The political economy of poverty in Egypt (1975-2000): A sociological perspective

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The political economy of poverty inEgypt (1975-2000): A sociologicalperspectiveMohammed Abdel Hamid Ibrahim a ba United Arab Emirates Universityb Cairo UniversityPublished online: 14 Jul 2010.

To cite this article: Mohammed Abdel Hamid Ibrahim (2004) The political economy of poverty inEgypt (1975-2000): A sociological perspective, Islam and Christian–Muslim Relations, 15:4, 469-495

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Islam and Christian–Muslim Relations,Vol. 15, No. 4, 469–495, October 2004

The Political Economy of Poverty inEgypt (1975–2000): a SociologicalPerspectiveDr Mohammed Abdel Hamid IbrahimFaculty of Humanities and Social SciencesDepartment of SociologyUnited Arab Emirates UniversityPO Box [email protected], [email protected]

MOHAMMED ABDEL HAMID IBRAHIMUnited Arab Emirates University and Cairo University

ABSTRACT Studies of poverty in the 1990s have been very successful—more successful than thefight against the phenomenon itself. Had the efforts exerted to combat poverty equalled theconcern given to the study of the problem, the poor would have enjoyed better conditions and thelevel of poverty would have diminished locally and worldwide. The current study identifies therelation between impoverishment, marginalization of particular groups in society and the natureof the political, economic and social policies adopted by the state in Egypt, in one of the importantstages of social structure formation in the country—1975–2000. These policies play a direct rolein creating the mechanisms of impoverishment and marginalization in Egyptian society, leadingnaturally to producing and reproducing poverty.

Introduction: Study Subject, Inquiries and Main Components

In spite of the variability found in academic and political attempts to definepoverty, its nature and the characteristics of the poor, there is unanimity in theview that wherever there is poverty the need exists for a policy to contain it(H� ijazı, 1996, pp. 9–18; Jawharı, 1999, pp. 34–36; Khan, 2000, p. 4). The studyof poverty in Egypt reflects a relative variety and abundance of interest in theeconomic and statistical issues related to poverty and the poor. Studies from asociological perspective are rather few. In addition, the sociological interest, rareas it is, has only emerged recently. Such sociological studies also lack a holisticapproach that would describe the history of the poverty problem with thenecessary quantitative and qualitative analyses relating it to economic and socialpolicies, as well as its impact on all levels and types of people (Jawharı, 1999,pp. 49–50).

Consequently, the current study attempts to analyse the link between thedevelopment of the poverty phenomenon in Egypt and the nature of the socialand economic policies implemented by the state during the period 1975–2000.Its purpose is to explore the nature of the relation between the course thephenomenon takes and the nature of the political and economic performance of

Correspondence Address: Dr Mohammed Abdel Hamid Ibrahim, Faculty of Humanities and Social Sciences,Department of Sociology, United Arab Emirates University, PO Box 17771, UAE. Email:[email protected], [email protected]

0959-6410 Print/1469-9311 Online/04/040469-27 © 2004 CSIC and CMCU

DOI: 10.1080/0959641042000264512

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470 M. A. H. Ibrahim

the Egyptian state during an important stage in the development of the country’ssocial structure in the last quarter of the twentieth century. This approach isbased on the premise that poverty in Egypt is to be understood as a consequenceof complex structural mechanisms latent in the political economy of the state (cf.Firjanı, 1988, p. 15). The pivotal question of the study, based on this premise,is: How has the political economic action of the state, as represented in theadopted socio-economic policies in the period (1975–2000), led to creating astructural context which led to widening the impoverishing and marginalizingprocesses within the society? And what are the intermediary mechanismsinvolved?

The article attempts to answer the question by reviewing developments thatarose in the trends of poverty studies, locally and internationally, in the 1990s,and exploring the political economic perspective of the poverty phenomenon inaddition to the developments of poverty as witnessed in Egypt in the periodstudied. Also investigated are the essential role played by the type of political/economic action of the state in the same period which led to an extension of theimpoverishing and marginalizing processes within the society. The study isdivided into four parts: first, Approaches to Studying Poverty: the TheoreticalScene in the 1990s; second, Poverty from the Political Economy Perspective;third: Poverty in Egypt: the Course of the Phenomenon; and fourth, Poverty andthe Type of Politico-economic Action: Impoverishing and Marginalizing Mech-anisms

Approaches to Studying Poverty: the Theoretical Scene in the 1990s

Studies of poverty in the 1990s have been more successful than has the fightagainst the phenomenon itself. If the efforts exerted to combat poverty hadequalled the concern given to the study of the problem, the poor would haveenjoyed better conditions and the level of poverty would have diminished locallyand worldwide. This claim is supported by fact that, although the United Nationsdeclared 1996 to be an international year for eliminating poverty, inequality andgrowing concentrations of income, resources and wealth among people, coun-tries and companies, poverty has been increasing worldwide. According to thedata in United Nations Development Programme (UNDP) (1999, p. 3), theincome gap between the fifth of the world’s people living in the richest countriesand in the poorest was 74 to 1 in 1997, up from 60 to 1 in 1990 and 30 to 1in 1960. In the nineteenth century, too, inequality grew rapidly during the lastthree decades, in an era of rapid global integration. By the late 1990s the fifthof the world’s people living in the highest income countries enjoyed 86% of theworld’s gross domestic product (GDP) as against the bottom fifth’s 1%; 82% ofthe world export markets as against the bottom fifth’s 1%; 68% of foreign directinvestment as against the bottom fifth’s 1%; and 74% of world telephone lines,today’s basic means of communication, as against the bottom fifth’s 1.5%.

Considering this situation, the international community started to realize thateconomic growth does not necessarily lead to limiting the aggravating phenom-enon of poverty, so the phenomenon of poverty began to be seen from a differentperspective in the 1990s. This was reinforced by a change in outlook concerning

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The Political Economy of Poverty in Egypt 471

Figure 1. Source: United Nations (1998, p. 10).

the issue of development itself whereby the concept of ‘human development’based on people replaced the concept of ‘economic development’ based oneconomic growth. The latter had prevailed in the development literature of the1960s and 1970s and, to a lesser degree, the 1980s.

The 1990s witnessed the start of a development concept focusing on peopleas the real wealth of nations, making human development the end and economicdevelopment the means (UNDP, 1996, p. 1). Human development is the processof enlarging people’s choices—not just choices between different detergents,television channels or models of car, but choices that are created by expandinghuman capabilities and functions—what people do and can do in their lives(UNDP, 1999, p. 16). Concurrently, the concept of ‘human poverty’ replacedthat of ‘income poverty’, and the concept of ‘capability poverty’ went beyondthe limited meaning of income poverty, seeking a better coverage of the diversecomplex aspects of poverty. The concept of human poverty fits with humansustainable development (UNDP, 1998a, p. 18).

Figure 1 represents the major theoretical trends in studying the phenomenonof poverty in the 1990s, especially in the developing countries. The chart showsthat the theoretical scene of poverty studies can be summed up in two majortrends: the physiological deprivation model and the social deprivation model.The common denominator of the two approaches of the physiological depri-vation model (the income/consumption approach and the basic human needs

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approach) is determining poverty by measuring the inability to secure theminimum income/consumption level necessary to meet basic needs. The income/consumption approach basically emphasizes food while the basic human needsapproach extends the needs to include health and education as well.

Failure to secure the minimum income/consumption required to meet basicphysiological needs is termed absolute poverty, which is measured by estimatingthe proportion of people under (or on) the ‘poverty line’ (May, 2001, p. 24).

The ‘poverty line’ indicates ‘a level of income or spending under which it isnot possible to satisfy even minimum food needs’. The physiological deprivationmodel underlies the specification of the poverty level. While there are differentways of establishing this poverty line, two methods are in widespread use. Thefirst, the food energy method, estimates a food energy minimum required tosatisfy dietary energy (caloric) requirements and then determines the level ofincome/consumption at which this minimum is typically met. The second, thefood share method, estimates the minimum cost of a food basket which satisfiesthe food energy minimum and multiplies this by the non-food share in totalconsumption of a subgroup definitionally classified as poor (e.g. the bottom 20%of the distribution) (United Nations, 1998, pp. 3–4).

However, the physiological deprivation model met with several criticisms.Since this method bases its concept of poverty on failure to secure the minimumlevel of the basic services or standard of living, three queries stand out: How isthis minimum to be determined and who determines it? Second, what is thenature of the accepted minimum standard of living? Third, who deems itacceptable? (May, 2001, p. 25). These queries shed light on aspects of deficiencylatent in this model and expose the arbitrariness in both determining the povertyline (�Isawı, 1995, p. 19) and defining the nature of (the accepted level of) basichuman needs. Consequently, the social deprivation model aimed to go beyondthe economic view of poverty because poverty embodies multidimensionalphenomena and we therefore need to adopt a comprehensive view of poverty—one that recognizes that it is more than a shortage of income. Hence, understand-ing poverty must go beyond considering it a ‘mere deficiency in income or eveninability to meet the basic needs’ (Firjanı, 1998, p. 2).

As for the social deprivation model, it includes three major approaches:

• the human poverty approach;• the social exclusion approach;• the participatory approach.

The human poverty approach emphasizes human capabilities. It adopts theconceptualization presented by the 1998 Nobel Prize winning economistAmartya Sen who conceptualizes poverty or deprivation in terms of the absenceof certain basic capabilities to function. Sen’s underlying idea is that povertyshould include both what we can or cannot do (capabilities) and what we are orare not doing (functions) (United Nations, 1998, p. 5).

The concept of capabilities is thus related to the wider concept of entitlements,which focuses on the assets, or endowments, of the poor (May, 2001, p. 29).Clearly, people’s capabilities are innumerable and vary with time and place.However, at all levels of development, there are certain capabilities that are

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essential for human development and without them many choices in life wouldnot be available. These are the capabilities to lead long and healthy lives, toacquire knowledge and to have access to the resources needed for a decentstandard of living (UNDP, 1999, p. 16).

We notice here that the bases underlying the concepts of human poverty andhuman development are almost identical: human development means enlargingpeople’s choices, and fundamental to enlarging these choices is building humancapabilities. On the other hand, human poverty leads to these choices beingalmost nil for the poor. The absence or restriction of these choices leads tofailure to form basic human capabilities, which naturally leads to ‘poor capa-bility’.

UNDP (1996, p. 110) proposed a human poverty index which attempts to pindown certain important elements of human poverty. The index includes threeaspects of deprivation related to longevity, knowledge and standard of living.Longevity is identified by the percentage of people expected to die before theage of 40. Knowledge is identified by the percentage of adults who are illiterate.Standard of living is represented as a composite of three variables: access tohealth services; access to safe water; and level of malnutrition in children underfive years old.

As for the social exclusion approach, it comes very close to the ‘relativedeprivation’ concept of poverty. The underlying idea is that poverty, or depri-vation, is best regarded as a lack of the resources required to participate inactivities and enjoy living standards that are customary or widely accepted insociety. The social exclusion approach connects poverty closely with issues ofcitizenship and social integration and their associated resource requirements(United Nations, 1998, p. 5).

This approach complements the human poverty approach because the latter,focusing on human capabilities, has expanded them to include, in addition to thebasic capabilities, others such as political, social, economic and cultural free-doms. It also embraces the sense of community, opportunities for being creativeand productive, self–respect and human rights. Nevertheless, human develop-ment is more than just achieving these capabilities; it is also the process ofpursuing them in a way that is equitable, participatory, productive and sustain-able (UNDP, 1999, p. 16). Moreover, poverty in capabilities is considered abasic marginalizing factor, as will be illustrated later. These two approachestherefore complement one another, seeking to overcome the deficient assessmentof poverty based on factors of limited income alone. They go beyond that toanalytic frameworks that are more profound and multifaceted. This will serve forthe recognition of poverty from a politico-economic perspective. However,before proceeding further, a review of the participatory approach to assessingpoverty is in order. This approach is considered an essential tool for integratingthe viewpoint of the poor in both analysing poverty and determining strategiesto alleviate its effects (Brock, 2000). It is an approach that takes the views of thepoor themselves as the starting point (United Nations, 1998, p. 5), i.e. thesubjects of the research participate with the researcher in reaching an under-standing of the phenomenon. This gives people in general and the poor inparticular the ability to express their subjective views concerning poverty and the

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distinction between the haves and have-nots (�Isawı, 1998, p. 7). This approachregards the poor not as informers but as analysts (May, 2001, p. 45). In the early1990s the participatory approach was developed to enhance the participation ofthe poor in the decision-making processes that alleviate the effect of poverty inaddition to giving them a role to play in the application (for more detailsconcerning the definitions involved and the attempts undertaken in Africa, Asiaand Latin America, see Brock, 2000).

While this approach is not so much a way of conceptualizing poverty (UnitedNations, 1998, p. 5), it is still a useful means of involving the most importantparty to the issue in determining poverty, formulating the policies that alleviateits dire consequences, and the application of these policies (McGee & Norton,2000). On the other hand, since poverty is such a complex phenomenon, goingbeyond income levels and comprising several human factors (lack of capabilitiesor the choices necessary to form these capabilities) and social dimensions(vulnerability and exclusion), no one approach, however numerous its indicatorsand analytic abilities, can cover its complexity and multidimensionality. Conse-quently, UNDP (2001) proposes a composite measurement comprising theindicators involved in the theoretical models we have set out. It takes intoconsideration the nature of the link between ‘human poverty’ and ‘humandevelopment’ as set out in Table 1.

This review shows how the approaches to studying poverty attempted in the1990s to shift from focusing on ‘economic poverty’ to ‘human poverty’, andfrom poverty of income to poverty of capabilities in an endeavour to monitor thedifferent and complex aspects of poverty. Political economy can enable us toestablish a better understanding of this phenomenon not only with its multidi-mensional complex identity but also within the context and through the mecha-nisms of the structural changes in the society under consideration. The followingsection will attempt this.

Poverty from the Political Economy Perspective

Political economy is defined as the science of the laws that govern economic andsocial relations that arise between the individual members of society throughmaterial things and services. These are the relations that have to do with theproduction and distribution of material goods and services which satisfy people’sneeds in society, that is to say, they are necessary to the material and culturallife of the members of a society (Duwaydar, 1978, p. 20). Clearly, the laws thatgovern relations based on the production and distribution of goods and servicestake on a specific character in the context of the social structure studied here.This cannot be understood without analysing on the one hand the political,economic and social mechanisms overlying this structure, and on the other, thetransformations of political, economic and social structures.

In this manner, we can, for example, monitor the relation between the methodsused by the state to allocate or distribute available resources or services in thesociety, that is, particular laws, policies and politico-economic measures (re-

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Table 1.

Decent standard Participation orLongevityIndex/indicator Knowledge of living exclusion

(1) AdultHDI Life expectancy GDP per capitailliteracy (purchasingat birth(2) combined power parity

US$)enrolment ratioHPI 1 Probability at Deprivation inAdult illiteracy

economic supplybirth of notmeasured by:surviving to age

40 (1) Percentageof people notusing improvedwater sources(2) Percentageof childrenunder five whoare underweight

Percentage ofHPI 2 Long-termProbability at Percentage ofunemploymentadults lackingbirth of not people living(twelve monthsfunctionalsurviving to age below theor more)income povertyliteracy skills60

line (50% ofmediandisposablehouseholdincome)

GDI Female and Estimated(1) Female andmale adultmale life female and maleliteracy ratesexpectancy at earned income,

birth (2) Female and reflectingwomen’s andmale combinedmen’s commandprimary,

secondary and over resourcesand females andtertiary

enrolment ratios link to theircontrol ofresources

HPI 1, Human Poverty Index 1; HPI 2, Human Poverty Index 2; GDI, Gender-relatedDevelopment Index.Source: UNDP (2001, p. 14).

ferred to as the type of politico-economic performance of the state). It is alsopossible to monitor the effects of these methods on the way wealth and income(and power) are distributed in the society, the consequent expected effect on theway wealth/poverty multiplies in the society and the identity of the benefiting

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groups (the rich) and the losing groups (the poor). It is not possible to discusspoverty in isolation without considering issues of inequality and their link to theunequal distribution of wealth and power in society. The latter point occupies thecentre of interest in political economy. This will enable us to monitor well boththe strategies adopted by the various social powers to realize their political,economic and social aims and the effect on the variability and/or continuity ofthe state’s politico-economic project.

If our basic premise is that poverty should be seen as a result of a complexconstruction process that lies at the heart of the political economy of the state,we need to deconstruct this process.

The first stage in its deconstruction is to look at the phenomenon of povertyitself and the extent to which it leads to the undermining of human capabilities—lacking or failing to form them—this being a symptom of a wider constructionprocess which is impoverishment, leading to marginalization of individuals anddepriving them of participation in the various forms of political, economic,social and cultural activity. This takes place as a result of the widening circlesof material and human deprivation that afflict them as well as their exclusionfrom accessing the social resources or conditions facilitating self-expression (orrealization of interests) in an independent way within the prevalent context ofmorals and institutions (Castells, 1998, p. 9).

Therefore, impoverishment, and the consequent Marginalization, goes be-yond the phenomenon of poverty although poverty is a major cause. It isnot simply lacking material and human resources; it is, further, lackingknowledge, power and influence as well as the political rights and inclusionin the labour market. So Marginalization occurs when people are systemat-ically excluded from meaningful participation in economic, social, politi-cal, cultural and other forms of human activity in their communities andthus are denied the opportunity to fulfil themselves as human beings. Thusthe continuity of poverty will lead to Marginalization. (Jenson, 2000,pp. 1–2)

This is illustrated in Figure 2. The chart represents impoverishment and theconsequent marginalization in their various aspects. This process acquires itssignificance and structural character within the context of the state’s politico-economic action, which results in a particular type of development.

Consequently, we can deconstruct the complex construction process latent inthe heart of the political economy of the state, which leads to the production andreproduction of impoverishment and marginalization. This can be done throughidentifying the nature of the economic and social policies applied by the state inorganizing the life of its citizens. ‘There is unanimity of opinion that poverty isnothing but the outcome of the economic and social policies adopted by the stateto organize the life of its citizens’ (Jawharı, 1999, p. 21).

The objective of the current study is to identify the nature of the relationbetween impoverishment, with poverty as its main symptom as well as theresulting marginalization of particular groups in the society, and the political,economic and social policies adopted by the state in Egypt during one of the

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Figure 2.

important stages of the formation of the country’s social structure (1975–2000),which we refer to as the nature of the politico-economic action of the statedefining the essence of the political economy of the whole society. So we shallmove now to our second point—identifying the course the phenomenon ofpoverty has taken in Egypt in the period under consideration, and subsequentlyto our third point—the nature of the politico-economic performance of the stateand the role it plays in creating the mechanisms of impoverishment andmarginalization in the Egyptian society, leading naturally to producing andreproducing poverty in the following manner.

Poverty in Egypt: the Course of the Phenomenon

We cannot identify the course the phenomenon of poverty has taken without firstidentifying the trends and approaches that prevail in assessing this phenomenonin the period studied. Although these trends are numerous and varied—andsometimes contradictory—we can classify them in three major categories:

1. assessing the ratio of poverty and the poor based on income/consumption(basically poverty line income);

2. assessing the ratio of poverty and the poor based on human poverty;3. assessing the ratio of poverty and the poor based on the participation

approach.

(1) Income/Consumption Approach

The researcher monitoring and assessing poverty in Egypt will notice the greatpreponderance of this approach, as demonstrated in Table 2. This modelillustrates the sharp discrepancy between these approaches, reflecting thedeficiency we have previously indicated. We only need to assert here that thisdiscrepancy is the result of there being various ways of calculating the povertyline in addition to the arbitrary way in which it is determined. The result is a

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478 M. A. H. IbrahimT

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wide divergence in calculations of both the poverty line and the numbers of thepoor in rural and urban Egypt. For instance, the percentage of the poor in therural areas (1990/91) ranges between 28.3% ( Laythı and Khayr al-Dın assess-ments) and 43% (Karıma Karım assessments) (�Isawı, 1995, p. 26). The sameapplies to assessments of the percentage of the poor in urban areas; it rangesbetween 35.9% and 49% (Karıma Karım assessments). The discrepancies are notnegligible; ‘sometimes it is impossible to ignore them’ (H� ijazı, 1996, p. 90). Thedifference between the lowest and highest assessments of the percentage of thepoor in rural areas (1991/92) amounts to 14.7%.

(2) Human Poverty Approach

While the measurement and assessment of poverty and the poor in Egyptaccording to the income criterion are covered by many and varied studies,assessment of the percentage of the poor based on the human poverty approachhas taken place extremely rarely. As far as this researcher knows, there has beenonly one attempt, presented in the Egypt Human Development Report (1996).This was done on the basis of what the compiler calls a ‘capability povertymeasure’. According to the data provided by a survey of the demographic andhealth conditions in Egypt, this capability was assessed by measuring:

• the rate of underweight children under age five;• the rate of delivery of infants without the supervision of a physician and/or

nurse/trained midwife;• the rate of illiteracy in females over the age of five.

Consideration of these three measures led to a basic finding: ‘capability poverty’exceeds ‘income poverty’ in Egypt. While around 23% of the total populationsuffer income poverty, more than one-third (34%) are afflicted with capabilitypoverty—suffering from human deprivation. The report comes up with aremarkable finding when it compares ‘capability poverty’ and ‘income poverty’in rural and urban areas. It transpires that ‘capability poverty’ in rural areasexceeds ‘income poverty’ (43% against 23%) while in urban areas the reverseis true (21% for capability against 23% for income). The 1998/99 Egypt HumanDevelopment Report therefore asserts that the rural areas, especially in UpperEgypt, still contain the groups suffering most from human deprivation (EgyptHuman Development Report, 1996, pp. 3–4; 2000, p. 11).

(3) Assessing Rates of Poverty and the Poor Using the Participation Approach

As mentioned above, the participation approach involves people, especially thepoor, in assessing their own conditions. The poor are not considered asinformants, but rather as analysts who share in formulating the visualization ofpoverty. However, this method is expensive and requires researchers who haveexperience with the tools of participatory research. Researchers also needtraining on the use of such tools as are mentioned by �Isawı in his studyconducted within the framework of Egyptian human development, using thisapproach (�Isawı, 1995).

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Considering the demanding requirements of this approach, the researcherresorted to a compromise and used a partially participatory approach—’semi-participatory assessment’—ss follows:

• administering a questionnaire to a sample of poor and non-poor families(2,100 families) in the last quarter of 1996;

• carrying out in-depth interviews with a limited sample (70 families in late1996) with the objective of discovering the details of their lives and conductwith the poor, in addition to their concepts and visualizations of how toeliminate poverty.

The most important findings of this endeavour were as follows.

1. Self-sssessment of the people of their standard of living identified 16% of thepopulation as poor at the national level: 13% in urban areas and 19% in ruralareas. These rates are low even compared with the rate calculated accordingto the low poverty line in the Egypt Human Development Report (1996).

2. The responses of the families to the question of whether ‘poor’ applied tothem gave a positive rate of 24% at the national level: 16% urban and 31%rural—a high rate compared to the rate they assessed for their standard ofliving.

3. The responses of the families to the question of whether ‘poor’ applied totheir neighbours gave a positive rate of 43% at the national level (close to the48% of the poverty line measure): 30% urban and 55% rural (close to the50% of the poverty line measure).

4. The responses of the families to the question of whether ‘rich’ or ‘well-off’applied to them gave, indirectly, a poverty rate of 36% at the national level(less than the intuitive direct estimation of the level of the neighbours of43%): 23% urban and 48% rural (see a more detailed account in �Isawı, 1998,pp. 10–16).

Despite the importance of the participation approach in identifying the opinionsof the poor concerning the identification of poverty—a step to be followed byothers in the process of realizing the goal of involving them in setting andapplying anti-poverty policies—the measures adopted in �Isawı (1998) and usedby the Egypt Human Development Report (1996) in determining rates of povertyand assessing the poor in a participatory way (Egypt Human DevelopmentReport, 1996, Overview, p. 3) raise doubts concerning the proper application ofthis principle, and even in the partial sense of the methodological proceduresrequired for its application (McGee & Norton, 2000). What is semi-participatoryassessment? What are its limits? Is it confined to in-depth interviews with alimited sample of the poor, as applied in the stage following conducting thequestionnaire? The study did not explain the sampling method—a fundamentalissue to secure the proper application of the approach as with in-depth interviewsin all qualitative studies. In addition, the use of the questionnaire gives theresearcher control of the situation; the subjects merely responding to thequestions. It is of course assumed that these subjects are literate—a criterion thatmay not apply to all the poor.

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Table 3. Assessment of the ratio of the families below poverty lines, 1958/59–1984

1981 1984Area 1958/59 1964/65 1974/75

Rural 38.0 26.80 43.044.0 47.20Urban 51.1030.0 44.027.80 34.5

43.70 49.10National

Source: Farah (1994, p. 145).

However, we are not presenting an alternative to this approach or any of theother approaches we have reviewed, this not being an objective of the study. Ourpurpose is merely to explore the overall picture of the approaches offeringassessments of poverty and the poor in Egypt and the discrepancies betweenthem that sometimes amount to contradictions.

If we use these attempts at assessment to discern the course of the phenom-enon of poverty in Egyptian society during the period studied, the discrepancybetween them will not only complicate our task, but will also create a variety ofjudgements and opinions when it comes to describing the course of the problemand the nature of the relevant developments. This is confirmed by the followingfacts.

(1) An assessment supported by statistics asserts that the phenomenon ofpoverty grew steadily in the period 1974–84 as illustrated by the data in Table3. The data demonstrate how poverty—taking the measure of families below thepoverty line—declined in rural areas from 38% in 1958/59 to 26.8% in 1964/65.However, the rate increased dramatically after that to 44% in 1974/75 and then47% in 1984. The same trend also applies to the urban poor where familiesbelow the poverty line increased from 27.8% in 1964/65 to 44% in 1981 andthen hit 51% in 1984.

(2) �Isawı (1995) asserts that the percentage of the poor in rural Egyptdeclined from 43% in 1974/75 to around 30% or less in 1981/82. It then roseagain to 42–46% in 1990/91, i.e. to a level close to that of 1974/75 or a littlehigher. The rate of urban poverty went down from 33% in 1974/75 to about 30%or less in 1981/82 only to rise again to 38–45% in 1990/91, i.e. remarkablyhigher than the rate of 1974/75 (�Isawı, 1995, p. 20). The decline in the povertyrate during the mid-1970s and the early 1980s was due to the high rates ofremittance by Egyptian expatriates in that period. These remittances rose inrelation to GDP from 4% in 1975 to 13% and demonstrated the greatest increaseof any factor in the Egyptian economy (Firjanı, 1988, p. 217).

(3) According to the data in the World Bank (1998/99, table 4, p. 196) report,about 52% of the population lived on less than US$2 per day, and of them 7.6%lived on less than US$1 daily (ultra poor).

(4) Some assessments refer to a rise in the rate of poverty from 29% of thepopulation in 1981/82 to 35% in 1990/91. The data of 1995/96 put 60% of thepopulation close to the poverty line (World Bank, 2001, p. 56).

(5) The assessment given in the Egypt Human Development Report (1996)should be mentioned here as exploring the significance of the numbers it gives

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Table 4. Trends in poverty in Egypt, 1990/91–1995/96

1990/91 1995/96

RuralRuralUrban and urbanRural Rural and urbanUrban

Ratio of the 24.9 23.3 22.528.6 22.920.3poor to the totalpopulation (%)Poverty gap 4.64.5 4.94.3 4.4 4.3Distribution of 100 56.164.2 43.935.8 100the poor (%) tothe populationIn millions 8.493 4.737 13.230 7 .563 5.910 14.473

Source: World Bank (2001, p. 62).

for the development of the course the phenomenon of poverty took in the period1990/91–1995/96. This is demonstrated in Table 4. These assessments indicatea decline in the percentage of the poor in rural areas from 28.6% (1990/91) to23.3% (1994/95) as against a slight rise in the percentage of urban poor from20.3% (1990/91) to 22.5% (1994/95). The general trend is a decline in thepercentage of the poor in Egypt from about 25% (1990/91) to 23% (1994/95).

(6) According to the figures for income/consumption/spending in 1995/96, thepercentage of the poor is 43.5% of the total urban population while in rural areasit is 46.9%, making the national rate 45% (Laythı, 1998, p. 152).

(7) Human poverty assessment indicates a remarkable rise in capabilitypoverty in rural areas (43%) as against 23% for income poverty. This means thatrural Egypt still contains the most deprived social groups and that more than athird of the population of Egypt are deprived.

(8) Poverty rate data from about 80 countries were collected, six of which liein the Middle East and North Africa (Morocco, Algeria, Tunisia, Jordan, theWest Bank and Gaza Strip (Occupied Palestine) and Yemen), as well as Egypt,in 1996. Of all these countries, only Yemen and the West Bank and Gaza Stripsurpass Egypt in the rate of poverty. The Yemeni case has to be seen in the lightof the country’s limited income compared to Egypt (US$260 per capita perannum as against US$1,100). And in the West Bank and Gaza Strip, there is alink between the current political events and poverty (World Bank, 2001, p. 64).

The main result that stands out from the previous assessments, in spite of allthe discrepancies, is that poverty took an upward turn in Egypt in the last quarterof the twentieth century.

This rising trend can only be understood in the context of the continuousincrease in the mechanisms of impoverishment and marginalization taking placein Egyptian society. These mechanisms are closely related to the type ofpolitico-economic action undertaken by the state. This will be illustrated in thefollowing section.

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Poverty and the Type of Politico-Economic Action: Impoverishing andMarginalizing Mechanisms

The term ‘politico-economic action of the state’ is used in this study to mean theeconomic and social measures taken by the state in the period (1975–2000) andthe resultant particular type of development which created a structural contextthat led to increasing impoverishment and marginalization. This is evidenced bythe upward trend taken by the phenomenon of poverty as shown in the previoussection.

Linking the politico-economic action of the state with the accompanyingpolitical and economic policies forming the developmental strategy of the statein the last quarter of the twentieth century will certainly help us present astructural interpretation of the increasing impoverishment and marginalization. Italso helps explain the nature of the success or failure experienced in combatingpoverty, since the success or failure of anti-poverty strategies depends on thepolitical support available for these strategies: ‘designing poverty reductionstrategies is often less problem than marshalling political support for them; aprincipal reason is that the poor themselves lack political power and influence’(UNDP, 1998a, p. 59)

The features of the politico-economic action of the state took shape after amajor shift that took place in the mid-1970s (1974) when the state adopted the‘open-door policy’. These features were further manipulated with the economicreforms and adaptations of the early 1990s.

In the first phase, the then new regime completely dismantled the mostimportant premises of the previous regime (the Nasser regime) by doing awaywith the two major bases on which it had relied: corporatism and state capitalism(Waterbury, 1983, p. 429). The open-door policy was the beginning of afundamental change in economic social policy, with the claim that this wouldencourage private investment, both local and foreign, rejuvenate the productivityof the Egyptian economy and increase the rates of capital accumulation. To thisend, the regime passed a number of laws and legislative and executive measuresaimed at supporting private capital, encouraging individual initiative, giving freerein to private enterprise and lifting the restrictions that obstructed its entry intofields of investment of vital economic importance and strategic activities fromwhich it had previously been excluded (such as the oil and mineral industries).In addition, the principle of personal property was established as the statemodified the structure of personal property, increasing the limit of desert landholdings to 200 feddans (acres) for an individual and 300 for a family. Forcompanies, this limit was even raised to 50,000 feddans. The relation betweenlandlord and tenant was also liberalized to lift provisions applied to agriculturalland (under Law 36 of 1992). This annulled measures previously introduced byseveral agricultural reform laws passed since 1952 (Abdel-Khalek, 1980,pp. 259–279; Hopkins & Westergaard, 1998, pp. 6–7). One basic fact should bestressed here: these policies failed to achieve their objectives with regard to bothincreasing capital accumulation and encouraging private investment. Indicatorsshow that most investments were made in banks, tourism and luxury housing;productive activities, especially industry, agriculture and animal resources, were

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almost neglected (Toth, 1998, p. 75). These policies did not lead to an improve-ment in the overall efficiency of the Egyptian economy by supporting itsproductivity and export capabilities. On the contrary, they reinforced the mech-anisms of dependence on other countries and the loss of minimal levels ofeconomic independence (see details in Ghunaym, 1986; �Isawı, 1989; Bush &Bromley, 1996). On the level of social inequality, these policies effected achange in the matrix of social affiliations in society, creating new mechanismsof social privilege or impoverishment. Private capital groups benefited bothinside and outside the country and the priorities of economic work and develop-ment were reversed. A new coalition between local and foreign capital and thestate was established. Dependence became more deeply rooted. Differences inthe distribution of income and wealth widened. The nouveaux riches, with theirhigher purchasing power, controlled the prioritization of production and exports.With the state giving up its role in directing the economy and regulating its pace,it lost the ability to mobilize savings for the purpose of development and sankinto debt in an unprecedented fashion, putting more obstacles in the way offuture development (�Isawı, 1989, p. 220).

In this context, the characteristics of the second stage of politico-economicaction became formalized, since the state found an escape in the face of themounting crisis only to succumb to the demands of the international institutionsto reform the Egyptian economy. In 1991 the government approved a pro-gramme of economic reform and structural adaptation. The signing of theEconomic Reform Agreement in May 1991 with the International MonetaryFund was not the first such step; it was preceded in 1986 by the Egyptianprogramme targeting a growth rate high enough to rectify economic forces, andin 1987 the government reached an agreement with the Paris Club to reschedulea portion of the foreign debt. Nevertheless, the attempts at reform wereconducted with great caution and misgivings, especially after the attempt to raisethe prices of certain basic services and commodities in 1977, which ended inalarming popular disturbances on 17/18 January 1977 (Economic and SocialCommission for Western Asia (ESCWA), 1999, p. 47).

However, the early 1990s brought causes sufficient to force the government toaccept the international institutions’ conditions. Some of the most important ofthese causes were as follows (ESCWA, 1999, pp. 47–48).

• The general budget deficit at 31.59% of GDP. This increased further to35.59% of GDP in the two years 1990 and 1991, with inflation rising to 21.4%for 1990 and 20.7% for 1991.

• Imbalances in the structure of the economic sectors and productive unitsleading to more burdens on the general budget. In addition, the dependence ofthe Egyptian economy on oil revenues, expatriates’ remittances, tourism andthe Suez Canal (rent sources) is not a stable option.

• The rise of unemployment rates to 8.7% of the total workforce in 1990/91, andclimbing to 14% at the end of 1992.

• The inability to finance the investments needed for starting and maintaininginfrastructure projects, and the private sector’s turning away from develop-ment projects.

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Consequently, the state brought in several economic and social policies aimed atreducing spending and maximizing revenues in various ways, including thereduction of public spending especially on subsidies for basic goods andservices, suspension of some state services, charging for part of the servicesoffered, liberalizing prices by leaving them to market forces, lifting any institu-tional or legal restriction on them, and giving incentives to the local and foreignprivate sector to the point of spoiling it. This also included transferring theownership of the public sector to private businesses, granting private capitalcredit and tax facilities, liberalizing the exchange rate and devaluing theEgyptian pound (for a detailed account, see Firjanı, 1998, p. 51).

The pivotal question we present here, consistent with the objective of thisstudy, is: To what extent did this action, with the measures that accompanied itand resulted from it in the form of a particular type of development, exercise aneffective influence on expanding and multiplying the mechanisms which broughtabout the impoverishment and marginalization processes in Egyptian society inthe last quarter of the twentieth century?

The answer to this question has two parts. The first will review the mostimportant general characteristic of the total performance of the Egyptian econ-omy in the period 1975–2000. The second will review the most importantmechanisms that took shape in the context of this action, leading to theexpansion of the impoverishment and marginalization processes in the followingmanner.

Indicators of the Total Performance of the Egyptian Economy (1975–2000)

The most important indicators revealing the nature of the performance of theEgyptian economy in the 1990s are illustrated in Table 5.

Based on the indicators revealed in Table 5, the following may be deduced.(1) The GDP growth rate fluctuates and generally tends to fall. It fell from

about 6.2% during 1980–85 to 4.0% in 2001 and plummeted to its lowest level(1.9%) in 1992. However it rose again to 6% in early 1993, only to fall oncemore to 3.3% in 2000.

The growth rate achieved in the 1990s has two basic features. First, the growthoccurred under the influence of local demand for goods and services. Thus thecontribution of the foreign sector to this growth was very limited, measured attimes in the negative. For instance, foreign demand for goods and services in thefirst half of the 1990s was 49% of the total demand. This declined to 9% in thesecond half of the 1990s, which was reflected in the diminishing contribution ofexports to the growth of GDP. The export quota went down from 28% of GDPin 1991 to 16% in 2000 (World Bank, 2001, p. 7).

Second, economic growth in the 1990s was characterized by unevenness. Theservices sector witnessed the greatest changes, growing by 5–6% in the period1994–98, rising to 8.2% in 1999, while its contribution to GDP did not exceed1.7% in 2000—the lowest level since 1993. The building and construction sectorwas the fastest growing, doubling its growth rate since 1995. However, itexperienced a sharp decline in 2000, a year of real stagnation in this sector,recording negative growth rates. The agricultural sector had the most stable

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Tab

le5.

Bla

nkce

ll,da

taun

avai

labl

e;L

E,

Egy

ptia

npo

und.

1980

–85

1986

–90

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

(1)

6.2

(1)

4.4

(1)

1.9

(1)

3(1

)3.

8G

row

thof

GD

P(%

)(1

)4.

6(1

)4.

9(1

)5.

3(3

)6

(3)

5.1

(3)

3.3

(3)

4.0

(1)

9.7

(1)

15(1

)6.

4(1

)9.

9In

flatio

nra

te(1

)8.

3(1

)4.

8(3

)4.

1(3

)2.

6(3

)2.

5(3

)3.

0B

udge

tde

ficit/

surp

lus

toG

DP

(%)

(2)

�18

(2)

�5.

4(2

)�

3.5

(2)

�2.

1(2

)�

1.2

(2)

�3.

1(3

)�

4.2

(3)

�3.

7(3

)�

4.3

Inve

stm

ent

(2)

91/9

023

.3(2

)18

.2(2

)16

.2(2

)16

.6(2

)16

.3(2

)16

.7(2

)91

/90

13.4

(2)

8.5

(2)

7.0

(2)

6.1

(2)

5.5

Gov

ernm

ent

inve

stm

ent

(2)

5.5

Exp

orts

(mill

ions

ofU

S$)

(2)

91/9

03.

9(2

)4.

2(2

)3.

7(2

)3.

5(2

)4.

0(2

)4.

7Im

port

s(m

illio

nsof

US$

)(2

)10

.3(2

)9.

8(2

)8.

9(2

)9.

9(2

)10

.0(2

)12

.3(1

)3.

32(1

)3.

35(1

)3.

39(1

)3.

39(1

)3.

39R

ate

ofex

chan

geof

US$

agai

nst

LE

(1)

3.39

(4)

3.40

(4)

3.40

(4)

3.41

Sour

ce:

(1)

ESC

WA

(199

9,p.

50);

(2)

Inte

rnat

iona

lL

abou

rO

rgan

izat

ion

(199

8,p.

3);

(3)

ESC

WA

(200

1,pp

.3,

14,

16);

(4)

Wor

ldB

ank

(200

1,p.

1).

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growth rate in the 1990s, contributing around 0.5% of GDP. Finally, the mineralsector, depending basically on oil, was the most fluctuating, especially in theperiod 1999–2000 (World Bank, 2001, p. 11).

(2) The inflation rate declined to 2.5% in 2000 after the 9.7% rate of 1992.(It climbed to 15% in 1993.) Assessments put it at 3% in 2001. The governmentdevalued the Egyptian pound from 3.69 to 4.14 against the US dollar at the endof December 2000, which led to a rise in inflation despite the slow movementof the growth rate (ESCWA, 2001, p. 15). However, the financial policiesapplied by the government in 2000 failed to stop the sharp deterioration in thevalue of the national currency—the strength of the national currency is areflection of the strength of the economy and vice versa. The price of the dollarthen rose to over 5 Egyptian pounds at the beginning of 2002. The country alsosuffered a sharp liquidity crisis from 2000. The inter-bank rate rose remarkablyfrom 9% to 15% in January–February 2000. The liquidity crisis was furtheraggravated by delays in government payments, estimated officially at 16.8billion pounds, i.e. 5% of GDP (World Bank, 2001, p. 16; for a detailed account,see �Abd al-Fad� ıl, 2001, pp. 16–19).

(3) There was a general trend towards a decline in the budget deficit, whichfell from 18% in 1980–85 to 4.3% in 2001. However, assessments indicate a risestarting in 1999 when it rose from 3.1% (1996) to 4.2% in 1999. The two fiscalyears 1998/99 and 1999/2000 witnessed an unprecedented rise in the budgetdeficit. While the annual budget deficit in the 1990s never exceeded 3 billionEgyptian pounds, it climbed to 12.7 billion Egyptian pounds in the fiscal year1998/99 (after the low of 2.7 billion Egyptian pounds in the fiscal year 1997/98).It went down slightly in 1999/2000 to 12 billion Egyptian pounds (ESCWA,2001, p. 16).

These are the most important features of the Egyptian economic performancein the 1990s. In the view of this researcher, they are a consequence of the typeof politico-economic action undertaken by the state and the particular type ofdevelopment that ensued. Furthermore, this action and this type of developmentwent on to build a context that created the expanding mechanisms whichled—and still lead—to escalating processes of impoverishment and marginaliza-tion, as will be demonstrated in the following section.

Impoverishing and Marginalizing Mechanisms

We shall focus on the three most important of the mechanisms which played apivotal role in creating a structural context conducive to extending the impover-ishing and marginalizing processes in the last quarter of the twentieth century.These mechanisms are:

(1) increasing inequality in the distribution of income coupled with the risingcost of living;

(2) falling rates of public expenditure and of forming human capabilities;(3) increasing inability to employ human capabilities.

Increasing inequality in the distribution of income coupled with the rising costof living. Although assessments indicate a relative increase in GDP per capita in

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Table 6.

Rate of annual growth Rate of annual growth inof GDP (%) GDP per capita (%)

GDP GDP per(US$, billions) 1995–75 1990–751990–98 1998–90capita (in US$)

79.2 4.67.2 2.64.6 1290

Source: Extracted from Egypt Human Development Report (2000, Table 13, p. 204).

1998, when it reached US$1,290 (UNDP, 2000a, p. 204), rising from US$660 in1993 (UNDP, 1996, p. 170), the general trend during the 1990s was for theannual rate of growth in GDP per capita to decline; it fell to 2.6% in 1990–98from 4.6% in the period 1975–90, as illustrated in Table 6.

However, using GDP per capita as an indicator of standard of living does notadequately demonstrate the real variance between individuals’ living standards.Saying that the GDP per capita is US$1,290 does not mean that every individualin the society without exception receives this amount. This indicator does notreveal the manner of distribution—a more important factor in identifying thestandard of living of individuals and the extent to which they benefit from theeconomic productivity achieved. ‘Two societies may have equal values of GDPper capita output but one may have an income distribution close to equity, suchthat every individual gets nearly the per capita value, while in the other a tinyminority may have enormous incomes while the vast majority receive ridicu-lously low incomes’ (Firjanı, 1998, p. 5).

The indicators related to income distribution in the 1990s reveal that thepolitico-economic action of the state and its resultant economic and socialpolicies have widened the gap in income distribution, tilting the balance towardshigher income groups.

The Egypt Human Development Report (1995, p. 64) asserts that there isadequate reason to believe that the gap between the rich and the poor haswidened: the meagre growth rates, high unemployment rates and fall in govern-ment spending, while prices were left to the regulation of market forces withouteffective compensatory measures, have had negative effects on the poor andvulnerable sectors of the population. This is further illustrated by the data inTable 7. The poorest 10% of the population receive no more than one-seventhof the quota of the richest 10% and the poorest 20% of the population receiveabout one-fifth of the quota of the richest 20%.

Moreover, the economic and social policies of the state led to a lowering ofreal wages in addition to the diminishing quota of GDP as demonstrated by the

Table 7. Distribution of income and consumption in Egypt

Lowest 10% Highest 20% Highest 10%Lowest 20% Second 20% Third 20% Fourth 20%

21.4 41.1 26.78.73.9 12.5 16.3

Source: World Bank (1998/99, table 5, p. 198).

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Tab

le8.

Inde

xof

the

deve

lopm

ent

ofre

alw

ages

(198

5�

100)

1980

/81

Sect

or19

81/8

219

82/8

319

83/8

419

84/8

519

85/8

619

86/8

719

87/8

819

88/8

919

89/9

019

90/9

119

91/9

219

92/9

319

93/9

419

94/9

5

60.2

57.7

130.

811

9.3

107.

010

0.0

88.2

85.5

Agr

icul

ture

81.6

75.0

72.0

66.3

65.8

67.0

68.6

99.8

113.

313

1.4

118.

910

7.0

100.

085

.0In

dust

ry80

.576

.157

.152

.269

.865

.075

.068

.4O

il78

.880

.511

4.8

110.

510

4.8

100.

087

.082

.777

.870

.769

.163

.555

.779

.257

.869

.269

.397

.698

.910

0.1

100.

084

.279

.475

.9E

lect

rici

ty69

.868

.667

.966

.066

.267

.664

.462

.113

5.3

121.

410

7.9

100.

086

.5C

onst

ruct

ion

80.1

75.4

82.1

77.1

70.2

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Table 9. Percentages of government spending on education, health care and social security(1970–93 and 1996–99)

1970 19981975 19991980 1985 1990 1991 1992 1996 1997

Defence 3.2 3.611 14 19 11 11 8 4.0 3.6Education 9 9 3.211 3.114 13 10 2.6 2.7Health care 3 2 3 3 3 2 0.50.6 0.60.6Social security 8 12 12 13 11 9 5.5 4.5 5.6 5.6

Source: Data for 1970–93 are extracted from Van Dergag (1996, table 2.1, p. 233); data for1996–99 are extracted from World Bank (2001, table iv.2, p. 39).

data in Table 8. These data give evidence that real wages have tended todecrease in all sectors without exception. Some researchers put this decline at20% in rural areas (Firjanı, 1998, p. 8). A change in real wages is an indicatorof changes in income distribution for a wide sector of the population whose basicincome is in the form of wages. Those working for wages make up around63.2% of the total workforce over 15 years of age. Wage earners made up about71.1% of the urban workforce and 42% of the rural (Egypt Human DevelopmentReport, 1997/98, N. 14).

There is no doubt that unequal income distribution, sharp decline in realwages and price rises much faster than increases in wages create mechanismsthat not only lead to the increased impoverishment and marginalization of largesectors of society, but also create an inability for the poor to break out of thepoverty trap.

Falling rates of public expenditure and of forming human capabilities. There isa reciprocal relation between the forming of human capabilities and sustainablehuman development because this kind of development cannot be accomplishedin the absence of the necessary human capabilities. People are its means and itsend. Moreover, more development leads to a widening of the choices availableto individuals to build their own capabilities and put them to good use. Thereverse is also true, since poverty is the basic obstacle in the way of formingthese capabilities.

The politico-economic action of the state, with its consequent economic andsocial measures, has contributed to a reduction in public expenditure, which usedto be conducive to forming human capabilities through subsidies to health andeducational services for the poor and limited income groups who could notafford to pay. These groups are the most affected by the decline in real wagesand the rise in the cost of living as shown above.

Table 9 shows the changes in government spending on education, health careand social security. These data indicate a decline in social spending especiallyon education and health care—two of the most important factors in forminghuman capabilities (Firjanı, 1998, p. 97); spending as a percentage of GDPdeclined from 5.7% in 1980 to 4.8% in 1996 (World Bank, 1999, p. 74). Adeclining rate of expenditure on education basically impacts the poor groupswho cannot pay for these services, so they are the most likely to drop out. Using

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a compound measure of school enrolment rates (at primary, preparatory andsecondary levels), it transpires that 80% of the urban rich enrol as against 60%of the poor (Egypt Human Development Report, 2000, p. 12). Consequently,there is a rise in drop-out rates among the poor, leading to higher illiteracyrates—a context that deprives them of developing their knowledge-relatedcapabilities even minimally.

One ironical point in this respect is that the Egypt Human Development Report(2000) made education, seen from the perspective of human development, itsfocal point. It asserted that the present and future routes of human developmentin Egypt basically depend on successful application of educational reform in thefuture, a reform that is indispensable for optimizing benefits from the accelerat-ing globalization processes and avoiding or minimizing their negative effects onhuman development in Egypt (Egypt Human Development Report, 2000, p. 13).How can this be achieved in conditions of illiteracy afflicting 45% of thepopulation and 32% of the 15–24 age group (World Bank, 2001, p. 65),especially when globalization creates a need for education, or rather knowledge,on a higher level? Illiteracy in this age of globalization has even acquired widerimplications because it implies inability to deal with the tools of moderninformation technology—the computer and the Internet. In this respect, it maybe mentioned that 9 per thousand persons of the population in Egypt havecomputers (1996-1998) and 0.04 per thousand persons use the Internet (1998)(UNDP, 2000a, p. 200).

Increasing inability to employ human capabilities. The developments that takeplace in the labour market are indicators of the extent of the benefit toindividuals of the achieved economic growth and the manner in which theybenefit. An economy capable of creating high-return job opportunities leads toan improvement in the quality of life of individuals (World Bank, 2001, p. 58).

The developments that took place in the Egyptian labour market in the lastquarter of the twentieth century reveal indicators of the inability of the Egyptianeconomy to create high-return job opportunities or a context conducive toemploying human capabilities. Some of these indicators are as follows.

(1) Falling rate of achieved job opportunities. Preliminary estimates put thenumber of people looking for jobs for the first time at about 910,000 in early2001. Among these new jobseekers, 630,000 (69.2%) have secondary schoolqualifications, 160,000 (17.6%) have university qualifications and 120,000(13.2%) are school dropouts.

Studying the available data, we can identify the indicators of labour marketdevelopments as illustrated in Table 10. The data in the table reveal the greatvariance in job opportunities secured in the period 1980–97. In the agriculturalsector the number of workers represented 29% of the total males in theworkforce declining from 43% in 1983. In the industrial sector the rise inpercentage is small. This means that the major production sectors with thepotential to create productive and high-return job opportunities, i.e. agricultureand industry, did not achieve any sizable increase in job opportunities.

It is the service sector that makes a greater contribution to creating jobopportunities. Nevertheless its contribution has plummeted recently. After con-

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Table 10. The workforce by type of economic activity (1980–97)

Agriculture Industry Services

Males Females Males Females Males Females

Percentage of Percentage of Percentage of Percentage of Percentage of Percentage ofmale workforce male workforce male workforce male workforce male workforce male workforce

1980 1990–97 1980 1990–97 1980 1990–97 1990 1997 1980 1990–97 1980 1990–97

43 29 8 32 20 22 10 7 32 39 56 37


tributing 61% of total job opportunities in 1994–97, the contribution fell to 45%in 1998–99—a decline that is attributed to a reduction in the role played by thegovernment sector which used to provide one-third of new job opportunities inthe mid-1970s. In 1998–99, it provided a mere 14% (World Bank, 2001, p. 12).

(2) Rising unemployment, especially among the educated. The indicator ofunemployment does not only reveal the inability to employ human capabilities,but also uncovers the low level of social productivity and the failure of incometo meet basic needs, leading finally to a meagre welfare state or to impoverish-ment (Firjanı, 1999, p. 2).

The labour market indicators in Egypt expose the rising rates of flagrantunemployment among males and females alike as shown in Table 11. The tableshows the ascending rate of unemployment in the period 1980–97 from 5.2% to11.3%. It is notable too that the rate is on the rise among females.

Moreover, assessments indicate a rise in unemployment among the educated.Educated young men and women seeking jobs are among the sectors mostafflicted by unemployment; the rate ranges from 15% to as high as 25% forurban women aged 15–35. Table 12 shows rates of unemployment acrosseducational levels. These data, with the variance they show, are evidence of theobvious rise in the rates of unemployment among the educated in general.Unemployment of jobseekers with qualifications ranging from junior high schoolto university and postgraduate levels is represented by a whopping 98.1%;unemployed university graduates represent 18.3%.

How can education be put to good use according to the human developmentperspective? And who will lead the acceleration of the process of benefiting

Table 11. Unemployment in Egypt, 1980–97

Males unemployed Females unemployed Total unemployed(percentage of (percentage of (percentage ofthe workforce) the workforce) the workforce)

1990 19971980 1980 1990 19971990 1997 1980

11.38.65.224.117.93.9 19.27.65.2


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Table 12. Educational status and unemployment (%)

1996 census Sample case study, 1999

Illiterate 0.64.01.3Literate 2.5

2.6 1.6Less than secondary school level69.6Secondary school level 72.0

Higher than secondary school level 6.7 8.6University degree and higher 12.2 18.3

100Total 100

Source: Al-Ahram newspaper, Cairo, 27 July 2001.

from globalization or limit its negative effects on human development in Egyptas set out in the Egypt Human Development Report (2000, p. 13)?

These indicators as a whole disclose the nature of the structural mechanismswhich have contributed to the expansion of impoverishing and marginalizingprocesses and how these mechanisms are manifested in the context of theeconomic and social policies consequent on the politico-economic action of thestate and the accompanying particular type of development.

There is no doubt that the continuing existence of these mechanisms leads toan increase in the number of social groups which fail to form the humancapabilities necessary not only to break away from the poverty trap andmarginalization but also to build the new society of the twenty-first centurywhich depends on a knowledge-based economy and where human capabilitiesare the key determining the form societies will take.

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Documents

The political economy of poverty in Egypt (1975-2000): A sociological perspective