Egypt must help its poor in response to Libya beheadings, economists say

The administration of Egyptian President Abdel Fattah el-Sisi must focus on economic development — not just regional security — in response to the recent beheading of 21 Egyptian Christian migrant workers in Libya, Egyptian economists and rights activists said Monday.

Sisi launched airstrikes Monday against armed groups affiliated with the Islamic State in Iraq and the Levant (ISIL), following the release of a video believed to show members of the armed group beheading the kidnapped Egyptian Christians.  

The phenomenon of Egyptian migrants traveling to the restive neighboring nation started well before the 2011 ouster of Libyan strongman Muammar Gaddafi. Libya’s Egyptian migrants come from the country’s most destitute underclass, said Abdel S. Z. Abadeer, an economics professor at Michigan’s Calvin College whose work has focused on Egypt’s economy.

“There’s no government in Libya. Still, the very poor in Egypt — mostly the uneducated people from south Egypt — usually go to work for construction companies in Libya at minimum wage rates there, because it’s still better than the wages in Egypt,” said Abadeer, whose family hails from Asyut in southern Egypt.

Unlike Egypt’s many migrants to the oil-rich countries of the Gulf — which typically confer low-wage labor to South Asian migrants and hire Egyptians for skilled positions in engineering and academia — Egyptian migrants in Libya are often “uneducated,” Abadeer said. He said they have few options in life: Work in Egypt’s informal economy, live in abject poverty, or leave.

But Abadeer said underprivileged Egyptian Christians may also choose to go to Libya because traveling to staunchly Muslim Gulf countries such as Saudi Arabia presents other perceived problems for the migrants.

Still, the 21 victims reported dead on Sunday are not the first Egyptian Christians to die at the hands of armed groups in Libya. 

But Libya is now closed. Sisi on Sunday banned Egyptians from going there.

Brandeis University economist Nader Habibi, a noted analyst of the Egyptian and Middle Eastern economies, said that although Sisi called for international intervention in Libya to combat armed groups allegiant to ISIL, that must be coupled with economic development measures.

“This is the problem, that of course Egypt needs significant economic growth to create jobs,” Habibi said. “Unemployment is a major problem.”

Egypt's Ministry of Trade and Industry did not respond to multiple interview requests.

As long as employment remains elusive, rights activists said Egyptians will continue to risk their lives to eke out a living — even if the Libya border is closed.

“Salaries in Libya, compared with the cost of living, are very good, compared to Egypt,” Ahmed Hafez, director of rights group Shayfeenkom, told Al Jazeera from Cairo. “The economy is certainly recovering … though not enough.”

“People will probably continue to risk their lives for better salaries. If people risk their lives, drowning in the Mediterranean, they will risk it to work under wars,” Hafez added, referring to countless undocumented Egyptian migrants drowning in boats headed across the Mediterranean for Europe in recent years.

Official statistics on remittances from Libya to Egypt, or on the number of Egyptians living and working Libya, are hard to come by because of the political turmoil there, analysts say. But London-headquartered Arabic-language newspaper Al Hayat reported that there were more than 2 million Egyptian nationals living in Libya in September 2014. The report cited estimates from unnamed officials.

Egypt’s economy grew by 3.5 percent in the 2014 fiscal year, according to a report last month from the World Bank. The Sisi administration has promised to return that number to the pre-2011 rate of about 6 percent. In 2011, popular uprisings ousted three-decade dictator Hosni Mubarak — a development that was hailed as a success by the Egyptian public, but that deterred investors and travelers to a nation heavily dependent on tourism.

Since Sisi took office in June 2014, unemployment figures have decreased by a fraction of a percent — 13.1 percent at the end of 2014, compared with 13.3 a year earlier. Hafez noted that big projects are in the works, and said he is confident that Sisi’s administration will achieve its economic goals. Still, Foreign Direct Investment (FDI) has stagnated — the international community appears unconfident in Egypt as a destination for investment.

The call for international military intervention in Libya is — itself — an economic development measure, economists Habibi and Abadeer both said. “If the government can create enough confidence to welcome tourists, that would significantly boost the Egyptian economy,” Habibi said, adding that a decline in tourism has helped keep Egypt’s young service-sector professionals unemployed.

“Maybe the government should also decentralize the economy, without focusing on big industry,” Habibi said. The expectation in Sisi’s big projects is that wealth will trickle down to Egypt’s underdeveloped south. The development of local economies would help address that issue.

In the meantime, Egypt’s chronically poor will struggle more than before, Habibi warned.

“Short-term fixes would be difficult because of financial problems — deficit issues, issues with currency,” Habibi said, adding that putting funds into social safety and income assistance would be a “positive step.”

But public funds for income assistance are scarce. In recent years, about 40 percent of Egypt’s gross domestic product has come from its informal sector  — for example, people selling goods without paying taxes, and often without the requisite licensing.