Employment, Budget Priorities and Microenterprises

This paper discusses the current conditions in Egypt's labor market and examines a number of existing opportunities to exploit in favor of a new and innovative path for growth and development.

The paper proposes a frame work that adopts a cost-benefit approach which uses:

• Budget data to measure alternative cost scenarios;
• Labor force statistics to compare and contrast the contribution of occupations and activity sectors in job creation.

The author assumes that the government's employment and education policies can be re-engineered to increase economic efficiency and social equity, while ensuring growth in real jobs and productivity.

• The logic of this argument is that the multiplier effect in boosting incomes of the rural and urban working poor has never been tapped and that this workforce is the key to sustained poverty alleviation with employment generation;
• The proposed engine of growth is the SMEs (small and micro-enterprise) and the policy tool is subsidized insurance;
• The underlying premise is that the state carries the bulk of the burden in initiating a new growth and development strategy, with its corresponding system of prioritization, targets and budget allocation.

The paper provides evidence on the prospects and potential of the SME sector and proposes a package of government policies that can relieve the unemployment problem.

As a conclusion, the paper suggests that:

• The poor should not simply be the target, but the means for sustainable growth and development. This would jumpstart the multiplier process of job creation;
• Also, state contribution to social service, microcredit, etc. can help micro enterprises reach formality, earn higher incomes and generate more jobs.