Egypt - Strategy for Danish Regional Assistance

Egypt is not among the poorest countries in the world. The UNDP Human Development Report lists Egypt as number 107 of 174 countries in the group of "medium human development" countries. Relevant indicators in this respect are: life expectancy (63.6 years), adult literacy (49.1 per cent) and access to clean water (90 per cent) and sanitation (50 per cent). The number of people living in absolute poverty is around 23 per cent (1977-89) with 21 per cent in urban areas and 25 per cent in rural areas. Social security benefits expenditure is around 1.1 per cent of GDP (1980-89).

Poverty has increased because of an increase in population and poor economic growth. The market economy and other economic measures implemented in accordance with the structural adjustment programme have polarised the increasing number of poor and the powerful small group of urban rich.

The increasing number of unemployed is a matter of great concern. Unemployment has increased from 10.7 per cent in 1986 to 14.1 per cent in 1992 and is now estimated to be 17 per cent. 75 per cent of the unemployed are new entrants to the labour force of whom about 90 per cent are university or secondary school graduates. The real figure is higher because many in employment are underemployed and because only a small proportion of Egyptian women are regarded as belonging to the labour force.

The Government does not have any formulated policy focusing on poverty. Poverty is considered part of everyday life where the social safety net is based on the family network. Some assistance to the poor has been provided through the extensive system of untargeted subsidies, for instance food and energy. However, the increase provided in the 1994/95 budget for social spending proves the Government's understanding of the need for a more socially just society to cope with political tension.

The political situation in Egypt without poverty-oriented policy programmes makes it difficult to create awareness of and active participation in poverty issues. The various Islamic organisations benefit from this situation.

Poverty is more widespread in rural than in urban areas. In rural areas the poor are small-holders or farm workers. Urban poverty arises when people migrate to cities in the hope of getting a job as an unskilled industrial worker or in the service sector. Poverty is particularly prevalent in Upper Egypt but some governorates in the Delta have severe poverty pockets too. Women and children are most exposed to poverty particularly in relation to malnutrition, illness and lack of schooling. A specific population group, about 10 per cent, can be considered extremely poor and embraces widows, the chronically sick and the disabled, who are totally dependent on transfer incomes.

In 1990 the World Bank prepared a report on poverty problems and donors agreed on the necessity of safeguarding against negative short-term impacts in connection with the structural adjustment programme and to improve the situation in the long term in order to generate development and stability. Hence the Social Fund for Development was established in 1991 with considerable donor support, including Denmark. The Fund seems to have had rather positive results especially in the implementation of various job-generating activities.