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Social insurance is a natural right for workers
Brother and sister labourers
Social insurance is one of the important social regimes, as it aims to protect workers, during their lives, from the dangerous effects that they face during their work times, like work injuries, disabilities, diseases, senility. The insurance is considered as an alternative to the wage that might take many forms, like compensations or pensions, according to each case, so as to guarantee a decent life for the worker and his family after him. Since, nearly, a century and half ago, the first legislations pertaining to retirements were passed in Egypt. This law was known as the law of Said, which was issued in 26/ 12/1854, then, on 11/1/1871, the law was renewed, known by Ishmael law. After that, on 21/6/1887, the law of Tewfik was passed. All those laws didn't have a broad social goal, but only the care of few sectors, like army workers, and the royal services workers.
Social insurance in Egypt:
After all the aforementioned trials, Egypt has known the social insurance in a scientific thesis, regarding it as a fundamental right protected by the country. Egyptian constitution has stated in article (27):"The country shall guarantee the services of the social insurance, healthcare insurance, the pensions, the incapability of working, the unemployment, and the senility for all citizens". Based on that clause, many laws were passed, for implementation, like:-
1- The social insurance law, no.79, for the year 1975, was passed, where it was applicable on every person who works for another one, whether in the private sector, or the public sector.
2- The law of retirement, insurance, and pensions in the armed forces, no.90, 1975.
3- The social insurance law, no.108, 1976, for the businessmen, or any person in the same legal situation.
4- The social insurance law for the workers abroad, which was issued in the no.50, for the year 1987, applying the rules of the law no. 79/75/108/76.
5- The comprehensive social insurance law no. 112, 1980.
Those laws were based on a philosophic concept; the separation between the institutions of the social insurance, and the departments of executive governmental work. It was based, also, upon the concept of protecting the financial and administrative independence for those boxes and their boards, and the investment in safe projects, so as to magnify its outcome without exposure to any risk, which threats the beneficiaries in the first place.
The Egyptian insurance system consists of 3 main components:-
1- The governmental insurance system, resembled in the national department of insurance and pensions, which is considered as the hugest insurance umbrella, where the number of members exceeds 19 million people.
2- The complementary insurance system.
3- The commercial insurance system, pertaining to life insurance.
Rights of workers and poor are in pains:
Despite the recognition by the International Labor Organization that Law No. 79 of 1975 is good law, as it includes many social benefits; those benefits witness many dangers that threat the interests of the beneficiaries of this system. Since the establishment of the National Investment Bank, by the law No. 119 of 1981, under the chairmanship of the Minister of Planning, the Bank obliged the insurance department to deposit the surplus of the social insurance funds in the investment bank, where it did not allow the insurance to use this surplus in any other investment. The bank, in turn, re-lends these funds to public bodies, and private and public companies. Then, a republican decree No. 418 of 2001, was issued, which replaced the Minister of planning by the minister of finance. Meanwhile, the insurance department turned 92.5% of the surplus funds to the National Investment Bank, which lent institutions, public bodies and private sectors. These institutions and sectors have not paid those funds till now. Then, a Republican Decree No. 422 of 2005 was issued, to include the Social Insurance Authority to the Ministry of finance, in a clear breach to the constitution, which prevents the inclusion of private capital to public money. The State, once again, affirmed its breach to the Egyptian constitution by the issuance of Ministerial Decree No. 273 of 2006, which included the revenues and expenses of the social insurance to the state budget. At that time, insurance debts were nearly 362 billion pounds that was not paid by the government, owned to 26.2 million citizens; 19.1 million insured, and 7.1 million pensioners, according to statistics from the Insurance Authority in 2006. This was not the end of the series of violations for the constitutional provisions in the field of funding pensions, but it extended more and more; the government did adopt the policy of privatization and caused thousands of workers to lose their jobs, deriving them to an early retirement. In addition, instead of obliging the new investors to pay the value of state pension, the government obliged the insurance department to pay the pension, even though it was not the legal deadline for paying these pensions. The state, also, paid the pension, the annual increases in pensions, and pensions of Sadat from the Social Security insurance funds, rather than paying them from the State budget, according to the law. Therefore, the funds have reached 55 million pounds in 2005.
Then, the problem of evasion of the insurance crisis did rise. It kept deepening and engraving, until it exceeded 6 billion pounds. The evasion of such funds is associated with the threat of lives of the insured persons, their families, and their future, which is in jeopardy by the loss of their money in such a horrible way. The result of such evasion and money waste has negatively impacted the paying of pensions to the insurers, a matter which is disbursed from the report of the General Authority for Insurance. For example, 32.5% of governmental officials were receiving a pension of less than 100 per month, more than 70% of retired persons who are granted governmental pensions receive less than 300 pounds per month, 15% do receive 300-500 pounds per month, and only 15% do receive 500 pounds or more per month. On comparing the previous statistics with the World Bank statistics; which have categorized people under poverty line as those, whose income is limited to $ 2 per day, which equivalent to 11 pounds per day for any individual, meaning that the family which has birth of only 4 offspring should have daily income 44 pounds, or 1320 per month; we find that the most optimistic word to describe our pensioners is that, they are in a flock. Even without counting large families in our statistics!!
Reforming the social security system:
We must reform the social security system, while developing the mean of granting privileges to users and pensioners. By looking at the amount of contributions paid by the participants, we would find that the Egyptian law has one of the highest insurance contributions payments in the world. The worker pays 40% of the insurance wage; 14% paid by employee, and 26% is paid by the employer. Therefore, the insurance remuneration is not commensurate in any way to achieve an adequate standard of living, where the maximum insurance remuneration is only 800 pound, without mentioning the tragic number of the minimum wage. Therefore, the insurance wage needs to be re-evaluated, and to be linked with variables of living and high prices.
After the Egyptian regime has turned into free market economy and applied the policy of privatization, the workers' situation has turned to be worse. Unemployment has been disseminated; it increased because jobs offered by the market are less than what are demanded.
Consequently, employers had the opportunity to press workers to accept bad conditions. For example, workers were obliged to accept the least insurance levels. In addition, the insurance department supervision was absent, particularly in the new industrial cities. Moreover, employers submitted incorrect data of the wages of workers, avoiding the reveal of the real wages of workers. Therefore, there is a necessity for a stronger supervision by the insurance department, and a need of the resolution of new laws that gives the department the right to supervise the wages of workers.
The center believes that the depletion of insurance funds must stop, and the laws must be more active. On the same time, the State is required to pay the insurance funds. It must refuse the indulgence of the Social Insurance Fund into the ministry of finance. In addition, the country must commit to the independence of the Funding box, and it shall invite human rights organizations, syndicates, and people's representatives in parliaments to unite efforts, in order to protect the insurance funds.