators suggest that young Egyptian women seeking work face persistent, structural challenges in securing employment. Key obstacles include the high cost of childcare, the expectation that women carry out the majority of household responsibilities, negative attitudes toward women in the workplace, a lack of mobility, legal barriers, persistent wage gaps, and sexual harassment in the workplace.

The other challenge facing Egypt’s labour market is the country’s demographic trend and the need to absorb the large number of young people coming onto the job market every year. It is a challenge because of the country’s youthful population, and we need to provide young people with hope. This means we need to support the private sector in developing and exporting in order that it can employ more young people.

Why are Egypt’s young people not finding jobs?

The question is how we can match the labour market needs of companies with the skills of young people. Investment in skills anticipation and better labour market information systems are needed to make informed decisions. It is important to invest in preparing Egyptian youth for the future of work and the future labour market and to create lifelong learning and continuous education systems that support young people in the transition to the labour market.

How can more women find work?

In order to increase the share of women in the workforce, there is a need for a change of mindset among both men and women and to encourage women to continue their careers. We see that after their first child many women stop working, for example. We must also encourage more companies to recruit more women. With the FEI, we have developed the ILO Human Resources and Gender Academy to work with companies to show them that women are as good as men at work and then to encourage the recruitment of women, including to key management positions and the boards of companies.

The development of the care economy, and the possibility of having facilities at home to take care of parents and children, will also help both men and women at work. That is why it is important to see the development of this care economy that will provide support to households and also create jobs.

What is the ILO doing to help eradicate child labour?

This year, the Convention on the Worst Forms of Child Labour was ratified by all ILO member states, the only ILO convention that all its member states have ratified. That shows the global commitment on this issue.

In Egypt, a national action plan on child labour was launched by the Ministry of Manpower in 2018. Seventeen national partners support this national plan, and there is commitment from the government, local authorities, and the private sector to reduce and eventually eliminate the worst forms of child labour.

With the right priorities and the right mix of policies, including effective law-enforcement, access to education and social protection, the promotion of decent work for adults and youth, and social dialogue between the government and workers’ and employers’ organisations, the middle ground can be reached and child labour be eliminated.

How about families that depend on children’s work for an income? How can you convince them not to send their children out to work?

We understand that child labour is a complex problem that cannot be eradicated by the stroke of a pen. As a result, the ILO provides technical assistance to its member states to support them in the implementation of the child labour conventions.We also need to convince families that their children should not work and that alternatives such as machines can be found. We need to think about the future of children: they must go to school, they must be able to play, and they must be allowed to live their childhood.

In the past the ILO has had reservations about Egyptian laws governing the freedom of association. Has this changed today?

Since the discussion of new amendments to the trade unions law, we have continued the discussion with the authorities and launched a Better Work programme just before the coronavirus crisis under the auspices of the prime minister. We are now working with different partners in the ministries of manpower and international cooperation, and the unions to see how we can support the process.

We encourage a tripartite dialogue between companies, employees, and the government. Social dialogue is the key to the social development of the country. It exists at the national level to discuss the minimum wage, for instance, and it takes place at the sectoral, the local, and the workplace level. It is important that dialogue exists at the company level to ensure better working conditions and productivity. Social dialogue should be a win-win approach for both businesses and workers.

Will such efforts remove Egypt from the ILO’s blacklist of states violating the rights and freedoms of workers?

There is no “blacklist” at the ILO. There is a list of individual cases, which includes all kind of countries, and these are discussed every year at the International Labour Conference. However, this year the conference did not meet because of the coronavirus crisis, and no list was discussed.

The list is prepared and discussed every year by the ILO, which considers the efforts of each member state in the implementation of international labour standards.

*A version of this article appears in print in the 3 September, 2020 edition ofAl-Ahram Weekly