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News Analysis: Egypt's soaring unemployment rate stirs fears

English.news.cn   2013-05-16 05:33:12            

by Mahmoud Fouly

CAIRO, May 15 (Xinhua) -- Egypt's unemployment rate in the first quarter of 2013 rose to 13.2 percent, according to an official report released Wednesday, raising fears that the ongoing political chaos would lead to further economic and social troubles.

According to the latest report of Central Agency for Public Mobilization and Statistics (CAPMAS), 3.6 million Egyptians are unemployed, representing 13.2 percent of the country's workforce of 27.2 million, while the country's total population is 84.4 million excluding expatriates.

"The increase of the unemployment rate is attributed to January 2011 uprising that led to a series of events and general slow economic activities in this period," the CAPMAS report said.

From 1999 to 2009, the unemployment rate in Egypt varied between 8.1 percent and 9.4 percent. In the fourth quarter of 2012, the unemployment rate rose to 13 percent, an all time high as of then, according to CAPMAS statistics.

The issue warns of serious social problems, such as poverty, disappointment, late marriages and growing crime rates, said Saeed Sadeq, political sociology professor at the American University in Cairo.

Sadeq told Xinhua that the Egyptian government fails to create job opportunities, due to the lack of foreign investments over the past two years which saw prolonged turmoil following the ouster of former President Hosni Mubarak.

Tourism has been greatly affected by the turmoil, as many breadwinners have lost jobs and couldn't afford such "luxury" for the whole family any more, the professor noted.

"The economic, social and political situations are interrelated. If this chaos continues, it will lead to instability in all fields, " Sadeq said, calling for "urgent projects" to create job opportunities.

Rashad Abdo, head of the Egyptian Forum for Economic and Strategic Studies, said the increasing unemployment rate is linked to deteriorating security situation, recession of tourism and investment, as well as factory closures.

"About 14 billion U.S. dollars in investments departed Egypt; at least 5,000 factories have been shut down; and occupancy rate at hotels went down to 7 percent, all leading to laying off workers," Abdo said.

Abdo told Xinhua that foreign investors have been scared off to pump their funds in a chaos-stricken market, adding that the return of Egyptian expatriates from other unrest-torn Arab countries added up to the unemployment rate.

"In addition, (university) graduates over the past two years faced a rejecting market with no job opportunities," Abdo said.

Abdo said that the solution lies in restoring security and stability, drafting additional legislation to encourage foreign investors, and hiring experienced officials, not merely Islamist- oriented ones.

"These elements could improve the investment environment in Egypt and raise its credit rating that has declined several times over the past two years," Abdo said.

Nader Fergani, sociologist professor, told Xinhua that Egypt's current economic situation is "increasingly critical." If the unemployment rate remains high and the people's needs are not met, "the social situation may not be under control."

Fergani urged the government to keep clear visions and adopt effective plans for economic and social renaissance, rather than borrowing from other states.

Editor: yan
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