It is easy for economists and policy makers to get side tracked discussing subsidiary issues while neglecting the essentials. Although relevant, inflation, budget deficits and stock market volatility fall into the category of ancillary issues. In contrast, growth, unemployment and income distribution affect the population at large and thus require greater consideration. This publication attempts to redirect attention and dialogue to these important matters by examining unemployment.
The paper characterizes the evolution of unemployment in Egypt over the past three and a half decades, outlines the economic trends in three sub-periods and offers a recipe for fuller employment as the "high road to growth." Although the prescription is applied to Egypt, it is relevant to all developing countries suffering from the unsustainable policy of government-led employment in the public sector. Two findings stand out. First, growth is a necessary condition for job creation and a labor-creating growth strategy is needed to solve unemployment. Second, there is a strong link between growth, unemployment and equitable income distribution through educational reform.
Implementing these solutions is the greatest challenge. This was addressed in the discussion that followed Dr. Radwan's lecture at ECES. The range of questions covered the impact of liberalization on employment, the accuracy of unemployment figures, the effect of unemployment insurance on the labor market, the challenge of reforming the civil service, and the alternative of microenterprises. These challenging questions were met with insightful answers that I hope will enrich the dialogue on unemployment in Egypt.
Author(s): Samir Radwan