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NDP TOUTS JOB CREATION RESULTS
BY AMENA BAKR
Just over a year has passed since the ruling National
Democratic Party (NDP) unveiled its ambitious six-year job creation
plan, but already the government is hailing it as a success. Opposition
groups, in the meantime, are finding plenty of ammunition to deride
it.
The comprehensive job creation package, first revealed during President
Hosni Mubarak’s re-election campaign in August 2005, aims
to create 4.5 million jobs by 2011, which translates into an average
of 750,000 new jobs per year.
Not surprisingly, the NDP’s self-assessment has been upbeat.
In a report released last September entitled “We promised,
and delivered... and our success continues,” the NDP claimed
that during the program’s “very successful” first
year, some 716,000 jobs were created. While this actually represents
a 3.2-percent drop in the number of jobs created over the previous
year, the report shows a substantially higher level of job growth
in the all-important private sector, where 642,000 jobs were created
in FY 2005-06, a 16.7-percent increase over the previous fiscal
year.
Grossly inflated figures? Not really, says Abdel Fattah El Gibali,
head of the Economic Studies Unit at the Al-Ahram Center for Political
and Strategic Studies (ACPSS) and a member of the NDP’s economic
committee. He says the report, if anything, underestimates the number
of jobs created. “Since the printing of the report in September,
the [total] number of jobs created rose to 730,000, which is a big
achievement,” he told Business Monthly.
Still, the seemingly honey-coated figures have attracted opposition
like bees. Abdel Hamid El Ghazaly, an economics professor and head
of the economic committee of the banned but tolerated Muslim Brotherhood,
Egypt’s largest opposition group, wonders: “The Egyptian
people are not stupid, so how can the government think that we would
believe it has created so many jobs over such a short period?”
He says the government’s figure is deceptive because it doesn’t
take into account the number of jobs lost. “In the figure
they gave to us they made no attempt to show us how many people
went on early retirement,” he says. “Clearly, this number
is not the net amount.”
El Gibali insists that early retirements did not exceed 50,000 last
year. “So as you see, even if we deduct that total number
of new jobs created from the early [retirement] we would still have
at least 680,000 new jobs,” he says. He went on to explain
that the job creation figure is calculated by counting the total
number of social insurance applications submitted during the past
year by Egyptians between the ages of 15 and 60. “When anyone
gets a new job they have to apply for social insurance, and that’s
how we keep count of how many jobs were created,” he says.
Hogwash, scoffs Mounir Fakhry Abdel Nour, secretary general of the
Wafd Party, one of Egypt’s oldest political parties. “If
you go to the social insurance and ask them how many records they
have you will not find the full amount,” he says. Having investigated
this himself, he claims he challenged government officials to account
for the shortfall. “When I asked the government how they got
this figure they said that some people work without social insurance.”
El Gibali insists the NDP’s figures are indeed accurate, and
accuses the critics of merely playing politics. “I think we’ve
reached a point where it has become fashionable for anyone to say
[the government’s] figures are incorrect without understanding
what they stand for or where they came from,” he says.
Brushing aside the criticism, he emphasizes that the NDP is determined
to continue creating employment opportunities. Industry is expected
to play a leading role in this. Accordingly, the NDP plan envisions
the building and revamping of 1,000 public and private sector factories
by 2011, generating 1.5 million jobs in the process. “This
will not only help increase employment, but also increase our growth
levels as a nation,” says El Gibali.
Mohamed Raaef, an economics professor at Cairo University, highly
doubts the 1,000-factory target will ever be achieved. During FY
2005-06, the government only managed to build 39 factories and expand
another 62, according to its own figures. Unless the government
can pick up the pace, it will not achieve its goal, he says. “This
year it only built around 100. [If it continues at this rate] over
the coming six years we will have a maximum of 600 factories, so
in this sense the plan that was set is ridiculous.”
He also accuses the government of deceptively postponing any real
development until the end of the program. Its package projects a
gradual increase from 90 factories in FY 2005-06 to 123 in FY 2006-07
and eventually reaching 254 in FY 2010-11. “This is just a
cheap method of delaying their responsibility,” says Raeef.
“In reality, the NDP would be lucky if it achieves half its
set goal.”
However, Egypt’s official economic figures suggest the country
is moving in the right direction. With the economy growing at an
respectable 6.9 percent per year, privatization attracting foreign
investors, and exports up by 34 percent in 2005, there should be
plenty of new jobs to be found. Yet Abdel Nour seems hard pressed
to find them. “There’s no doubt that all the macroeconomic
indicators show positive results,” he says. “But with
that said, these improvements are only on the surface.”
Patience, insists El Gibali, who argues that the main reason the
average man on the street has not yet felt these positive economic
developments is because it takes time for macroeconomic policies
to trickle down to the individual level. How long will it take?
“The amount of time needed will vary according to many factors,
such as the general climate of our market and the Middle East economy
as a whole, so it’s really an undefined period,” he
states.
For the third of the country’s population living under the
$2 per day UN-defined poverty line, an “undefined” period
can feel like a lifetime, asserts El Ghazaly. “The government’s
real strategy is to make people think only about the bread they
will eat the following day and forget about democracy and their
true rights,” he argues.
Raaef adds that the “poor” are not the only ones that
are suffering these days. “Even the upper middle classes,
which include university professors such as myself, find it increasingly
hard to meet our needs and all the government does is simply disguise
inflation by giving [public] employees a 10-percent increase in
salaries each year, which is far from sufficient,” he complains.
He suggested that the best way to tackle the public’s perception
is to use the funds coming in from the nation’s privatization
program to build new roads, hospitals and schools. “This way
the people could see that the government is really trying to help.
Instead, what we’re seeing now is a decrease in pensions and
a monstrous inflation rate that’s eroding our pay,”
he says.
One year on, the NDP is touting its job creation package as a success.
“From the very beginning, we knew that this plan was an ambitious
one and that’s what we need right now,” says El Gibali.
“If we aim for anything less, we will achieve less.”
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