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Globalization and Human Capitalwas more severe in the private sector, whereit declined by almost 38 per cent, comparedto the 20 per cent decline in the publicsector. Nonetheless, nominal wages tended,in general, to increase by about 160 per centduring the period in question.Moreover, data in Table (6.4) points tosome discrimination against women in thewage level. A female worker obtains nomore than 83 per cent of the wage level of amale doing the same job. However, thisdiscrimination is relatively less in the publicsector compared to the private sector.Market SegmentationThe Egyptian labor market suffers fromseveral types of segmentation, namelypublic/private, male/female, andformal/informal. The latter is considered themajor characteristic of this market. Theinformal labor market appears to be the lastresort for all those not absorbed by theformal market. This is because the majorityof the unemployed in Egypt, especially inthe absence of a comprehensive system ofunemployment insurance, cannot afford tostay without work and a source of income.There are many difficulties, statistical andotherwise, concerning the collection of dataon the activities within this sector or thenumber of those employed in it. However,estimates provided by the most recent studyof the degree of elasticity andcompetitiveness in the Egyptian laborThe informal labormarket appears to bethe last resort for allthose not absorbed bythe formal market.Table (6-4)Trends in Average Nominal and Real Wages by Economic Activity, 1990-1996Agriculture andFisheriesMining andQuarryingManufacturingElectricity, Gasand WaterConstructioTrade andHotelsTransportand StorageFinance,Insurance andBus. Serv.Soc. and Pers.Serv.AllActivitiesEconomicActivitiesAll ActivitiesPublicPrivateGenderMFF/MMFF/MMFF/MMFF/MMFF/MMFF/MMFF/MMFF/MMFF/MMFF/MF/MF/MN34320.941141050.9256380.68394611855500.9151420.8253551.0475851.1355340.6257460.810.890.6919961996N65540.831821690.9397670.6988901.02991081.0984760.901111171.051741490.86991001.01103830.810.920.68Notes: (1) M= Male, F=Female, N=Nominal, R=Real.(2) Real wages are calculated using urban CPI for year 1986 = 100 ; National Bank, Economic Bulletin,volume 51, No. 3, 1998.(3) For Classification of Economic activities see note (5) Table 6.3.R19.017.963.758.761.321.221.825.730.727.928.523.529.630.741.947.530.719.031.825.7R17.414.448.645.225.917.923.524.126.528.922.520.329.731.346.539.826.526.727.522.2% of change 1987-1996N91.268.8—59.661.0—73.276.3—125.695.7—80.0116.0—64.781.0—109.4112.7—132.075.3—80.0194.1—80.780.4———R-8.4-19.6-23.7-23.0-17.3-15.67.8-6.2-13.73.6-21.1-13.60.32.011.0-16.2-13.740.5-13.5-13.6Egypt Human Development Report 2000/2001 - 99
Globalization and Human CapitalThe Egyptianinformal sector hasplayed a pivotal roleas an absorber of theshocks that hit theformal labor marketduring the 1990s.The most importantglobalizationmechanism, namelythe GeneralAgreement on Tradein Services (GATS),is likely to fosterinequality in labormobility acrosscountries.market show that there has been a greatincrease in the number of those joining theinformal labor market, especially during the1990s, when it ranged between 4.8 and 5.2million individuals. This suggests that theemployment level in the informal labormarket had almost doubled since 1986.The Egyptian informal sector has played apivotal role as an absorber of the shocks thathit the formal labor market during the1990s. But it should be remembered thatthose employed in the informal labor marketdo not enjoy the benefit of legal protectionon working hours or minimum wage levels.They also lack all forms of insurance orsocial security, and have to contend with theinstability that characterizes this sector.Wage levels tend to fall as the number ofthose joining the sector increase, with fiercecompetition among them. The sector isincreasingly becoming a reservoir ofunskilled and low-wage labor, increasingthe severity of poverty and socialmarginalization, especially in urban areas,with dangerous economic and socialimplications.Labor Force MobilityThe phenomenon of globalization issynonymous with a higher degree ofliberalization and the abolition of all barriersdeterring the flow of commodities or factorsof production across national borders. Thiscan suggest a higher degree of mobility forindividuals, parallel to the liberalization ofgoods, services, and capital flows. However,for at least two reasons, this, in fact, is notsupported by empirical evidence:(1) Some analysts have noted thatglobalization will result in a distinctionbetween three different categories of thelabor force, regardless of nationality:● A limited category, not exceeding 10per cent of the total labor force of theworld, qualified to fill any jobopportunity at the international levelbecause of high caliber and skills, andthe ability to innovate. Sincemultinational companies will competeto attract this category, the wagesoffered and promotion opportunitieswill be very high.● A category of between 30 to 40 percent of the total labor force of theworld, characterized by a lower levelof skills compared to the firstcategory. This category will have jobopportunities within the borders oftheir country, but under the ‘hire andfire’ principle will lack any guaranteeof job stability. There will also befewer chances for promotion to higherwage levels.● The last category, involving allunskilled labor, will only be able tofind temporary and unstableemployment, with extremely lowwage levels due to severe competitionwhether within their country or fromoutside.(2) The most important globalizationmechanism, namely the GeneralAgreement on Trade in Services(GATS), is likely to foster inequality inlabor mobility across countries. Theliberalization of services includes,among other things, labor mobility fromone country to another in order toprovide certain services. This might leadto the movement of labor fromdeveloped industrial countries todeveloping countries because of therelative and competitive advantage oftheir highly sophisticated skills. Thiswould increase the pressures imposed byglobalization on developing countries,including Egypt. However, it should benoted that the agreement allows eachcountry to choose certain service sectorsin which it commits itself toliberalization in a way that seeks tomitigate negative impact. Egypt, forexample, promised to fulfill certaincommitments in specific sectors, namelyconstruction, financial and bankingservices, tourism, and transportation.The same result could also apply in the caseof the EU Partnership Agreements, wherethe European side aims to limit themovement of labor from southern to northernMediterranean countries, by improving joband wage opportunities, especially for laborwith limited-skills, in Europe proper.Further, the opportunities for Egyptianworkers to move within the borders of theArab world have decreased and are not100 -Egypt Human Development Report 2000/2001
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The Digital Divide is a problem tha
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This report is the major output of
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AcknowledgementsThe Team of the Rep
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Table of ContentsExecutive Summary
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Energy Consumption 68Agriculture 69
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2.4 Health and Education 332.5 Poli
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AbbreviationsADNAADPAIAPRARCB2CBABC
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Executive SummaryI - Globalization
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Executive Summarythe main source of
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Executive Summaryfertilizers, pesti
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Executive Summarythe Egyptian labor
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Chapter OneGlobalization and Human
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Globalization and Human Development
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Chapter TwoThe Economic Well Being
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The Economic Well Being of Egyptian
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Globalization Challenges to Egypt
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Page 64 and 65: Globalization Challenges to Egypt
Page 80 and 81: The Environment and Sustainable Dev
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Page 93 and 94: Chapter FiveEgypt’s Position inTe
Page 95 and 96: Egypt’s Position in Technology an
Page 109 and 110: Chapter SixGlobalization and Human
Page 111 and 112: Globalization and Human CapitalOf t
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Page 119 and 120: Chapter SevenEgypt’s Social Capit
Page 121 and 122: Egypt’s Social Capital and Arab E
Page 131 and 132: Technical Notesand Sources of DataH
Page 133 and 134: Technical Notes and Sources of Data
Page 139 and 140: Bibliography◆ Abdallah, H. (1996)
Page 141 and 142: BibliographyOECD Development Centre
Page 143 and 144: BibliographyNational policies in a
Page 145 and 146: Bibliography◆ Springborg,Robert (
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Governorate IndicatorsG.2 Profile o
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Governorate IndicatorsG.4 Trends in
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Governorate IndicatorsG.6 Status of
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Governorate IndicatorsG.8 Rural-urb
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Governorate IndicatorsG.10 Health p
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Governorate IndicatorsG.12 Educatio
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Governorate IndicatorsG.14 Labor fo
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Governorate IndicatorsG.16 Income d
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Governorate IndicatorsG.18 Demograp
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