Return of overseas workers compounds Egypt's problems

Return of workers from abroad likely to exacerbate unemployment and cutting remittances.

CAIRO - Egypt expects thousands of its nationals to lose their jobs and return from Qatar, with the tiny Arab country banning the entry of nationals from several countries, including Egypt, as part of its efforts to contain the spread of the coronavirus.

In early March, Qatar said that it would ban the entry of citizens from several countries, including Egypt, to prevent the spread of the coronavirus. This deprived thousands of Egyptians who had work and residence permits in Qatar but were on holiday in Egypt at the time of the chance to return to work.

Qatari authorities are also terminating the contracts of hundreds of Egyptian workers and refusing to renew the contracts of others.

"We are following the conditions of Egyptian workers in Qatar very closely, but we do not really know why the contracts of some of the workers were terminated," said Hamdi Emam, the head of the Labour Section at the Cairo Chamber of Commerce.

Dozens of Egyptians working in Qatar posted a video in late March to appeal to Egyptian authorities to help them return home after their contracts were terminated by Qatari companies.

Some of the workers said they are both unable to remain in Qatar or return to Egypt.

Egypt cut off trade and diplomatic ties with Qatar in June 2017, together with the United Arab Emirates, Saudi Arabia and Bahrain, in protest against Doha's alleged interference in their affairs and sponsorship of declared terrorist organisations, including the Muslim Brotherhood.

Since then, Egypt has not operated direct flights to Doha. Those travelling to Doha from Cairo have to arrive in either Kuwait or Muscat before taking another flight to the Qatari capital.

On March 6, Egypt banned the entry of Qataris in response to Qatar's decision to ban the entry of Egyptians.

Around 300,000 - 350,000 Egyptians work in Qatar, according to the Labour Section at the Cairo Chamber of Commerce.

Along with millions of other Egyptians in other countries, these workers send billions of dollars in remittances back to Egypt every year.

In 2019, Egypt received $26 billion in remittances from its workers in other countries. Around 10 million Egyptians work in other countries, especially the Arab Gulf.

However, Egypt is bracing for those workers to return home as the Qatari economy takes the hit from the coronavirus and the resultant international economic slowdown, and as Qatar tries to contain the disease.

This will aggravate the economic situation in Egypt as the populous Arab country prepares for the return of workers from other countries.

The development comes at a time when key markets in the Arab Gulf region have stopped the flow of foreign workers to localise jobs and stabilise the economy following a drop in oil prices and the economic impact of the coronavirus crisis. 

Some companies in Saudi Arabia are asking foreign workers to voluntarily submit their resignations as they try to reduce spending.

Thousands of Egyptian workers are also preparing to return from Kuwait, where anti-expatriate sentiment is rising. 

"Apart from depriving Egypt of the remittances they used to send, the return of these workers will swell the ranks of the unemployed in our country," said Bassant Fahmi, a member of the Committee on Economic Affairs in the Egyptian parliament.

About 8% of Egypt's workforce of 29 million was unemployed in the fourth quarter of 2019.

In late March, Egypt's planning minister, Hala al-Saeed, said she expected the coronavirus outbreak to hurt job growth. 

She said the unemployment rate could rise to 8.5% by the end of the 2020/2021 fiscal year in July.

The return of workers from other countries will make things worse, economists said.

On April 7, Egyptian President Abdel Fattah al-Sisi appealed to private employers to not lay off their workers as the crisis affects businesses and sparks a recession. 

"I only ask the private sector to preserve its labour," Sisi said.

Sisi's government offered tens of billions of Egyptian pounds to support the tourism industry and help the sector conduct needed upgrades and help investors preserve their labour.

Sisi also launched an economic stimulus plan on April 7 that includes tax exemptions for the private sector, a delay of the real estate tax and financial support to exporters.

There are fears, however, that an increase in the number of the unemployed and a deterioration of economic and living conditions would have a political backlash.

"The authorities need to work hard to provide local workers returning from other countries with jobs," said Farag Abdel Fattah, an economics professor at Cairo University. "An increase in the unemployment rate will increase pressures on the economy."

Hassan Abdel Zaher is a Cairo-based contributor to The Arab Weekly, where this article was originally published.