The Banking Executive Magazine - January 2022 Issue

The Labor Market in Egypt the labor markets. During recession, The national losses were felt mainly by the poor. Over one-quarter (25.2%) of Egyptian households lives under the absolute poverty line, and 4.8% of households live under the food poverty line. Egypt progressed continuously dur- ing the past years to a steady and sta- ble economy with an economic growth in parallel lines within most of its sectors, especially in construc- tion, financial services and technol- ogy, nominal GDP reached 363 billion dollars in 2020 equivalent to a GDP per capital of 3560 US dol- lars. The Egyptian economy suffered from more than two major events in last 30 years; the most recent, unemploy- ment started to rise due to the politi- cal instability following the 25 January 2011 revolution. Egypt has experienced a fall in both foreign in- vestment and tourism revenues, fol- lowed by a 60% drop in foreign exchange reserves, a 3% drop in growth, and a rapid devaluation of the Egyptian pound. Unemployment rates reached their peak with the highest rate of change at 35% in- crease since 2011, and it crossed the single digit barrier beyond 10% and remain as such. Two main challenges can be con- cluded to the structural deficiencies in Egypt. The first challenge is the rigidity and weakness of labor mar- ket facing external and internal crises, and the time to adjust to it. The second challenge is that unem- ployment reflects un-healthy labor market. New entrants to the labor market from the young people carry the main force and stress the current economic constraints. Young people account for nearly 22% of the Egypt- ian population, which they add about 600,000 new entrants each year that puts further pressure on the Egyptian labor market and with its al- ready limited opportunities. LABOR MARKET STRUCTURAL DEFICIENCIES IN EGYPT The socioeconomic characteristics of the unemployed in the Egyptian labor market reflect an inverted pyra- mid of unemployment, where unem- ployment rates rise among the educated, young, females, and urban areas. This is contrary to normal con- ditions in which the educated young population get better job opportuni- ties in developed countries. The main imbalances in the labor market is the occupation versus edu- cation mismatch in terms of both ISSUE 157 JANUARY 2022 the BANKING EXECUTIVE 39