Exporting labour to earn foreign currency: Egypt’s new economic strategy

Exporting labour to earn foreign currency: Egypt's new economic strategy

“The Egyptian government has been unsuccessful in exporting competitive products to the world market, which is why it has started exporting people who can transfer foreign currency back to the government.” EgyptAir planes on the tarmac at Cairo International Airport, 6 May 2022.

(Amir Makar/AFP)

On 6 September 2023, Egypt’s ambassador in Athens met with the Greek Minister of Immigration to discuss the implementation of an agreement between the two countries to send 5,000 Egyptian farm workers to work on Greek farms. The two parties emphasised the importance of the agreement, particularly in the wake of the boat disaster last June, in which a ship carrying more than 600 migrants, most of whom were Egyptian nationals, sank off the coast of Greece.

In recent years, the Egyptian government has taken on the new role of an ‘agent’ that specialises in marketing its citizens abroad. Its objective: finding new sources of dollars to save the country from the bankruptcy into which it has been sinking since early 2022.

At a ministerial meeting on 9 January, Egypt’s Prime Minister confirmed that the plan to “export” Egyptians abroad was a priority for his government. To this end, he ordered the ministries to form a committee responsible for training Egyptians for foreign markets and identifying the needs of other countries in terms of manpower and qualified professionals. Two days later, Egypt’s Ministry of Manpower announced the launch of the Mehani (‘Professional’) project to train one million citizens for local and foreign markets.

Dependence on Egyptians abroad

Since early 2022, Egypt has been plunged into a crushing and unprecedented economic crisis. As the world’s second most indebted country to the IMF after only Argentina, Egypt faces a dangerous shortage of foreign currency, which is vital for importing essential products such as wheat.

With Egypt’s currency in free fall, businesses and the private sector are scrambling to secure dollars on the black market, where the dollar sells at around twice the official price. The collapse of the Egyptian pound has exacerbated annual inflation, which reached more than 34 per cent last December. As a result, the prices of essential consumer goods have almost tripled in just two years. This is a nightmare for Egyptians, 29.7 per cent of whom were already living below the poverty line before the crisis, according to the latest World Bank figures for 2019.

The Egyptian government’s solution to this crisis is to put Egyptian expatriates and their dollars to work. Since 2016, these expats have become the leading suppliers of foreign currency to the country.

According to recent data, remittances from the estimated 14 million Egyptians working abroad totalled US$32 billion during the 2021-2022 fiscal year, four times the revenue generated by Suez Canal tolls and three times the revenue from the tourism sector.

Remittances have been essential to financing the megaprojects of Abdel Fattah al-Sisi’s regime in its frantic race for development, as well as to buying the country’s essential commodities, such as wheat, animal fodder and oil.

However, the economic crisis has taken a toll on remittances from Egyptian expats. During the fiscal year of 2022-2023, transfers to the Egyptian banking system from abroad fell by 30 per cent to US$22 billion, following the fluctuation in the price of the Egyptian pound.

While the government’s plan to increase the number of Egyptians abroad is new, this is not the first time it has invested in this area. In March 2021, the Ministry of Manpower launched the Jobs Abroad platform, aimed at citizens looking for work outside the country. At the end of last December, the Ministry boasted that it had successfully sent a record 426,000 Egyptians abroad for work, up from 321,000 in 2022.

“Egypt has become heavily dependent on remittances from Egyptians abroad and is seeking to increase their numbers in order to increase remittances,” Malek Adly, head of the Egyptian Centre for Economic and Social Rights (ECESR), tells Equal Times.

In response to the crisis, the government has stepped up its initiatives to encourage Egyptians to move abroad in order to replenish its dollar reserves. In October 2022, it launched an initiative allowing expats to bring their cars back to the country, on condition that they deposit a sum equivalent to the price of the car in an Egyptian bank for five years. Initially intended to last only three months, the government extended the initiative through the end of January 2024.

In addition, the government is urging Egyptian expatriates to invest in a company and a two-billion-dollar fund specifically for them. In January 2024, the Egyptian government also launched an application that expats can use to access all the services available to them, which charges a fee in foreign currency.

But as the Egyptian government is stepping up its efforts to “export” it citizens abroad, it has failed to take seriously the disastrous, even inhumane, conditions under which most of its expats live, as Adly explains.

For example, the Egyptian government failed to consult any articles, or trade union or NGO reports on the inhuman conditions on Greek farms as it reached its agreement to send Egyptian farmers to Greece. Researchers have already revealed that workers – most of them Bangladeshi – on Greek farms are living in makeshift camps where they lack the basic comforts needed to live in dignity. These migrant workers sleep on the ground and report having no access to toilets, drinking water or electricity. Some claim that they are treated worse than animals.

Sending Egyptians to unstable or hostile countries

Conditions for Egyptian workers in certain countries are far worse than they are in Greece. In some cases, Egypt is pushing for its citizens to move to countries classified as dangerous or hostile to Egyptians.

In January 2022, the Ministry of Manpower released an employment advertisement: “Good news, jobs in Libya for a salary of 20,000 Egyptian pounds” (more than €800 at this date). The assignment concerned the dispatch of 37 doctors and nurses to a clinic in the Tajoura region, near Tripoli. With doctors in Egypt earning an average of US$150, the advertised salary of US$800 offered would be difficult for many to refuse.

This advertisement came almost ten days after the Ministry launched an electronic platform to organise the return of Egyptian workers from neighbouring Libya, a popular destination for Egyptian expatriates before the revolution.

But what the government failed to mention were the risks that Egyptians applying to work in Libya face, such as the regular instances of kidnapping for ransom money. A month after the job advertisement was released, the families of six Egyptians reported that their sons had been kidnapped while working in Benghazi.

In December 2022, the Libyan army announced the release of five Egyptians kidnapped by traffickers, noting that the victims had been tortured to force them to pay for their freedom. Another 38 Egyptians were kidnapped for ransom money last November in Tripoli. In October 2022, the Libyan authorities dismantled a gang that specialises in kidnapping Egyptian workers in Benghazi.

State-organised legal migration also comes at a cost to the citizens who remain behind. The highly sensitive medical sector in particular is impacted, as doctors and medical staff are highly sought after, particularly in the Gulf States. The miserable salaries that the Egyptian government pays have driven many in the medical profession to seek work abroad.

As a result, Egypt’s ratio of doctors to population has plummeted, currently standing at 8.6 per 10,000 citizens, well below the world average of 23 doctors per 10,000 citizens. Despite this shortage, the government prefers to encourage migration in order to generate foreign currency. At the end of 2022, the Ministry of Manpower published an advertisement to recruit 50 doctors and 200 nurses to work in Kuwait for a salary of 200,000 Egyptian pounds (around US$8,000) per month, as well as accommodation and transport.

“The government has been unsuccessful in exporting competitive products to the world market, which is why it has started exporting people who can transfer foreign currency back to the government,” Elhamy el Merghani, economist and secretary of opposition party Hizb Al-Tahalof Al-Shaeby Al-Ishtiraky (Socialist People’s Alliance Party), tells Equal Times.

“Unfortunately, it’s a short-term vision that exports problems abroad. The government believes that exporting Egyptians will also solve the problems of unemployment at home. The reality is that it will only create other problems for the economy, such as the lack of skilled workers needed for local development,” explains el Merghani.

“Leave, or there will be no development”

According to Adly, Egypt’s push to export workers abroad sends a very clear signal to its citizens: the solution lies in migration. “The message being sent to Egyptians is clear: leave, or there will be no local development,” he says.

The government’s plan comes at a time when the number of Egyptians risking their lives on boats crossing the Mediterranean to escape the economic crisis is rising sharply. For the last two years, every boat that has crossed the central Mediterranean has had Egyptians on board. Last September, the European Border and Coast Guard Agency (FRONTEX) confirmed that Egyptians made up a large proportion of the 232,350 irregular migrants who arrived in Europe during the first eight months of 2023. Egyptians made up the largest group of undocumented migrants in Italy the previous year at more than 20,000.

“Egyptians see migration as a means of survival in the face of a bankrupt economy and deteriorating living conditions,” says el Merghani.

This article has been translated from French by Brandon Johnson