Land center issues its report, today, about the impact of global economic crisis on the Egyptian economy and the rights of workers in Egypt, in the edition (77) of the series of economic and social rights. The report reviews, in four main axes, its sectors, where the first sector speaks about the main cause of the crisis, which was caused due to the low rates of profit in the global economy since the seventies. After the period of economic refreshment in the fifties and sixties, the phase of the seventieth started with a decline in profit rate rapidly, reaching, according to the International Monetary Fund estimates, the amount of 125 crisis of credibility so far. The reason that exacerbated the crisis of the capitalist world economy is the economic liberalization policies, where the strong Complexity that characterized the economy, through the interrelationship and interdependence between the economies of the world by transnational corporations, and the globalization of the economy, contributed to the spread of the crisis, later, in the various countries of the world, in many sectors, to reach an unprecedented deep crisis in the world economy, paid by the poor and workers in the world, in the withdrawal of the social gains obtained through the history of their struggle.
This section reviews the U.S. savings crisis, the Swedish banking crisis, the crisis of the Mexican peso crisis and the Asian tigers' crisis, where the report shows the size of the billions poured into the major countries to overcome the crisis. This section, then, reviews the implications of the crisis on the poor and developing countries, as the report shows increasing numbers of unemployed people, to reach 190 million, while they were only twenty millions Last year. The report also shows the number of poor the increased from last year by 100 million people in the world, those who earn less than a dollar a day. The section shows that overcoming the crisis, and to restore the economic recovery, will be implemented at the expense of the violation of rights of the poor in income and decent employment, security and a decent life. However weaknesses will continue, resulting from the breakdown of the system of economic and trade liberalization.
The second axis focuses on the crisis of the Egyptian economy, a fact which is predecessor to the global crisis, results from the adoption of the Egyptian regime to the policy of privatization and free market economy, as recommended by the IMF and the World Bank, leading to the resulting policies of the destruction of the Egyptian public sector and their impacts on the broad area of the Egyptian people, increasing rates impoverishment and deterioration of living conditions and low income, in addition to the unjust laws applied by the Egyptian government to pass the projects that aim for privatization and the negative impact on agriculture in Egypt, and the decrease of the cultivated area of cotton crop, which had a major impact on the textile industry in Egypt and the competitiveness of Egyptian cotton in the world. Besides, these decisions had led to an increasing unemployment and inflation rate, which is an indirect impoverishment in Egypt, so that the negative situation would affect the inability of the Egyptian economy to enter as competitor in the global economy.
This section shows the unstable rate of growth since 1999 to 2009, which ranged between 3.2% and 7.2% over the past ten years, which demonstrates the fragility of the Egyptian economic system, in addition to a decline in investment rates over the past ten years. That volume, in 97, has reached 21.3%, and fall in the last ten years to reach 16.9%, then it rebound in 2009 to reach 19.3%. This fall and instability emphasizes the fragile nature of the Egyptian economy which is based on non-productive grounds. The fall down of the investments volume to 16.9%, from 21.3%, drives us to question about the size of investments in the non-real estate and petroleum sectors, which cause this oscillation. In addition to high rates of poverty and unemployment rates that have not been seen since 1990; where 6% of the population, during the last year, has been classified in the sector of the extreme poverty. In addition, the number of unemployed people has soared, during the last year, from 2.2 million to 2.4 million people. Moreover, exports had declined by 16%, Suez Canal revenues had declined by 8.4%, tourism receipts had declined by 3.1%, and return of investment from Egyptians abroad had declined by 41%, and the decline in remittances from Egyptian abroad expatriates from 8.4 billion, in 2008, to 7.6 billion, in 2009. Besides, there was the deteriorating conditions and declining agricultural self-sufficiency, like in rates of wheat and increase the size of the food gap, which increased 40%, so we had to import about half of our wheat, import 3.8 million tons of maize, and 328 million tons of beans and 202 thousand tons of meat.
In addition, there was the degradation of the cotton crop in about one million acres in 1992, to 921 thousand acres in 1996, to 706 thousand acres in 2002, to 536 thousand acres in 2006, to about 300 thousand acres in 2009. This decrease had its negative and disastrous effects on workers in the field of cotton agriculture, and spinning and weaving industry. This also had led to the violation of the rights of citizens to adequate food, a decent life and decent work opportunities.
The third axis of the report deals with the impacts on the rights of workers in Egypt, where workers are considered as one of the most vulnerable sectors in the Egyptian people, who have borne the consequences of such policies of displacement, low-income, poor conditions at work, rising prices and large number of early retirements, as well as those policies that have made broad segment of professionals, who were in the past the foundation of the State in Egypt, drop their living conditions and degradation, as well as the transition to the ranks of workers, which led to massive protests among them. Then the global crisis brings to Egypt more bad consequences; businessmen exploited the economic crisis, using it as an allegation for more separation and dislocation of workers for trivial reasons, and leading to the displacement of workers in many locations without reasons, except the speeches about the effects of the crisis. In addition, the crisis has revealed the deterioration of the trade union official and the organization entrusted with defending the rights of workers in all locations, whether in the public sector or the private sector. But the strike of employees of the property taxes confirmed that meeting the demands of workers, their dreams of decent jobs and the organization of independent trade union can be achieved away from the formal union of workers.
This section shows that what has been sold from the public business sector companies has reached 314 companies until 2006. Where the outcome of sales has reached 32,737 billion pounds, where the privatization of these companies has been accompanied by the biggest corruption and organized looting of the wealth of banking.
The report describes the impact of these processes on the conditions of workers, where more than million and have workers who worked in the public sector have been ordered to leave the companies. In addition, about 400 thousand workers have been displaced under the allegation of early retirement, dismissal or other methods pursued by the Egyptian government to plunder the wealth's and the efforts of the Egyptians.
In addition, the report describes the deterioration of conditions of workers in the private sector, where there are no trade unions and employers to use the economic crisis as an allegation to dismiss the workers, and the infringement on their rights of salaries and allowances, which led to the growing of labor protests in 2007 to more than 750 protest and the number who participated in the protests has amounted to 1,250 million employees. Labor protests continued against the deterioration of the economic and social situation until the issuance of the report. Strikes and protests, in 2009, have increased for more than 70 strikes, involving more than 450 sites. These labor movement protests have achieved historic victories, as about 50 employees and employee in real estate taxes department were able to form their independent trade unions and equality of workers before General taxes.
The report reviews several strikes and protest movements, such as the movement of administrative of education employees, and movement of post offices employees and workers of Tanta linen company protests, in central Cairo, continued until the issuance of the report, in addition to more than a dozen other protests as cases models of rejection of the policies pursued by the Egyptian government.
The fourth axis deals with the impact of the crisis on the textile sector, where the textile sector is the most important sectors, not only in Egypt, but in the Middle East and Africa, because it includes the largest number of workers. This sector suffers a severe crisis brought on by the global crisis to worsen it, which is reflected in the conditions of workers. Salary of textile workers are considered as one of the least salaries in Egypt, in addition to hours of work that are up to 10 and 12 hours a day, beside the inhuman working conditions that reach the point of slavery witnessed in the departments dealing with factory workers, the silence of the great institutions of the State, particularly the Ministry of Manpower and investment to this situation, and the role of trade unions Laggard.
This section shows that the sabotaging policies pursued by the Egyptian government in the past twenty years for the destruction of this sector, which has witnessed the employment of more than a million workers in 38 textile companies of the public sector, through its negligence, non-replacement or renewal of the employment and training, leading to losses that had reached 32 billion pounds in this sector. This section, also, reviews several case models of spinning and weaving industries, whether in public or private sector businesses, including the national company in the city of Mahalla and Samoly factory, and of Tanta for Flax yarn and oil and Shebeen formerly (Andhra currently) and workers in Abu El-Seba' company. This section confirms the deterioration of the conditions of workers in this sector
The bottom line: that the textile sector in Egypt, which is under fierce attack by policies of privatization, is still paying the price of those policies in the current crisis, which were quick policies that gave the employers the argument for the liquidation and the displacement of workers in all sectors.
The report concludes with a number of concluding observations, notably that of workers in Egypt who suffer from at least two decades of the new policies pursued by the consequent Egyptian governments. Thus, large sector of workers in the public sector, after privatization, has suffered the displacement and serious losses suffered by the working class, on the qualitative and quantitative level, after fragmentation of the public sector. This problem has impacted a broad sectors of the Egyptian people, by offering lower living standards, which made protest against the conditions expands to include professionals, such as physicians and staff, as a result of the deterioration of their living standards, making them retard to the classes of workers. In such a crisis, workers in Egypt suffer arbitrary policies, an increasing liquidation and persecution by the departments at work, and by the state institutions that stand against the workers, in a clear alliance with investors.
The textile sector suffered from an organized sabotage under the privatization. After it had been the most important sectors in Egypt and comprising the largest number of workers in the Middle East and Africa, it is suffering now from deteriorating condition; it has the least amount of wages, in addition to the working hours that have reached 12 hours per day and working conditions that is deteriorated to the level of slavery labor.
The report concludes with a number of recommendations and concluding observations that call for avoiding the negative effects of the economic crisis, which would improve the conditions of workers in Egypt and ensure their rights to decent work and decent life.
To obtain a copy of the report please contact the Center or on our website