COVID-19 strikes Egypt as 1mn lose their jobs

The National Planning Institute affiliated with the Egyptian Ministry of Planning revealed that 824,000 citizens have already lost their jobs since the start of the coronavirus crisis which began in February. The governmental institute expected that “the number of the unemployed due to the epidemic in Egypt will increase to 1.2 million people by the end of this year.” The institute emphasised that this is associated with high unemployment rates in the private sector, high inflation rates in the country, and lower levels of income in general.

Observers say that the new wave of unemployment came at a difficult time for Egyptians, which means that their suffering will worsen. The government institute mentioned in a research study on Wednesday, three scenarios regarding the impact of the coronavirus crisis on poverty rates. The first of these scenarios is that it would increase from 32.5 per cent to 38 per cent, an increase of between 5.5 and 5.6 million people in the fiscal year 2020-2021. The second is a jump in poverty rates to 40.2 per cent, an increase of 7.8 million people, and the third is an increase of more than 44 per cent, an increase of 12.5 million people.

The institute said that there are about 32.5 million citizens living below the poverty line in the country, and their number is expected to rise to 45 million in the most pessimistic scenarios, due to the steady increase in the numbers of the unemployed due to the crisis. It explained that it aims to analyse the different dimensions of this global pandemic, to discuss and estimate the possible repercussions for it on Egypt, and to present alternatives to different policies, based on possible scenarios in specific time frames, in order to support policymakers and decision-makers.

Egyptian observers have questioned the official announced percentage of the number of poor people, especially after the World Bank issued updated data indicating that the poverty rate will rise to about 60 per cent in Egypt. Observers confirmed that this is an indication of the deteriorating living conditions in the country, amid escalating waves of high prices, erosion in the value of wages, and a lack of public services. Critics say the sharp rise in poverty is the result of General Abdel Fattah al-Sisi’s economic policies. Observers say that the Egyptian regime was forced to bow to the International Monetary Fund’s instructions to cut subsidies, liberalise the price of fuel and energy, and reduce the number of government employees, according to IMF conditions.

All of these measures have added to the suffering of Egyptian families due to an unprecedented surge in costs. But along with the conditions of the International Monetary Fund, the al-Sisi regime spent billions of dollars on giant projects without studying their economic feasibility, which in turn led to making more people poor. The spread of coronavirus has caused great damage to the country’s economic resources, chiefly tourism, and remittances from Egyptians working abroad.

Al-Sisi’s regime had to turn to the IMF again to obtain a new loan, which added to the Egyptians’ fears that this loan will be accompanied by new conditions. According to government studies, if the coronavirus crisis persists until the end of this year, this would mean practically a complete destruction of the country’s tourism resources this year. The Egyptian authorities have imposed fees on salaries to raise funds to tackle the coronavirus. However, those decisions were met with anger from many who considered that the Egyptian regime cut into their salaries rather than supporting them. Observers warn that the increasing waves of high prices and unemployment in Egypt may cause a new wave of crime. Suicide has increased significantly over the past few years, and psychological researchers have estimated that 28 per cent of Egyptians have psychological problems, some of which lead to severe depression.