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Weary workers in Egypt pose economic, political threats

Weary workers in Egypt pose economic, political threats

Companies in Egypt feel the squeeze amid demands for higher pay. Meanwhile the government has hiked minimum wage 67 percent but unions say it’s still low as staff strikes continue.

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October 9, 2011 1:00 by



Like many Egyptians, textile factory worker Magdi el-Aleemy expected the uprising that toppled Hosni Mubarak to change his life. It did, but not for the better.

The firm where he worked for 10 years, like so many other businesses in Egypt, was pummelled when the economy nosedived as investors fled and orders dried up. Aleemy lost his job.

“The revolution did nothing for us,” said Aleemy, standing with dozens of others protesting outside his old factory gates in Mahalla el-Kubra, north of Cairo. “We will stay here until or demands are met,” he said, drawing a roar of support from others.

Expectations were sky-high when Mubarak was driven out in February. For many, it signalled an end to policies they said lined the pockets of a rich elite at the expense of ordinary Egyptians. Workers expected a swift economic dividend.

Eight months later, disappointment that the dividend has not materialised is fuelling a wave of worker unrest that the military-backed government, wary of provoking fresh political turmoil, is not attempting to suppress forcibly.

Strikes are disrupting production and investment, reducing the resources available to satisfy workers. Comprehensive data for the frequency of strikes could not be obtained, but Nabil Abdel Fattah, analyst at the Al-Ahram Centre for Political and Strategic Studies in Cairo, estimated it had almost doubled since Mubarak’s ouster.

And if the anger in industrial cities such as Mahalla el-Kubra does not subside, the frustrated aspirations of workers may eventually boil over into a fresh wave of political unrest, say analysts.

“Given the deteriorating economic conditions, and if the government administration remains paralysed and unable to solve the workers’ problems, protests will most likely grow bigger and could lead to another big uprising,” said Abdel Fattah.

There are no easy solutions. Many of those on strike work in state-owned factories, but the government has limited means to hike salaries when it forecasts a budget deficit of 8.6 percent of gross domestic product in the financial year to June 2012. Economists say the actual deficit is likely to be bigger.

HALTING PRODUCTION
“The protestors have legitimate demands, their salaries can’t meet their needs, but we don’t have resources to pay them,” Finance Minister Hazem el-Beblawi told reporters after opening a session of Egypt’s battered stock market.

Private firms are also feeling the squeeze. Gamal el-Deeb, owner of plant that produces stone for use in construction in the Nile Delta town of Manoufiya, said the economic downturn had slashed the market for his product, forcing him to halt output.

“We have no work. We don’t get money and the situation has been miserable for the past six months. I don’t get any income yet I am required to pay the salaries of my workers and keep the factory open,” Deeb told Reuters.

His 35 workers earn about 30 to 40 pounds ($5-7) daily for six-hour shifts. “The workers need money and get angry with us if we don’t pay them regardless of the situation,” he said.

Nationwide, experiences like Deeb’s are weighing heavily on economic growth; a Reuters poll of analysts published last week predicted gross domestic product would…

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