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Daily News Egypt: Egypt unemployment rate reaches 11.8 pct

Egypt’s unemployment rate went down from 11.9 percent in the first quarter, but higher than last year’s 8.96 percent.
30.08.11 | Interesting article at Daily News Egypt

Egypt’s unemployment rate reached 11.8 percent in the second quarter of 2011, down from 11.9 percent in the first quarter, but higher than last year’s 8.96 percent.

Despite the slight decrease in the actual statistic, Alaa Ezz, secretary general of the Federation of Egyptian Chambers, pointed out that the country will continue to see high unemployment figures.

“Since the open door policy, where the government starts to be regulator instead of operator, private sector has taken over the majority of investment; today, almost 95 percent of new employment is by private sector,” he noted.

“The problem is that due to the repercussion of the revolution where foreign direct investment and local investment have gone down tremendously and tourism has gone down drastically, there are no new investments to take this 95 percent up.”

Ezz attributed the decrease in some job opportunities to what he labels as the “yo-yo system,” where tourism entities have an understanding with workers who know they may easily be laid off during tourism disasters.

According to Ezz, this happened as a result of the January 25Rrevolution, incapacitating growth rate.

Ezz also noted that as the country’s population increases, productivity and GDP remain negative.

“Our population growth is about 2.4 percent annually, and the growth of GDP has been around 6 percent in 2010, which means it helps year by year to reduce unemployment, this year however, there is no growth in GDP, while our population continues to increase.”

Ezz also emphasized that the country will continue to see a negative growth rate until clear economic policies are put in place after the elections.

Despite the forecast after elections, Ezz pointed out that most of the political parties running in the upcoming elections have high hopes and promises, but no concrete plans.

Taking current circumstances of the economy into consideration, this is seen as very problematic and disturbing as the country now is in dire need of rigorous economic reforms even more so than before.