EGYPT: IMPACT OF ACCELERATED POPULATION GROWTH

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National
Confidential
Assessment
Z &W Center
Egypt: Impact of Accelerated
Population Growth
Confidential
GS 81-10248
September 1981
Copy 3 3 7
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National Confidential
Foreign
Assessment
Center
Egypt: Impact of Accelerated
Population Growth
An Intelligence Assessment
Information available as of 30 September 1981
has been used in the preparation of this report.
ssment was produced b
of the Office of Geographic and Societal
Research, with a contribution fro
the Office of Economic Research. Comments an
queries may be addressed to the Research Director
of the new Office of Near Eastern and South Asian
Analysis,
This report has been coordinated with the Offices of
Economic Research and Political Analysis and
with the National Intelligence Officer for the Near
This asse
East and South Asia.
Confidential
GS 81-10248
September 1981
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Figure 1
Egypt: Population and Labor Force
I I I I I I I _~ I I I
1897 1900 10 20 30 40 50 60 70 80 90 2000
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Egypt: Impact of Accelerated
Population Growth
D
Key Judgments Accelerated population growth and the related problems of rising unem-
ployment and rapid urbanization will lead to a decline in key aspects of
Egyptian life over the next 20 years or so. No combination of wise
leadership, foreign assistance, and luck is likely to alter these prospects.
The effects of this decline will disappoint and anger Egyptians imbued with
rising expectations engendered by recent economic successes and the end of
hostilities with Israel. While there is no necessary connection between
living standards and political stability, governing Egypt is likely to become
more difficult in the late 1980s and the 1990s than it is today.
Because of a dramatic rise in fertility during the 1970s, Egypt's population
will continue to increase rapidly through the 1980s before its growth
gradually tapers off in the 1990s. Population pressures will be generating
serious social strains well before the year 2000:
? Total population will increase by roughly 65 percent, to some 68 million.
? The labor force will nearly double, to some 20 million.
? Labor force growth will outdistance job creation; a million or more
Egyptians might be out of work by 1985, and up to 4 million by 2000.
? Reflecting the difficulty of expanding agriculture, almost all new jobs
will be in nonagricultural activities.
? The urban population will double, reaching 40 million and boosting its
share of the total population from the present 48 percent to about 60 per-
cent. Metropolitan Cairo will number some 20 million residents by the
end of the century.
? Urban population growth will exceed the country's ability to expand
housing, infrastructure, and amenities, leading to ever-rising congestion
and deteriorating living conditions in the cities.
The problems associated with rapid population growth will probably fall
heaviest on a shocked middle class. Although this class will make up
roughly one-third of the population by the year 2000 (compared with
16 percent today), the quality of middle class life will have deteriorated.
The increase in the number of Egyptians with middle class credentials and
aspirations already is outpacing the number of high-prestige skilled and
Confidential
GS 81-10248
September 1981
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professional jobs. The old middle class elite of military officers and public-
sector employees has lost some of its status and is increasingly challenged
by members of the private sector able to take advantage of Sadat's Open
Door economic policies. The potential for conflict between these two groups
is great.
Many of Egypt's rural and urban poor will remain politically passive. By
the year 2000, the quiescent fellah peasantry will constitute only 35
percent of the population, down from the present 46 percent. The
possibilities for mobilization against the government will increase, however.
The literacy rate will rise to 70 percent, and the average Egyptian will be
much better educated and probably be far more demanding than his
present-day counterpart.
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Key Judgments
Background
1
Government Measures to Date
3
Reclaiming the Desert
3
New Towns
4
The Open Door
4
Increase in Fertility
4
Future Patterns of Population Growth
5
Impact on the Labor Force
6
Participation
6
Skilled and Professional Workers
6
Impact on Employment
8
1981-85
8
1986-2000
11
Impact on Urbanization
12
Demand for Egyptian Workers Abroad
13
Government Options
13
Employment and Unemployment
15
Urbanization
15
Implications for Political Stability
16
Appendixes
A. Impact of Population Growth to 1980
B. Methodological Notes
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1.
Egypt: Population and Labor Force
2.
Egypt: Population by Governorate, 1976
3.
Egypt: Population and Labor Force by Age Groups, 1960-2000
7
4.
Egyptian Workers Abroad
5.
The Middle East: Projected Population Growth, 1980-2000
17
6.
Egypt: Growth of Urban Centers, 1947 to 1985
1.
Assumed Fertility and Mortality Rates for Population Projections
5
2.
Projected Labor Force Participation Rates, by Sex
3.
Male Labor Force by Educational Attainment
4.
Employment and Unemployment Projections to 1985
10
5.
Output, Employment, and Productivity Growth Rates, 1961-80, and
Projections Through 2000
10
6.
Employment and Unemployment Projections, 1986-2000
12
A-1.
Vital Statistics
20
A-2.
Labor Force and Employment by Economic Sector
20
A-3.
Labor Force Participation by Age and Sex, 1976
A-4.
Labor Force and School Participation Rates, by Region, 1976
21
A-5.
Educational Structure of the Labor Force, 1976
A-6.
Structure of Employment, 1976
A-7.
Unemployment Rates, 1976
A-8.
Middle East: Comparative Socioeconomic Indicators
A-9.
School Enrollment Rates for Full-Time Students, 1976
28
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Egypt: Impact of Accelerated
Population Growt
ti
Accelerated population growth is putting strains on
Egypt's economic resources and its severely limited
habitable area. Currently 42 million, the population
A r
(3.0 percent annually) is not unusual for the area, total
population is now second only to Turkey and is
increasing by about 1.2 million persons annually-
will increase to between 65 million and 71 million by/ the largest increment in the Middle East.l
force will nearly double, and unemployment will
become an increasingly serious problem. Reflecting
the difficulty of expanding agriculture, 60 percent of
all Egyptians will live in urban areas, compared with
50 percent now. The population of Egypt's already
crowded cities is expected to double by the year 2000.
The population increase will be most tellingly illus-
trated by the rise in population density. Although
Egypt contains nearly a million square kilometers-
about as much land as Texas and New Mexico
combined-only the narrow strip in the Nile Valley
and the Delta containing 4 percent of the land is
usable (figure 2). Into this strip-an elongated oasis in
the desert about the area of the Texas panhandle-
are squeezed 98 percent of the population and nearly
all of the agricultural land, producing a density of
more than 1,000 persons per square kilometer. This is
about 50 percent greater than the present density of
Bangladesh, one of the world's most thickly settled
mainland countries. By the year 2000, Egypt's effec-
tive population density could rise above 0 persons
per square kilometer.
Background
Egypt's population did not start growing rapidly until
the late 1930s. Although birth rates were high,
growth was restrained by correspondingly high death
rates. As health care and the potable water supply
improved after 1937, however, the death rate
dropped-slowly under the monarchy and rapidly
after the Revolution. As a result, Egypt's population
increased by 11 million persons during the 23 years
from 1937-60, and by another 15 million persons
during the last two decades, reaching 42 million in
1980. Although the current population growth rate
Since 1960 accelerated growth of the working-age
population (defined in Egyptian Government statisti-
cal publications as those aged 6 and older) has
generated rapid expansion of the labor force despite
substantial emigration, greatly increased school en-
rollments, and expanded pension programs for retired
urban workers. Egypt's labor force now stands at
11.8 million and is growing by more than 200,000
workers annually-by more than 300,000 annually if
immigrants are included. Periodically during the past
20 years, Egypt has had great difficulty finding
sufficient jobs for the labor force, despite the heavy
manpower requirement of the armed forces. Reported
unemployment reached a peak of 11 percent following
the 1967 war with Israel but has since dropped to
about 1 percent, largely because of emigration
(1 million workers and dependents since 1970) and the
post-1974 economic boom. Since 1968, employment
guarantees for college graduates in the public sector
have also helped to hold down open unemployment-
as well as to head off potentially serious student
unrest. This policy, however, has contributed to high
costs and inefficiency in much of the public sector
In the past two decades, rapid urbanization has been a
more serious problem for Egypt than unemployment.
The urban share of the population has increased from
37 percent in 1960 to 48 percent in 1980. Nearly half
of urban growth has been the result of rural-urban
migration, as people moved to the cities in search of
0
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Figure 2
Egypt: Population by Governorate, 1976
Frontier Governorates:
Mars9 Matruh T
Al Wadi al Jadid (`.L}ll
Al Bahr al Ahmar
Complete statistics for Sina
are not available for 1976.
Aswan~
)))))) Boundary representation is
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Confidential
jobs. Because of the difficulty of expanding agricul-
ture, nonagricultural activities have accounted for
some 84 percent of the increase in total employment
since 1960. Most migrants have headed for Cairo, the
country's major industrial center as well as its capital.
Cairo now houses nearly half of Egypt's urban popu-
lation of 20 million. Growth has been considerably
less rapid in the 17 other cities with 1976 populations
of more than 100,000. Rapid urban population growth
combined with insufficient resources for urban infra-
structure has led to extreme congestion, a large
shortage of urban housing, and a general deterioration
of urban living conditions
By concentrating on a limited number of key areas,
the government has been able to achieve substantial
improvements in some aspects of socioeconomic wel-
fare despite rapid population growth and urbanizaton:
? The high priority given to providing jobs has kept
Egypt's male labor force participation rate-cur-
rently 63 percent-among the highest in the region.
? Control of epidemic diseases has greatly increased
life expectancy, while improved maternity care has
reduced infant mortality to about the regional
average.
? Secondary school and college enrollment is high
even by developed-country standards, although be-
cause of neglect of primary education, especially in
rural areas, the number of illiterates continues to
rise.
? Tightly controlled prices, subsidies, and generally
ample supplies of basic foods and oil products have
until recently sheltered the urban population from
the worst effects of world inflation)
Serious strains have emerged because of rapid growth
in the number of beneficiaries of government social
programs. Soaring government spending largely at-
tributable to such programs, together with high levels
of public investment spending, have pushed inflation
to double-digit levels. Despite sizable recent gains in
urban employment and consumption made possible by
the post-1974 economic boom, urbanites resent high
prices for uncontrolled items. Especially discontented
are higher level public-sector employees-a large part
of Egypt's small middle class-who were the most
highly favored by Nasir's political and economic
policies and who constituted the backbone of his
political support.'
Government Measures to Date
While Egyptian governments have given priority to a
number of major measures to ease the effects of rapid
population growth, they have been less vigorous in
pursuing programs to curb it. Although cultural and
religious attitudes toward contraception are not as
unfavorable as in many Muslim countries, and al-
though Egypt's network of family-planning facilities
(operated in conjunction with health care centers) is
more extensive than in most less developed countries
(LDCs), birth control is not widely practiced. In 1978,
for example, only 17 percent of women at risk of
pregnancy used any form of contraceptive (only 5 to
8 percent in rural areas). One problem may be a lack
of government emphasis. When President Nasir es-
tablished the program in the mid-1960s, he placed the
need for family planning second only to defense
among national priorities. President Sadat believes,
however, that the birth rate can best be brought down
through changes in attitudes accompanying socioeco-
nomic progress.
Reclaiming the Desert. Foremost among government
measures since the Revolution to ease the effects of
rapid population growth have been efforts to reclaim
large areas of the desert for agriculture and to obtain
more-and more regular-water supplies from the
Nile. The construction (with Soviet aid) of the Aswan
High Dam permitted regulation of the flow of the
Nile. Water could be impounded when the flow was in
excess of need and released when the flow was
insufficient-, this facilitated multiple, year-round crop-
ping.
The attempted reclamation of 400,000 hectares of
desert, mostly along the western edge of the Nile delta
northwest of Cairo, was less successful. Only one-
third of the land is even marginally productive; most
' For details on the im act of population growth to 1980, see
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of the rest is submarginal and some has been aban-
doned. Current government efforts are not likely to
substantially change this situation.
Sadat's policies have made possible very high levels of
public investment in infrastructure and productive
capacity, triggering an economic boom that has tem-
porarily relieved Egypt's unemployment problem. The
opening of large new areas to foreign oil companies
has resulted in soaring oil exports. Liberalization of
foreign exchange controls has helped lure a large
volume of remittances from Egyptian workers abroad
New Towns. Of slightly greater promise is President
Sadat's "New Town" program, initiated in the early
1970s to relieve urban population pressures while
conserving cultivable land for agriculture. The pro-
gram seeks to establish 10 new cities in the desert in a
160-kilometer radius around Cairo. With an aggre-
gate population target of 5-6 million within the next
two decades, the 10 cities would accommodate slight-
ly less than one-third of the expected increase in
Egypt's urban population by the year 2000. Meeting
the program's goals within this period seems unlikely,
however, because of the high cost and lengthy lead-
times required for establishing the needed infrastruc-
ture in the desert. It will also be very difficult to
attract the investment needed to create jobs.
Thus far, two cities are under construction-the
Tenth of Ramadan, 40 kilometers northeast of Cairo,
and Sadat City, at Salam Oasis some 120 kilometers
northwest of Cairo. Each is projected to accommodate
500,000 residents by the year 2000. Planning is under
way for three other new towns; no work at all has been
done on the remainder. In the Tenth of Ramadan,
$600 million has been spent, housing has been con-
structed, and industrial investments have been com-
mitted; nevertheless, it will be a number of years
before the city is ready to support a significant
population. In Sadat City, where initial construction
has just begun and no investment commitments have
been made, it will take even longer
The Open Door. More helpful in meeting the coun-
try's immediate needs has been Al-Iftah (The Open-
ing), proclaimed by President Sadat in 1974. Comple-
mentary to Egypt's changed orientation in foreign
policy and domestic political liberalization, the Open
Door policy provides for a more outward-looking and
market-oriented economic posture to facilitate West-
ern financial and technological assistance. Although
the public sector continues to be primarily responsible
for economic development, state enterprises have been
freed to make more of their own decisions, and the
scope for private domestic and foreign investment has
been greatly increased.)
and made it easier for the private sector to imports
goods. But these effects may be ephemeral. Oil ex-
ports could drop sharply within a decade. While
domestic private investment in such fields as real
estate, finance, and tourism is booming, the inflow of
direct foreign (nonoil) investment remains small
Increase in Fertility
Egypt's population problems will become far worse in
the years ahead as a. result of the large jump in the
fertility rate that began in 1973. Declining fertility
from the mid-1960s through 1972 had made it appear
that the country was entering the second phase of
demographic transition typical of advanced develop-
ing countries. This hope was shattered when the total
fertility rate (the number of children an average
women would have if she lived through her child-
bearing years returned from 5.3 in 1972 to the 1965
level of 6.0 in 1978 and then soared to 6.7 in 1979-
by far the highest since the 1920s. The effect of the
increase has been to add some 5 million persons to the
projected Egyptian population in 1985 and 8 million
ersons to the projected population in the year 2000.
The causes of the fertility increase, although probably
related to termination of the war with Israel, are less
clear than its dramatic impact on population growth.
Operating to keep birth rates high in Egypt are deeply
rooted cultural factors favoring large families:
? The high value placed on children, including the
benefits derived from their labor.
? The preference for male children, which leads fam-
ilies to have surplus children to assure survival of at
least one male.
? The Islamic tradition that a woman's place is in the
home, which results in early marriage and relatively
low levels of education and labor force participation
for women.
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Assumed Fertility and Mortality Rates
for Population Projections
High growth
6.6
6.2
5.8
4.8
Low growth
6.5
5.8
4.9
3.2
Life expectancy at birth (years)
56.1
57.8
59.4
62.4
Derived measures
High growth
Low growth
Death rate (per thousand)
High growth
Low growth
Natural increase (percent)
Future Patterns of Population Growth
The upswing in fertility since 1972 will have a
dramatic impact on Egyptian population growth in
the years ahead. We have made three projections for
the natural increase in population between 1980 and
2000. Under our low projection, the population-
currently 42 million-would reach 65 million by the
turn of the century; under the medium projection, it
would reach 69 million, and under the high projection,
71 million. Although future trends in the fertility rate
are highly uncertain, over the 20-year period Egypt
will almost certainly add between 1.2 million and 1.5
million persons yearly to its population compared with
725,000 yearly in the past two decades. The projec-
tions assume zero net migration; if most of the present
migrants return during the next several years and few
Egyptians leave, the population in 2000 could be as
much as 2 million higher than our projections. Alter-
natively, if emigration persists at a substantial pace,
our projections could prove too high. The migration
question is considered in a later section
Underlying the projections is our belief that the
upswing in the total fertility rate has peaked and will
be reversed in the years ahead. In the high-growth
scenario, we assume that fertility will be gradually
influenced by increasing urbanization, rising educa-
tional levels, and moderate government promotion of
family planning. Under our low-growth scenario, we
assume that an all-out government family planning
effort and/or a prolonged economic recession rein-
forces the effects of gradual cultural change to bring
down fertility more rapidly than in the high-growth
scenario
In both scenarios we assume that Egyptian govern-
ments will continue to improve health care and sanita-
tion so that life expectancy extends to 62 years by the
year 2000 (table 1). Given increasing life expectancy
and higher fertility rates, it would be almost impossi-
ble for the natural rate of population increase to
return to the 1970 level of 2 percent before the early
1990s.
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Impact on the Labor Force
Growth of the Egyptian labor force will be deter-
mined by participation trends and by the increase in
the working-age population which, in turn, will be
affected by the net level of external migration.'
Ignoring external migration, some 2.3 million persons
will be added to the labor force during the next five
years-an annual rate of increase of 3.7 percent. For
the full 20-year period, the labor force will increase by
between 9.8 million and 10.1 million persons (figure
3). Because the 20-year gain will to a great extent be
determined by the number of Egyptians already born,
it will not be_ much affected by our choice of popula-
tion projections; thus, our totals for the labor force in
the year 2000 range only from a low' of 21.6 to a high
of 22.0 million persons.
During the next five years the labor force will expand
by 2.9 percent per year, reflecting the high birth rates
of the 1940s and 1950s. As the influence of the recent
increase in fertility takes effect, in 1986-90 the total
working-age population will, grow even faster, by 3.0
percent annually. In the 1990s growth of the working-
age population will range from 2.5 to 2.7 percent
annually, depending on the total population projec-
tion
Participation. In the most likely circumstances, we
expect male labor force participation to remain essen-
tially constant at least through the late 1980s before
resuming a gradual decline. An increase is unlikely,
since it would require a corresponding reduction in
school enrollment rates. On the other hand, a drop
does not seem to be in the cards, since the effects of
the two factors responsible for the 1961-80 decline-
the large rise in secondary school and college enroll-
ment rates since the late 1960s and the expansion of
retirement pension programs-have already been
nearly completely realized. In view of the moderate
rise in investment in educational facilities planned for
the 1980-84 period, educational policy will probably
focus on achieving marginal improvements in primary
and secondary school enrollment rates for males in the
' For a discussion of the methodology used in projectin the impact
of population growth in Egypt, see appendix BI
immediate years ahead. By the late 1980s and the
1990s, the rise in school enrollment rates in the 6- to
19-age group will likely accelerate, pulling down
participation rates by several percentage points.
We expect female participation to continue its gradu-
al increase. Over the next five years, the rise probably
will be retarded by an expected decline in the partici-
pation of farm wives in agriculture. By the late 1980s,
however, it should begin to accelerate
Skilled and Professional Workers. Mainly because of
the large jump in the secondary school enrollment
rate beginning in the late 1960s, the number of skilled
workers will increase much faster than the total labor
force in the years ahead. Male skilled workers (whom
we define as secondary school graduates plus 20
percent of literates with primary degrees or less) could
come to make up 22 percent of the male labor force
aged 15 and older by 1985, and 27 percent by 2000
(table 3). The addition of skilled women could boost
the total share of skilled workers to 25 percent of the
labor force in 1985 and 30 percent in 2000. (Although
the proportion of illiterate males will decline substan-
tially, the continuing school shortage in many rural
areas implies that their absolute number will gradual-
ly increase
The proportion of college graduates in the labor force
should rise even more rapidly than the proportion of
skilled workers, especially in the next several years.
This reflects the fact that primary enrollment rates
have not risen as much as those for secondary schools
and colleges. The Sadat government has recently
shown concern over the political implications of ex-
panding the number of college graduates more rapidly
than the job market can absorb them. Thus, the
government may take actions that will indirectly hold
down the growth of enrollment. Even so, the share of
male college graduates in the labor force aged 15 and
older will likely jump to 9 percent in 1985 and 12
percent in 2000.
25X
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Figure 3
Egypt: Population and Labor Force by Age Groups, 1960-2000a
1,000 Persons
6,908
6,220
5,945
2,810
4,377
4,095
1,846
18,003
2,661
12,261
3,679
5,245
26,707
Growth of Total Population, Working Age Population, and Labor Force
Average Annual Percent Change
7,287
6405 3,173
2,946 5,048
4,589 23,176
19,566
aBased on medium population
projection and assuming zero net
external migration after 1980. Data
for 1960-1976 are for census dates
(26 November in the case of the
1976 census). Data for 1980 and
beyond are for midyear.
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Labor Force Participation Rates, by Sex
Age Groups
1960
1976
1980
1985
1990
2000
6 and older total
36.8
34.5
35.3
36.6
36.4
37.7
Male
67.6
63.4
63.4
64.0
62.6
62.2
5.9
6.6
7.0
8.3
9.2
12.2
12.4
15.2
14.2
13.2
11.6
8.6
17.8
21.8
20.0
18.0
16.0
11.0
6.7
8.1
8.1
8.0
7.0
6.0
12-14 total
19.4
20.8
19.3
19.0
18.8
19.3
Male
29.2
34.0
32.0
30.0
28.0
26.0
Female
8.8
5.6
6.1
7.5
8.9
12.5
15-19 total
39.7
28.8
29.3
28.7
27.4
27.4
Male
68.0
49.9
49.9
48.0
46.0
43.0
Female
9.5
5.1
5.6
6.6
7.8
10.9
47.5
46.4
46.1
48.2
49.1
48.0
93.9
86.7
86.5
87.0
87.0
87.0
4.5
6.6
7.0
8.6
10.2
14.3
a Assuming medium population growth and zero net migration after
1980.
Impact on Employment
The accelerated growth of the labor force poses a
major challenge for present and future Egyptian
governments, which will be expected to provide the
jobs to meet the population's needs and aspirations.
The number of jobs created will be determined not
only by the government's wage and employment
policies but also by the overall rate of Egyptian
economic growth and the job-creating capacity of the
economic sectors' driving growth. To evaluate job
market conditions in the years ahead, we have exam-
ined three alternative economic growth scenarios-
high, low, and intermediate-covering (a) the next
five years and (b) the final 15 years of this century. In
each instance we have varied the rates of growth of
output and employment for industry and other nonag-
ricultural sectors to take account of historical differ-
ences in rates of output increase and in employment
creation among them at alternative gross domestic
product (GDP) growth rates.
1981-85. For the first half of the 1980s, we chose the
following scenarios:
? High economic growth (9 percent annually), with a
continuation of the oil- and industry-led rate of
expansion that prevailed during 1975-80.
? Intermediate economic growth (7 percent annually),
with industrial growth slightly ahead of the other
nonagricultural sectors.
? Low economic growth (5 percent annually) with a
rettirn to the services-led rate of expansion of 1961-
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College graduates
Secondary school graduates
Primary school graduates
Read and write
Skilled workers b
Percent of total
a Age 15 and older.
b Defined as secondary school graduates plus 20 percent of the total
of primary school graduates and those able to read and write.
Intermediate Growth. Egypt's actual average growth
performance is most likely to approximate the inter-
mediate scenario over the next five years, which
would reflect a moderate slowdown from the 1976-80
pace. Although total receipts may well increase sub-
stantially in the next year or two, they seem likely to
stagnate subsequently and then begin to decline by
the end of the period. Under this scenario we assume
that:
? By 1982 increases in oil export earnings begin to
slow because of rapidly growing domestic oiL con-
sumption; by 1984 the added impact of falling oil
production causes oil earnings to begin to decline."
? Through 1985 foreign economic assistance commit-
ments remain close to the 1981 level; by 1984 rising
repayment obligations begin to reduce net receipts.
? Future worker remittances do not offset a major
portion of the foregoing.
Economic growth of 7 percent annually would gener-
ate about 300,000 new jobs a year, compared with our
projected labor force growth of more than 450,000
1976
1980
1985
2000
406
620
927
2,052
739
1,113
1,705
3,454
597
3,250
3,856
5,677
2,432
4,668
4,698
4,955
5,917
8,842
9,681
11,443
17,100
1,345
1,763
2,476
4,589
15.1
18.3
21.6
26.8
annually (table 4). Driven by construction, the number
of new jobs in industry would increase'by about 6
percent annually while other nonagricultural jobs
would rise about 3 percent (table 5).5 With agricultur-
al output growing slowly, farm employment should
rise by only 0.5 percent.
By 1985 this growth scenario would lead to a substan-
tial rise in unemployment; about 6.5 percent of the
labor force-916,000 persons-would be without
jobs. Unemployment would remain concentrated
among women and (largely illiterate) males under 15
seeking nonagricultural jobs. With sustained econom-
ic growth of the stipulated magnitude, the demand for
skilled and professional workers could be expected to
grow more than proportionately, judging by the exper-
iences of other countries under similar circumstances.
Consequently, skilled labor would continue to be 25
scarce even without significant external migration.
Even so, in view of the increase expected in the
' In this and in the remaining scenarios through the year 2000, we
would expect growth of the services sector to be driven to a large
extent by the affluent private sector, perhaps enabling Egypt to
mancial and commercial center.
Assuming that the real price for Egypt's oil increases by 5 percent
annually and that present intensive oil exploration results in the
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Employment and Unemployment
Projections to 1985 a
Agriculture
Industry
Otherb
Total employed
Intermediate economic growth (7 percent)
Agriculture 4,984
Industry 2,390
Other 4,374
Other
Total employed
Unemployed
Unemployment rate (percent)
a Labor force aged 6 and older.
4,984
2,390
4,374
11,748
99
0.8
b Including transportation, communications, trade,
finance, and services.
5,109
3,379
5,144
13,632
546
3.9
5,109
3,140
5,013
13,262
916
Output, Employment, and Productivity Growth
Rates, 1961-80, and Projections Through 2000
6.1
2.6
7.8
8.6
9.0
3.0
5.8
3.0
0.5
2.5
12.0
7.2
4.5
9.7
3.3
6.2
6.5 Agriculture
Industry
5,134 Other
2,856 Low growth
4,925
12,915
1,263
8.9
Total
5.0
1.9
3.0
Agriculture
2.1
0.6
1.5
Industry
5.7
3.6
2.0
Other
6.0
2.4
3.5
1986-2000
High growth
Total
8.0
3.0
4.8
Agriculture
3.0
0.5
2.5
Total
6.0
2.7
3.2
Agriculture
2.6
0.5
2.1
Industry
7.5
5.4
2.0
Other
6.2
2.6
3.5
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number of college graduates, substantial unemploy-
ment among new graduates could probably be averted
only by retention of government employment guaran-
tees. The small expansion of agricultural jobs relative
to the rise in the rural population would tend to
depress agricultural wages, thereby increasing the
urban-rural differential and boostin mi ration from
the countryside.
High Growth. Economic growth of 9 percent annually
through 1985 would generate about 380,000 new jobs
each year. Even at this rate, unemployment would
climb to about 550,000, or 4 percent of the labor
force
Low Growth. Economic growth of 5 percent annually
would produce only about 230,000 new jobs each
year. If our projected participation rates held, unem-
ployment would rise to 9 percent of the labor force.
Urban labor force entrants, mainly women and young
illiterates, could be expected to bear the brunt of
unemployment, although joblessness among college
graduates also would be high; comparatively few
skilled workers would be affected
1986-2000. Egypt's economic performance is almost
certain to decline somewhat after 1985. To evaluate
job market conditions during 1986-2000 we have
selected the following scenarios:
? High economic growth of 8 percent yearly, led by
industry.
? Intermediate economic growth of 6 percent yearly,
led by services.
? Low economic growth of 4 percent yearly, led by
services.
High and Intermediate Growth. Although Egypt will
probably have some periods of rapid economic growth
during the last 15 years of the century, sustained
performance at either the high or intermediate level is
unlikely. The 8-percent rate is possible given extraor-
dinarily good luck and wise economic policies. The 6-
percent rate is possible with wise economic policies
alone. These economic policies, however, might be
very foolish-indeed, almost suicidal-political poli-
cies. Such policies would have to include continued
(and highly inflationary) devaluations of the Egyptian
pound, higher prices for farm products, the removal of
subsidies from basic goods, and a general cutback on
social programs as government spending is shifted
away from consumption toward investment. It is very
doubtful that either Sadat or a successor could estab-
lish and maintain such policies over a lone period and
still remain in power.
25
25
If Egypt's economy grew at an average rate of 8
percent a year over the 15 years, some 500,000 new
jobs would be created annually-roughly the number
needed to keep pace with increases in the labor force.
Under the intermediate scenario, only 430,000 new
jobs would be created each year. With high growth, 25
the unemployment rate (other things being equal)
would still rise from its current very low level to about
5 percent by the year 2000; with intermediate growth
it would rise to 9.4 percent (table 6)1
Low Growth. Egypt's actual economic performance in
1986-2000 will probably fall somewhere between our
low and intermediate scenarios-possibly closer to the
low scenario. Under this scenario, we assume that
Cairo is forced by circumstances and outside pressure
to adopt many of the reforms needed for a wise
economic policy. These reforms are not likely, howev-
er, to be introduced in a systematic and controlled
fashion, but rather will be belated and piecemeal
responses to foreign payments and other crises, pro-
ducing a series of shocks requiring lengthy recovery
periods and generating few incentive benefits. Eco-
nomic growth of 4 percent would create about
300,000 new jobs annually
tions.
The slow rate of job creation under the low-growth
scenario would create large-scale unemployment. By
1990 unemployment would amount to 1.7 million, and
by 2000 to more than 4 million-nearly 20 percent of
the labor force. While women and young illiterates
would be the most seriously hurt, few other economic
groups would escape unscathed. Extensive unemploy-
ment among skilled workers would drastically reduce
wage premiums for skills. With the rate of economic
expansion slower than the rise in the number of
college graduates, widespread unemployment among
the members of this group would be averted only to
the extent that they found work abroad or accepted
jobs in Egypt below their qualifications and aspira-
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annually through 1985 (figure 6, foldout) and then to
slow to an average of about 3.3 percent in the last
15 years of the century. This would bring the urban
share of the population to nearly 60 percent by 2000.
It would mean a rise of a million people per year in
the urban population, doubling it to about 40 mil-
lion--well above the expected natural increase. De-
spite the substantial rural-urban migration, however,
the rural population would also continue to increase
Employment and Unemployment Projections,
1986-2000 a
High economic growth (8 percent)
Agriculture
5,109
5,237
5,497
Industry
3,140
4,245
7,765
Other d
5,013
5,720
7,444
Total employed
13,262
15,202
20,706
Unemployed
916
1,097
1,120
Unemployment rate
6.5
6.7
5.1
Intermediate economic growth (6 percent)
Agriculture
5,109
5,232
5,497
Industry
3,140
4,085
6,901
Other
5,013
5,700
7,379
Total employed
13,262
15,017
19,778
Unemployed
916
1,282
2,048
Unemployment rate
6.5
7.9
9.4
Low economic growth (4 percent)
Agriculture
5,109
5,267
5,584
Industry
3,140
3,674
5,024
Other
5,013
5,625
7,088
Total employed
13,262
14,566
17,696
Unemployed
916
1,733
4,130
Unemployment rate
6.5
10.6
18.9
a Because of rounding, components may not add to totals shown.
b Intermediate growth scenario for 1981-85 is used as the base.
c Medium population growth. Unemployment rates for 2000 using
the low population growth series are as follows: high economic
growth, 4.3 percent; intermediate economic growth, 8.6 percent;
low economic growth, 18.2 percent. Unemployment rates for 2000
for using the high population series are as follows: high economic
growth, 5.8 percent; intermediate economic growth, 10.0 percent;
low economic growth, 19.5 percent.
d Transportation, communications, trade, finance, and services.
Impact on Urbanization
Population growth in the next two decades will accel-
erate rural-urban migration. We estimate that be-
tween 90 and 95 percent of jobs created over the next
20 years will be nonagricultural. Although the share
of'rural residents holding nonagricultural jobs will
almost certainly rise, we expect the rate of growth of
the urban population to average about 4.6 percent
by 1.3 percent yearly
The geographic pattern of urban expansion will be
determined mainly by the locations of new nonagri-
cultural jobs; in turn, these locations will be heavily
influenced by the locations of agricultural and natural
resources and-existing transportation, electric power,
and communications networks. While some small
towns and cities may surpass the 100,000 mark, most
will probably grow slowly, as in the past. Although
the Tenth of Ramadan may well achieve a consider-
able part of its 500,000 target population by 2000, we
doubt that the other new towns will make much
progress in this time period.)
We expect urban growth to be concentrated in Cairo
and the 17 other major cities of the Alexandria-Cairo-
Aswan corridor and the Canal Zone, where infra-
structure is most fully developed. Given the rapid
expansion of nonagricultural employment since 1976,
we estimate that the population of the 17 cities grew a
little more than 6 percent annually during 1977-80
and will continue to expand by a little more than 5
percent annually in 1981-85 before slowing to about 4
percent annually during the last 15 years of the
century. By the year 2000, populations of 6.0-6.5
million in Alexandria and close to 1 million each in
Mahalla el K:ubrah, Kafr el Dwar, Mansoura, Tanta,
and Assyout would be consistent with past and pro-
spective trends.
The impact of urban growth on metropolitan Cairo
will depend heavily on government policy regarding
the siting of new industry, most of which has hitherto
been located in the city. We believe that population
growth in Cairo during 1977-80 was substantially
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Confidential
slower than in the other 17 cities as a group, reflecting
the fact that many Cairo residents moved back to the
Canal cities after 1975. Cairo's intrinsic cultural,
political, and economic attractions, most of which
cannot be transferred elsewhere, will nonetheless en-
sure substantial growth in the years to come. During
the next five years, Cairo's population growth should
at least equal that of the other 17 cities. By the year
2000, natural increase alone could push the metropoli-
tan area population to 16-17 million. Even in the
absence of a deliberate policy of shifting growth to the
other large cities, however, increasing restrictions
could well keep Cairo's population growth below that
of the other large cities as a group in the last 15 years
of the century. Thus, a range of 19-21 million seems
reasonable for the population of Cairo by the year
2000
Demand for Egyptian Workers Abroad
While foreign demand for Egyptian workers will
continue to expand in the years to come, it is likely to
grow at a substantially slower pace than in the past 10
years (figure 4). We believe that such demand might
expand by 5 percent yearly through 1985 and then by
about 3 percent annually through the rest of the
century. Thus, assuming a 1980 base of 1.1 million
Egyptian workers abroad, foreign jobs could provide
employment for about 1.4 million Egyptians in 1985
and 2.2 million in 2000.
Iraq is by far the best prospect for absorbing substan-
tial amounts of expatriate Egyptian workers, especial-
ly farmers and unskilled manual laborers. From an
estimated base of 350,000 Egyptian workers in Iraq in
1980, we believe that demand for emigrants could
grow to 600,000 by 1985 and to well over a million by
2000. Iraq would therefore account for much of the
increase in demand through the year 2000. This
projection assumes strong growth in the Iraqi econo-
my and an absence of major regional disruptions due
to war or political antagonism
Libya will likely be the second largest customer for
additional Egyptian labor, unless-as is quite possi-
ble-political and cultural antagonism stems the flow.
Although Libya's shortage of indigenous labor will
grow even more acute, Tripoli can get workers from
other Mediterranean countries if political tensions
with Egypt worsen. Jordan, which is expected to
continue recording high economic growth rates, could
also offer increased, although limited, opportunities
for Egyptian nationals; it has a shortage of domestic
skilled laborers because so many Jordanian workers
find employment in the Persian Gulf.
The states of the Arabian Peninsula, traditional ab-
sorbers of Egyptian labor, already have about as
many Egyptian workers as they can handle. They will
not absorb many more through 1985 and may even
need fewer during 1986-2000. Saudi Arabia, which
employs an estimated 250,000 Egyptians, hopes to
severely limit the growth of its foreign population in
the future. While healthy economic growth is expect-
ed to continue and plans for limiting expatriates may 25
be unrealistic, opportunities for additional Egyptian
labor are dim. In the construction sector, the Saudis
have been turning to contractors from the Far East
who provide everything involved including labor. Al-
though Egyptian professionals will remain important
in the areas of teaching and administration, they may
face increasing competition from Saudi citizens.
About 1.5 million Saudis (out of the native population
of 5 million) are now in school. As these students
graduate they will take over professional jobs now
held by foreigners. The same situation is likely to be
found in Kuwait and other Persian Gulf countries 25
such as Qatar, the United Arab Emirates, Oman, and
Bahrain. The need for foreign labor in these countries
is also likely to be filled mostly by workers from South
Asia and the Far Eas
Government Options
Egypt's population will continue to grow rapidly
despite any measures the government may take. Nev-
ertheless, by greatly increasing the priority given to
family planning efforts, the government could bring
fertility down to levels close to those assumed in the
low population projection. With increased priority, 25
public health workers could be expected to put more
effort into the program, contraceptives of all types
could be made available on a far more abundant and
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Figure 4
Egyptian Workers Abroad
1980 total 1,100,000 (estimate)
1985 total 1,450,000 (projection)
(Bar values are in thousands.)
JORDAN//.
SAUDI ARABI
Boundary epre entation is
not necessarily authoritative.
Confidential
OTHER ARAB
COUNTRIES
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reliable basis, and programs to supply user motivation
could be greatly intensified. A pilot project in one
village in Menoufia governorate recently demonstrat-
ed that with such efforts participation in family
planning could be raised to more than 30 percent of
women at risk of pregnancy-approaching rates in
such countries as Taiwan, Korea, and Singapore that
have successfully reduced fertility.
We doubt, however, that the government will make
the effort required to greatly improve the effective-
ness of family planning, at least not within the next
five to eight years. A marked change in government
priorities with regard to family planning would prob-
ably come only after dramatic evidence revealed the
existence of a population crisis that could affect
political stability. Consequently, we believe popula-
tion growth in Egypt will most closely approximate
our high projection for some years to come
absorbed abroad actually emigrated, the unemploy-
ment problem would remain serious unless the de-
mand for Egyptian workers abroad greatly exceeds
our expectations. For example, if 70'percent of the
expected emigrants over the next five years were
replaced from the ranks of the unemployed, their
departure would lower the 1985 unemployment rate
by only 1.5 percentage points at most 25
During the final 15 years of this century, Egypt's
success in increasing jobs will depend mainly on its
progress in the politically difficult task of implement-
ing economic reforms. Since these reforms would
almost certainly require a reduction of consumption in
favor of investment, they would be highly unpopular
in Egypt. Deterring quick implemention will be
Egypt's weak system of public administration, with its
overcentralized authority at the top; divided responsi-
bility among overlapping jurisdictions at the operating
level; and frequent turnover at the cabinet, subcab-
inet, and senior technician levels. In view of these
obstacles, we believe that economic growth will slow
down after 1985-perhaps to the range of 4 to 6
Employment and Unemployment. Accelerated growth
of the working-age population will almost certainly
cause a sharp rise in unemployment from its present
extremely low level. Moreover, Egyptian governments
will have fewer options in the future for limiting open
unemployment. The still undermobilized armed forces
are large for Egypt's needs and financial resources.
Further large increases in retirement pension pro-
grams or in secondary school and college enrollment
rates would be costly and, in the latter case, only
temporary solutions. In view of the sizable body of
unneeded workers already employed by the public
sector, we believe that the Egyptian Government
would only increase their numbers greatly if such
action was necessary to defuse a serious political
crisis. Thus, the government's only real option, aside
from increasing the number of jobs through economic
growth, is to encourage external migration.
During the next five years, there are few practical
steps that the government can take to increase the
number of jobs beyond the level depicted in our
intermediate growth scenario. Thus, in the absence of
external migration, the number of unemployed-
mostly women, young illiterates, and other new labor
force entrants-would rise to about 6.5 percent of the
labor force. Even if all Egyptians who could be
percent
Egypt's unemployment problem will thus continue to
worsen after 1985, with joblessness probably spread-
ing to experienced workers in most occupational
categories. If economic growth averaged 5 percent
annually during 1986-2000, for example, the number
unemployed could reach about 3.1 million in the
absence of external migration-14 percent of the
labor force. In these circumstances, at least 90 per-
cent of Egyptian emigrants probably could be re-
placed from the ranks of the unemployed. Over the
15-year period, a net emigration of 800,000 Egyptian
workers could therefore reduce projected joblessness
by some 720,000 persons, cutting the projected unem-
ployment rate to 11 percent
Urbanization. For a variety of reasons, including the
fact that most new jobs will be created in the cities,
little can be done to stem the tide of urbanization.
25
25
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With the rapid urban growth we expect during the
next five years, urban infrastructural expansion and
improvement almost certainly will fail to keep pace
with population increases despite high investment
levels. Although urban population growth should slow
in subsequent years, industrial, agricultural, and other
demands on limited investment funds will probably
cause urban housing and services to continue to
deteriorate and urban congestion to continue to grow.
The steps that Cairo could take seem more likely to
spread than to significantly reduce the burden. Such
steps could include: moving part of the bureaucracy
away from Cairo; establishing free-trade zones and
new export-oriented industries in the Canal Zone;
locating low-cost public housing and new factories in
the outskirts of cities; constructing better commuter
transport facilities; and lifting rent controls in city
centers to stimulate both private urban renewal and
the exodus of workers to the suburbs. Since many,
perhaps most, towns and cities of less than 100,000
population largely lack urban infrastructure and
amenities, any attempt to implement a small-town
development strategy to ease pressures on larger cities
would be costly and difficult.
Implications for Political Stability
In the years ahead, rapid population growth and its
byproducts will make Egypt'a much different place to
live in than it is today. If present trends continue:
? The labor force will number close to 22 million by
2000, and nonagricultural employment will make up
68 to 72 percent of the total (28 to 35 percent in
industry), depending on whether economic growth
during 1986-2000 averages 4 or 6 percent annually.
? Some 70 percent of the population aged 10 and
older will be literate by the year 2000-72 percent
of the men and 64 percent of the women.
? The middle class-skilled and professional males
with secondary school and college educations and
their families-will make up one-fifth of the popula-
tion by 1985 and almost one-third by the year 2000,
compared with 16 percent at present.
? With continued growth of the relatively affluent
private sector, members of this group will come to
represent an increasingly larger share of the middle
class in numbers., wealth, and political influence; at
the same time, the share of middle class members
with relatively low incomes and no political influ-
ence will climb substantially.
? The politically passive.fellahin (peasantry) will
shrink from 46 percent of the populace to about 35
percent by 2000; at the same time, the politically
unaware though far from passive urban lower
classes 6 will decline from 40 percent to about 35
percent of the populace.
? Although its population growth rate is slower than
those of some neighbors, Egypt will remain (after
Turkey) the second most populated country in the
Middle East through the year 2000 (figure 5).
These byproducts of rapid population growth will
reinforce and accelerate sociopolitical changes al-
ready taking; place under the Sadat government: the
rapid increase in the share of the population with
middle class credentials and aspirations; the division
of the middle class between civilian and military
public sector employees on one hand and private
sector entrepreneurs and their employees on the other;
the greatly increased number of secondary school and
college graduates who fail to achieve positions of
prestige or influence; the rising educational level of
the average Egyptian, making him better informed of
conditions both in Egypt and elsewhere, more de-
manding that the government serve his interests, and
perhaps less likely to follow Egypt's pharonic tradition
of giving allegiance to whoever is in power
During the next half decade or so, the rise in the share
of output that must be diverted from consumption to
investment to cope with rapid population growth will
tend to increase social tension and strain. This will be
especially so as the urban populace comes to realize
not only that few postpeace increases in consumption
are possible but also that substantial further-and not
necessarily equal--sacrifices will be necessary. Espe-
cially vulnerable will be higher level civilian and
6 That families ded b males with primary school educations
or less.
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Figure 5
The Middle East: Projected Population Growth, 1980 to 2000
Tunisia
Country Populations
(Areas are scaled according to population)
Saudi
Arabia
=Bahrain
I Qatar
U.A.E.
1.1 t0 2.0
2.1 to 3.0
3.1 to 4.0
Tunisia
Source: World Population Trends and Prospects,
Summary Report of the 1978 Assessment,
United Nations
Kuwait
o Bahrain
Saudi Qatar
Arabia U.A.E.
Oman
Yemen (Aden)
Yemen (Sanaa)
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military public sector employees who are already
suffering growing malaise under Sadat, the result of a
pronounced shift in income distribution in favor of
private sector entrepreneurs
Middle class public sector employees, both military
and civilian, have numerous grievances against the
Sadat government. Some are upset by Egypt's isola-
tion from other Arab countries as a result of the peace
treaty with Israel. Some feel Sadat's commitment to
Islam is weak. But the bottom line is the relative
decline in their economic fortunes, hastened by infla-
tion. Most of all, they resent their replacement by the
private sector as Egypt's economic elite. A few speak
fondly of the good old days under Nasir
This malaise will be alleviated by expanding career
opportunities in the private sector and continuing,
though reduced, external migration. Even so, since the
middle class public sector employees will probably
continue to bear much of the brunt of whatever
diversion of resources from consumption to investment
is needed to cope with rapid population growth, the
malaise could continue to intensify. On the other
hand, if the position of private entrepreneurs were
eclipsed by a resurgence of the old elite as the result
of restoration of restrictions on private investment, or
a new military adventure-perhaps against Qadhafi
in Libya, the malaise could quickly disappear
As the 1980s segue into the 1990s, rapid population
growth coupled with reduced economic growth will
mean little increase in real living standards for Egyp-
tians outside the affluent private sector. Slower eco-
nomic growth will not only bring greatly increased
unemployment but also slower expansion of housing
and other elements that contribute directly to the
quality of life, such as potable water and sewage
systems, public transportation, and home electrifica-
tion. Contrasts between socioeconomic progress in
Egypt and in the oil-rich Arab states could become
glaring. Urban areas obviously will suffer most. As
one scenarist for the year 2000 puts it, "Downtown
Cairo, with its skyline dominated by new hotels and
office buildings, will wear the look of the future, while
surrounding it is one of the world's largest and most
miserable slums, in which the real Egypt is tucked
away from world view." F77 I
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Appendix A
Impact of Population
Growth to 1980
Rapid population growth in Egypt did not get under
way until the late 1930s. At the time of the first
accurate census in 1897, the population totaled 10
million, only 25 to 50 percent higher than during
Roman rule. In the next 40 years, the population
increased by only 6.5 million persons. Although birth
rates were close to physiological limits, population
growth was restrained by correspondingly high death
rates, particularly for infants.
With improvements in health care and potable water
supplies since 1937, the death rate has dropped. By
1980, it stood at 12.5 per thousand, compared with 33
in 1937 (table A-1). At the same time, despite a large
temporary decline from the mid-1960s to 1972, the
birth rate in 1980 was only about 10 percent below
that of 1937. The consequence has been rapid popula-
tion growth, especially since 1972. The population
increased by 10.6 million persons (64 percent) during
the 23 years 1937-60. Despite the substantial out-
migration of Egyptian workers and their families to
other Arab countries since 1970, another 15 million
persons (55 percent) were added in the past 20 years,
bringing the population to 42 million in 1980. Al-
though its current natural growth rate-3.0 percent
annually-is typical of those of the Middle East,
Egypt's total population is now second only to that of
Turkey
Labor Force
Partly reflecting gradually improving socioeconomic
welfare among most Egyptians, the labor force grew
more slowly than the population as a whole until
1960. This resulted mainly from the large increase in
the share of the population enrolled in school, as well
as from a substantial decline in the share of the
population in the working ages, caused in turn by the
acceleration of population growth after 1937. Since
1960 the rate of growth of the labor force has
increased, despite the out-migration of workers, and
now stands at about the same rate as population
growth. Although work force participation continued
to decrease with rising school enrollment rates and the
expansion of government pensions for retired urban
workers, the effect was offset by stepped-up growth of
the working age population as the post-1937 popula-
tion bulge entered the working ages. Currently, the
labor force stands at 11.8 million and is growing by 25X
more than 200,000 workers annually (table A-2).
Among the Middle Eastern countries, Egypt is second
only to Turkey in the size of its labor force
Despite the decline in recent decades, Egypt's male
labor force participation rate-63.4 percent of all
males aged 6 and older (table A-3)-remains high by
the standards of the Middle Eastern Muslim coun-
tries, reflecting both the government's strong urban
job creation efforts since the early 1960s and the
relatively greater economic opportunity in Egypt com-
pared with many of the other countries. Egypt differs
from developed countries in the use of child labor;
about 60 percent of the labor force consists of unpaid
family workers aged 14 and younger. It also differs by
virtue of the relatively large proportion of the labor
force occupied by workers over 65-even though
Egypt's pension system for urban workers brings this
proportion well below those in most other LDCs.
Nevertheless, the age distribution of male participa-
tion in the Egyptian work force otherwise conforms
closely to those of industrial countries, which is 25
mainly the result of Egypt's exceptionally high school
enrollment rates in the 15- to 24-year age groups.
Male labor force participation is lower in urban than
in rural areas by about 10 percentage points (table
A-4), mainly because of the greater availability of
educational opportunities in urban areas.C
In common with most other Muslim countries,
Egypt's female labor force participation rate-while
gradually edging upward-remains extremely low
whether compared with developed or other developing
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Birth rate (per thousand)
50.5
47.0
49.1
45.2
36.5
42.1
Death rate (per thousand)
33.7
32.9
26.8
19.9
17.3
12.5
Natural increase (percent)
1.7
1.4
2.2
2.5
1.9
3.0
Infant mortality (per thousand live births)
230
175
140
108
116
90.
Life expectancy (years, at birth)
NA
36
41
48
50
56
Total fertility rate (per woman)
5.8 b
5.6
5.7
6.0
5.5
6.6
Labor Force and Employment by Economic Sector
Agriculture and fishing
Industry
Mining and quarrying
Manufacturing
Electricity, gas, and water
Construction
Other
Transport, storage, and communications
Trade, restaurants, and hotels
Community, social, and personnel services
Of which:
Public administration and defense
Not classifiable
Total employed
Unemployed
Total labor force
4,023
4,091
4,311
4,879
4,984
505
709
899
1,886
2,390
362
570
20
33
690
1,367
22
27
35
62
121
113
154
424
1,288
1,845
2,399
3,467
4,374
141
203
251
480
439
593
617
857
704
1,050
1,315
1,760
Negl
Negl
Negl
906
3
0
216
182
Negl
Negl
7,609
10,132
11,748
Neil
Negl
173
838
99
5,816
6,645
7,782
10,970
11,847
a Because of rounding, components may not add to the totals shown.
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Labor Force Participation
by Age and Sex, 1976
6-11 21.8
8.1
15.2
12-14 34.0
5.6
20.8
15-19 49.9
5.1
28.8
20-24 71.7
12.4
41.9
25-29 92.8
10.8
50.8
30-39 97.5
6.7
51.4
40-49 96.9
3.9
50.9
50-59 96.0
2.9
50.4
60-69 65.0
4.6
33.7
70 and over 35.4
0.1
16.9
6 and over 63.4
6.6
34.5
12 and over 74.1
6.3
40.6
countries. In 1976 the share of females aged 6 and
over in the labor force amounted to 6.6 percent,
compared with 5.5 percent in 1960. Women in the 20-
to 24-year age group are most likely to be found in the
work force; thereafter, participation drops off sharply.
Females have gained by far the greatest acceptance in
the largest cities, where participation rates average 2
percentage points above the urban average and 5
percentage points above the overall average. Although
female participation in agriculture has dropped sharp-
ly in recent decades, a rise in the share of rural
women employed in nonagricultural activities has
prevented a corresponding decrease in rural female
participation rates. Female participation in agricul-
ture remains highest in the cotton-producing gover-
norates of Kafr el Sheikh and Behera in Lower Egypt.
Labor Force and School Participation Rates,
by Region, 1976 a
All
Egypt
Urban
Governorates b
Lower
Egypt
Upper
Egypt
Urban Lower
Average Egypt
Upper
Egypt
Rural
Average
Labor force
63.4
58.4
58.2
57.6
58.2
67.4
70.0
68.7
Full-time school
28.2
32.7
32.6
33.4
32.8
27.0
21.2
24.1
Retired/handicapped
3.5
4.1
3.6
4.5
4.0
2.7
3.5
3.1
Other
4.9
4.8
5.6
4.5
5.0
2.9
5.3
4.1
Labor force
6.6
11.5
8.5
7.2
9.5
4.8
3.6
4.3
Full-time school
17.5
30.3
25.8
20.7
26.5
12.7
7.0
10.3
Other
75.9
58.2
65.7
72.1
64.0
82.5
89.4
85.4
a Population aged 6 and older.
b Cairo, Alexandria, Suez, and Port Said.
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Total
Illiterate
4,848
Read and write
2,493
Primary school graduates
638
Secoiidry school graduates
1,032
College-graduates
526
Total
9,537
4,668 180
2,432 61
597 41
739 293
406 120
8,842 695
As a result of the uneven expansion of the educational
system in the last 20 years and the heavy out-
migration of skilled workers to neighboring Arab
countries since 1970, the labor force in Egypt is
characterized by a high level of illiteracy, a shortage
of skilled workers, and a surplus of college graduates
(table A-5). Illiterate males are most heavily employed
in agriculture. In 1976, however, some 30 percent of
the males aged 15 and older working in nonagricul-
tural sectors were illiterate; such males composed 92
percent of the workers in retail trade, 86 percent of
those in domestic services, and 48 percent of those in
industry and transport. Only 26 percent of the female'
labor force participants were illiterate in 1976; they
were also concentrated in agriculture. In 1976 skilled
workers aged 15 and older (defined as secondary and
primary school graduates of both sexes) numbered
only 1.7 million, 18 percent of the total labor force (32
percent of the nonagricultural labor force)-low for a
country at Egypt's stage of economic development.
The scarcity has put strong upward pressure on wages
for skilled workers compared with either college
graduates or with illiterates.
At 526,000 or 5.5 percent of the labor force in 1976,
the number of economically active college graduates
appears to be excessive. For example, the Egyptian
ia'tio-of-college graduates to other primary and secon-
dary school graduates is 32 percent, well above the
US ia'tio (for whites) of 27 percent. In response to
serious unrest among college students-in late 1968
that was triggered largely by mounting difficulties in
finding jobs,' the Egyptian Government has since then
guaranteed employment in government administra-
tion or state-owned enterprises to holders of college
degrees. As a result: many college graduates in Egypt
are performing tasks that could be performed equally
well by workers of lower educational attainment
Employment. Despite rapid labor force growth, the
Egyptian governments have managed to generate
enough jobs to meet the needs of the labor force
during much of the past 20 years. They have been
helped by the heavy manpower needs of the armed
forces and exceptionally rapid economic growth (6.1
percent annually). Over the full period, an average of
207,000 new jobs were created annually, compared
with an annual labor force growth averaging 203,000.
From 1962-74, however, employment growth of this
magnitude was made possible partly by policies that
required government-owned enterprises (which now
account for some 7:5 percent of nonagricultural activ-
ity) to take on more employees than they needed. Job
market conditions have greatly improved with the
large rise in output since 1974 and unemployment has
been substantially reduced; total employment is cur-
rently growing by more than 400,000 annually and
now stands at 11.7 million.
About 84 percent of the increment in employment
since 1960 has been absorbed by nonagricultural
activities. With the acceleration of industrial expan-
sion, employment in industry rose nearly twofold,
increasing its share of total employment from 12 to 20
percent. At the same time, employment in trade and
finance, transportation and communications, and
services (including government administration and
defense) grew by about 80 percent and has come to
account for 37 percent of the total. While much of the
latter gain has been in low-productivity jobs in such
fields as personal and domestic services and retail
' Student demands also included greater participation in college
management, liberalization of the curricula, and more popular
participation in government. Joined by young unemployed workers,
in November the students underscored their demands by staging
three days of mass demonstrations that started in Mansoura and
quickly spread to Cairo, Alexandria, and other cities. The demon-
strations were suppressed by the Army, leaving scores dead. r
25
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trade, a sizable share represents an increase in rela-
tively well-paid jobs in large-scale enterprises, govern-
ment administration, and the military. Expansion of
the armed forces probably accounted for about one-
eighth of the increase; Egypt's military forces now
number about 500,000-again second only to Turkey
Reflecting the slow growth of agricultural output, its
already high labor intensity, and the lack of addition-
al land suitable for farming, agricultural employment
increased by only 7 percent during 1937-60 before
jumping about 16 percent in the last 20 years, to 5.0
million (42 percent of the total). Although major
projects were initiated to reclaim desert lands, these
have not met expectations. The rise mainly reflects
increased demand for labor stemming from the shift
to perennial farming for many crops made possible by
completion of the Aswan High Dam in the early
1960s. Despite expropriation and redistribution of
farms in excess of 20 hectares in the decade following
the revolution, about 60 percent of farmers work for
cash wages; the landholdings of most of the remaining
farmers amount to less than 2 hectares per farm unit.'
In 1976 some 640,000 workers-13 percent of the
agricultural labor force-
bers aged 6 to 14 years.
Women have made substantial progress in recent
decades in gaining acceptance in urban economic life.
Female employment in nonagricultural activity
jumped to 540,000 by 1976, more than double the
1960 level, suggesting that the traditional antipathy to
women working outside the home is being eroded by
the shortage of skilled male workers and increased
female educational levels. At the same time, female
employment in agriculture, mostly farm wives,
dropped by 110,000. In 1976 only 22 percent of the
females in the labor force worked in agriculture.
Nonagricultural female employment is largest in
health,9 education, and welfare services, where fe-
males made up 38 percent of total employees, fol-
lowed by trade and finance (12 percent), government
administration (10 percent), and manufacturing (7
percent) (table A-6).
' About 65,000 farm owners hold farm units of 4 to 20 hectares
totaling about 400,000 hectares.
' About one-fourth of Egypt's physicians are females, for example.
Unemployment and Underemployment
One result of the relatively slow rate of job creation
between 1960 and 1974 has been a large increase in
the difficulty new labor force entrants encounter in
finding employment. At 2.2 percent of the labor force
in 1960, joblessness jumped sharply after the end of
the 1956-65 boom and soared to some 11 percent in
1968 following the closure of the Suez Canal. By the
time of the census in 1976-the second year of the
current boom-some 838,000 Egyptians (7.6.percent
of the labor force) were unemployed. Of these, 95
percent were seeking their first jobs, and nearly one---
third were in the 20- to 29-year age group, mostly
with secondary school or college training. Only 5
percent of the jobless-about 40,000 persons-were
experienced workers. As a result of the greater diffi-
culty they encounter in obtaining their first jobs, 30
percent of the females in the labor force were unem-
ployed compared with 5.6 percent of the males (table
A-7). For men, urban unemployment rates substan-
tially exceed rural rates, mainly because rural-urban
migration tends to depress rural unemployment."
With the acceleration of job creation and out-migra-
tion to other Arab countries since 1976, we estimate
that by 1980 unemployment had slipped to 100,000
less than 1 percent of the labor forcel
25;
25
In the past, most observers have considered the
seasonality of agriculture as the main source of
underemployment in Egypt. With the stagnation of
agricultural employment during 1937-60, the increase
in perennial cropping after 1962, and the apparent
rise in the share of rural residents holding nonagricul-
tural jobs, agricultural underemployment probably is
now much reduced." During the 1966-74 period of
economic stagnation, underemployment (in the sense
of featherbedding) became substantial in urban areas
with the hiring by the public sector of unneeded
college graduates, discharged military personnel, and
other workers in order to hold down open unemploy-
ment. While still a significant factor, urban underem-
10 Higher unemployment rates for women in rural areas, most of
whom are seekin nona ricultural employment, largely reflect their'
lower mobility
" Only 84 percent o emp oye rural residents aged 6 and older
were classified as having jobs in agriculture in 197
25
25
25
25
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Agriculture, forestry, and fishing
4,723
156
4,879
789
179
Agriculture and inland fishing
4,629
153
4,783
775
176
Wood cutting and charcoal
I
NEGL
1
NEGL
NEGL
Textiles, clothing, and leather
499
52
551
27
6
Wood and wood products, including furniture
158
3
161
19
5
Paper, paper products, and printing
and publishing
41
3
44
1
NEGL
Chemicals and chemical petroleum, rubber,
and plastic products
85
11
96
1
NEGL
Glass, pottery, and other nonmetallic
mineral products n.c.c.
65
3
68
4
1
Fabricated metal products, machinery,
and equipment
196
7
203
9
2
Transportation, storage, and communications
464
16
480
6
4
Transport and storage
417
9
426
6
4
Finance, insurance, real estate, and
business services
71
17 "
88
1
1
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Community, social, and personal services
Public administration and defense
Sanitary and related services
Education, health, and related
community services
Recreational and cultural
Personal and household services
International and other
ployment probably has also decreased markedly with
the large expansion of nonagricultural output since
1974. In 1977 employment guarantees in public sector
enterprises were terminated, remaining in effect only
Total, age 6 and over
5.6
30.0
Age 6-11
29.0
73.0
Age 12-14
24.0
41.0
Age 15-19
8.3
29.0
Age 20-24
12.8
34.0
Age 25-29
3.8
7.9
Urban, age 6 and over
7.2
25.0
Urban governorates b
7.3
22.0
Lower Egypt
7.2
30.0
Upper Egypt
6.9
27.0
Rural, age 6 and over
4.5
38.0
Lower Egypt
4.5
32.0
Upper Egypt
4.3
47.0
a About 95 percent of the unemployed were seeking their first jobs.
The similarity of unemployment rates among Egypt's main geo-
graphical regions masks fairly wide differences among the governor-
ates. Although other factors are involved, in Egyptian urban areas
unemployment rates for males tend to be high where net in-
migration is large; in rural areas unemployment rates for males tend
to be low where net out-migration is large.
b Cairo, Alexandria, Suez, and Port Said.
in public administration.
Internal Migration and Urbanization
Reflecting the expansion of urban jobs and the rela-
tive attractiveness of urban life to many Egyptians,
rural-to-urban migration since the turn of the century
has helped to steadily increase the share of the
population in towns and cities with 20,000 inhabitants
or more.12 Since 1947 the urban population has grown
at an average rate of 3.3 percent annually, boosting
the urban share of the population to 37 percent in
1960 and 44 percent in 1976-still well below the
urban shares in most of Egypt's Muslim neighbors.
The estimated net flow of migrants to urban areas
averaged 85,000 to 95,000 annually during 1947-60,
and 145,000 to 155,000 annually after 1960. The
rural population nevertheless continued to increase b
1.7 percent annually during 1948-76.
11 Egypt defines the urban population as the residents of the urban
governorates, and the capitals of (a) other governorates and (b)
districts (markaz). Most observers believe this equivalent to includ-
ing the residents of all towns and cities with populations of 20,000
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Cairo, the country's major industrial center as well as quickly, soon marries-frequently a girl from his
its capital, has been the preferred destination for most original village, and establishes residence in a quarter
rural-urban migrants. In 1960 about 30 percent of of the city occupied predominantly by migrants from
Cairo's residents were migrants, and the share has his home region.
grown since then. During 1947-60 seven out of 10
rural migrants ended up in Cairo; since then, the
number has climbed to nine out of 10. As a result, the
Cairo metropolitan area, with a 1976 population of
8.3 million (nearly double the 1960 figure), now
accounts for half the nation's urban population
Before 1960 some 17 additional cities of 100,000 or
more inhabitants (1976 population) were important
destinations of migrants; as a group, they have since
lost much of their attraction. Notable among these
were the diversified industrial city of Alexandria (the
nation's second largest urban area), the Lower Egyp-
tian cities of Tanta, Mahalla el Kubrah, and Man-
soura (in the center of the nation's cotton growing and
processing area), and the Canal cities of Port Said,
Suez, and Ismailia. The three Canal cities lost sizable
shares of their populations-largely to Cairo-as a
result of the closure of the Suez Canal from 1967-75,
although they were well on the way to recovery by
1976. The 17 cities accounted for 33 percent of the
total urban population in 1976, down from 37 percent
in 1960. Towns and cities of between 20,000 and
100,000 inhabitants have been consistent net sources
of migrants to the larger cities; their combined growth
fell well below the natural population increase
throughout 1948-76.
The typical rural migrant is a young, unskilled male
whose first contact in the city is with a friend or
relative from his original village. Although he tends to
be better educated than the average for either urban
or rural areas, recent studies indicating that 30
percent of migrants to Cairo are illiterate place him at
about the national average for males in his age group.
He is most likely to have come originally from
Souhag, Beni Suef, or Kena in the Upper Egypt or
Menoufia in Lower Egypt.13 He usually finds a job
" Based on comparison between actual and natural population
increase averaged over the 16 years 1961-76. During the 1970s
rural-urban migration apparently originated mainly from Behera in
Lower Egypt and Fayoum, Beni-Suez, and Assyout in Upper
Egypt, the governorates with the lowest rural unemployment rates
External Migiration
Although Egypt traditionally has exported lawyers,
teachers, physicians., and other professional workers to
neighboring Arab countries, large-scale out-migration
did not. get under way until after the 1973-74 oil price
hikes. The heaviest outflows from Egypt occurred in
1974-75, with Egyptian workers going not only to the
oil-rich countries such as Libya, Saudi Arabia, Iraq,
and Kuwait, but also to such countries as Jordan and
the Sudan to :replace migrants from those nations to
the oil-rich countries. By 1976 the estimated number
of Egyptian workers in the other Arab countries
numbered about 500,000, some 4 percent of the
Egyptian labor force; with their dependents, they
totaled about 750,000. While professionals remained
important in the stepped-up outflow, large numbers of
skilled and unskilled workers, especially construction
workers, were also included. For example, the 1975
Kuwaiti census distributes the skill levels of the
37,500 Egyptian workers there at the time as follows:
professional and semiprofessional, 32 percent; skilled
and semiskilled, 34 percent; and unskilled 34 percent.
Continuing strong demand abroad sustained a sub-
stantial net outflow of Egyptian migrants in 1977-80.
We estimate that by 1980 Egyptian workers abroad
numbered about 1.1 million, an increase of some
600,000 over the 1976 figure. Included among recent
emigrants are increasing numbers of middle class
former public sector employees (both military and
civilian), even some from the subcabinet level. But
since the largest number by far of workers emigrating
after 1976 have been skilled and unskilled construc-
tion, factory, and farm workers probably not taking
their families, we estimate that the increase in worker
dependents abroad was hardly more than 50,000
persons during the period. Even though external
migration has aggravated shortages of certain types of
skills--from the good manager to the experienced
carpenter or welder--the departure of many unskilled
and semiskilled workers (from one-third to one-half of
the total) probably has contributed significant) to the
current low level of Egyptian unemployment.
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25
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during 1967-73, welfare benefits in these areas have
been striking, especially for the urban population.
They have made a substantial contribution to Egypt's
achievement of a high degree of social stability, at
least by Middle Eastern standards. At the same time,
most of these programs have helped to build up a vast
clientele of Egyptians dependent on their continu-
ation, thus dangerously reducing the government's
political freedom to redirect or prune them as chap -
ing circumstances require
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Egypt
290
44
Algeria
1,390
52
Bahrain
5,130
78
Iraq
1,720
66
Jordan
870
42
Kuwait
11,780
NA
Lebanon
NA
60
Libya
7,280
30
Morocco
510
38
Oman
4,880
NA
Qatar
20,000
NA
Saudi Arabia
9,800
NA
Sudan
320
20
Syria
770
49
Tunisia
910
NA
UAE
15,500
NA
Yemen (Aden)
310
33
Yemen (Sana)
330
NA
Other
Iran
2,160
47
Turkey
1,130
45
Literacy Life Infant Death
Rate c Expectancy d Mortality a Rate f
58 88
61 65
62 81
37 57 112 12
62 57 125 12
a Data for Egypt are for 1976. For the remaining countries, data are
for the most recent year available, mostly in the mid-1970s; data on
life expectancy, infant mortality, and crude death rates are mostly
evaluated estimates.
b US dollars.
Percent.
d Years, at birth.
Per 1,000 live births.
Per 1,000 population.
Welfare
Egyptian socioeconomic advances, which have boost-
ed the country's socioeconomic ranking among its
Muslim neighbors in the past 20 years (table A-8),
have been concentrated in four areas: jobs, health
care, secondary and higher education, and low cost
food supplies, oil products, housing, and public serv-
ices, effected through price controls and subsidies.
Despite rapid population increase and diversion of
much of the nation's resources to the war effort
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Health Care. Apart from jobs, some of the most
striking socioeconomic gains in recent decades have
been made in the area of health care. This has been
largely a byproduct of the increase in trained medical
personnel. Life expectancy (at birth) has risen from 41
years in 1947 to 48 years in 1960 and 56 years in
1980, significantly above that in most of Egypt's
Muslim neighbors.
Aided by a large increase in the number of physicians
(18,000 in 1971 compared with 4,800 in 1950), the
greatest progress apparently has been made in the
control of epidemic and other communicable diseases.
Progress against diseases caused by inadequate infra-
structure, such as poor sanitation, has been less
notable. While improvements in potable water sup-
plies have reduced deaths from gastrointestinal dis-
eases, along with parasitic diseases they remain
among the nation's top killers-especially of infants.
Although reduction of infant mortality-mainly
through improved maternity care-was a major fac-
tor in increasing life expectancy before 1960, since
then progress against infant deaths-currently 90 per
1,000 live births compared with 108 in 1960-has
slowed sharply. Infant mortality in Egypt remains far
above the rates in nearby Jordan, Iraq, and Syria
Education. Since the Revolution, Egypt has made
remarkable progress in expanding the educational
system, albeit most of the gain in primary education
came before 1960. Although foreign groups had long
sponsored private schooling, the public primary edu-
cation system did not even get started until the 1920s.
By 1954 some 42 percent of children in the primary
school age group (6 to 11) were enrolled. After school
attendance became free and compulsory (where
schools were available), the primary enrollment rate
shot up to 61 percent by 1960. Since then, the primary
enrollment rate has stagnated, edging up to 64 per-
cent by 1976 (table A-9). More than half the gain
since 1960 represents increased female enrollments;
the male enrollment rate rose only from 72 percent to
74 percent during the period." The stagnation of
primary enrollment rates reflects the government's
neglect of the many rural areas that still have few or
no primary schools
School Enrollment Rates
for Full-Time Students, 1976
Egypt, age 6 and older
23.0
28.2
17.5
Age 6-11
64.4
73.9
54.1
Age 12-14
52.7
62.9
40.9
Age 1.5-19
36.8
45.5
27.1
Of which:
Urban governorates a
31.6
32.7
30.3
Of which:
Lower Egypt
Expansion of public primary education increased the
literacy rate from 15 percent in 1937 to 42 percent in
1976 (of those aged 10 and older), well above that in
many of Egypt's Muslim neighbors (Lebanon, Jordan,
Turkey, Kuwait, and Tunisia are the exceptions). The
literacy rate among Egyptian males, 56 percent, far
exceeds that among women, 27 percent. As a result of
the increased emphasis placed on female education
since the Revolution, however, this is changing. In
1976 in the group aged to 10 to 24 years (the children
born since the Revolution), 42 percent of the females
were literate, compared with 66 percent of the males.
Of children in the group aged 10 to 14 years, 72
percent of the males and 50 percent of the females
were literate. Despite this educational progress, the
number of illiterate males rose by 800,000 during
1961-76, while the number of illiterate females soared
by 2 million, to 9.6 million.
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The Egyptian Government clearly has given one of its
highest priorities to the expansion of secondary and
higher education, especially since the late 1960s.
School facilities have been increased enormously. All
students who are able to meet academic standards are
admitted free of charge. By 1976 half the males in the
group aged 15 to 19 years and 20 percent in the group
aged 20 to 24 years were enrolled full time in school.
These enrollment rates equal or exceed those in the
United States and West Germany. Even though the
effect of the jump in enrollments since the late 1960s
had not yet been fully felt, the number of Egyptians
holding advanced degrees was large in 1976, totaling
526,000 (406,000 males, 120,000 females). At 2.2
percent of the population aged 10 and older, the share
of Egyptians holding advanced degrees compared well
with that of some European countries. Although
excessive emphasis on liberal academic disciplines has
intensified the difficulties for Egyptian college gradu-
ates in finding jobs in recent years, this is beginning to
change
adobe buildings with two or three small, dimly lit
rooms housing five to eight persons as well as the
family's livestock. These houses are closely packed in
congested villages to limit the sacrifice of cultivable
land. While crude, they well suit the needs of their
Jellahin owners, who tend to prefer them to modern
rural bungalows
While neglecting housing construction, the govern-
ment has made efforts during the past 20 years,
especially in urban areas, to provide potable water
and electricity. In 1976, 61 percent of urban dwellings
had inside piped water, compared with only 4 percent
of rural dwellings. Some 36 percent of rural dwellings
had no access to piped water at all, either inside the
dwelling or nearby, compared with 12 percent of
urban dwellings. At the same time, 77 percent of
urban dwellings were equipped with electricity, com-
pared with 19 percent of rural dwellings.
Income Distribution. The government's socioeconom-
ic programs, together with the expropriation of most
private business and large agricultural landholdings in
the late 1950s and early 1960s, contributed both to a
substantial improvement in the well-being of the
urban population generally and, until the mid-1970s,
to the replacement of Turko-Egyptian landowners and
private businessmen by a new Egyptian elite com-
posed of the upper levels of the government bureauc-
racy, the military, and government enterprises. More-
over, the expansion of higher education increased the
opportunities for the able and ambitious to join its
ranks. At the same time, the Jellahin also received
new benefits, such as the redistribution of most of the
expropriated agricultural land to landless farmers,
reduced farm rents, and increased wages for farm
laborers. These benefits placed a floor under rural
incomes and helped to obscure the fact that agricul-
ture was in effect being heavily taxed to provide low-
The combined effect of the school enrollment and
employment drives has been to hold below 10 percent
the proportion of urban males aged 10 and older who
are neither in school nor in the labor force-both
nationally and within each governorate. This propor-
tion is strikingly low by the standards of LDCs
(especially Muslim countries) and comparable with
the proportions in the industrial nations.
Housing. Although rent controls keep urban housing
costs very low, Egyptians are poorly housed. Perhaps
in no other area of meeting the needs of the urban
population has Egypt fallen farther behind than in
providing modern housing. During 1961-73 only
about 400,000 new urban dwelling units were con-
structed-at a time when the urban population was
increasing by 400,000 persons, or some 80,000 fam-
ilies annually. Despite the construction of new urban
luxury housing during the current boom, we estimate
the increase in the backlog of unmet urban needs at
800,000 to 1 million dwelling units since 1960
Rural housing does not appear to constitute a prob-
lem. Rural dwellings, essentially unchanged from
Roman times, typically are easily built, reed-roofed
cost food for the urban population.
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As a result of the very substantial gains from acceler-
ated economic growth since 1974, most of the urban
populace-although not nearly as well housed-is
now much better fed and clothed than on the eve of
the 1967 war.15 But with Sadat's broad encourage-
ment of the private sector, private businessmen 16 and
their employees (together with the recipients of work-
er remittances) are capturing the greatest share of the
benefits. Many urbanites fear that the government
will again try to terminate the subsidies and greatly
" Annual gains in real personal consumption per capita, which
averaged 1.3 percent in 1966-74, soared to 7 percent in 1975-77
and probably continued close to this rate through 1980
16 Mostly in real estate, finance, business services hotels an other
tourist facilities, construction, and trade
increase prices." Middle class employees in public
administration, the military, and government enter-
prises--including the previous elite-are unhappy be-
cause their wage increases are limited roughly to the
rise in the official cost of living index which, heavily
influenced by controlled prices, substantially under-
states the true cost of living for all but the lowest
income groups
" In January 1977 the government announced without warning that
because of cuts in subsidies the prices of such staples as bread,
flour, tea, sugar, butane, and gasoline would double. The result was
a spontaneous explosion of discontent by the urban masses that
shook the Sadat government, with fierce rioting that spread from
Cairo and Alexandria to numerous other cities, forcing Sadat to
order the Army into the streets and suspend the price increases. At
least 50 people were killed and more than 700 injured. A threatened
repetition in August 1980, when rumors spread of another attempt
to raise prices, was averted only by swift government action to deny
25
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Appendix B
Methodological Notes
Projecting Labor Supply Our projected labor participation rates are based on the job market conditions we
consider most likely over the next five to eight years; beyond that, they are
increasingly conjectural. Even in the near term, they could change significantly if
job market conditions differ substantially from what we expect. For example, if
economic growth and job creation were sufficiently rapid to produce excess
demand for labor, we would expect participation rates, especially for women, to
rise to close the gap. The effect on female participation would be magnified if
strong economic growth were accompanied by heavy external migration of male
workers. Since the size of the labor force is highly sensitive to changes in
participation rates, only comparatively small changes would be required to effect
adjustments. For example, a 2-percentage-point increase in the 1985 participation
rate for the 20 and older age group would add almost a half million workers to the
labor force
Projecting Labor To evaluate job market conditions in the years ahead, we have examined three al-
Demand ternative economic growth scenarios-high, low, and intermediate-covering (a)
the next five years, and (b) the final 15 years of this century. In each instance we
have varied the rates of growth of output and employment for industry and other
nonagricultural sectors to take account of historical differences in rates of increase
in output and in labor productivity growth at alternative GDP growth rates.
Demand for labor in each sector is associated with a specific level of labor
productivity. Labor demand is derived by dividing output by average labor
product; that is, L=O/P where L equals employed workers, 0 equals value added
(in 1975 Egyptian pounds), and P equals average labor product 25
Our projections are based on the historical relations prevailing during 1961-80.
During this period, when economic growth was led by services, each 1-percentage-
point gain in real GDP generated a rise in total employment of about one-fourth of
a percentage point. Put another way, each 1-percentage-point increase in employ-
ment required a 4-percent rise in real GDP. Accompanying these gains were
average annual improvements in productivity of about 2 percent in agriculture, 2.5
percent in industry, and 5 percent in other nonagricultural sectors-transportation
and communications, trade and finance, and services. Largely because of changing
government job-creation and military mobilization policies, these relationships did
not remain stable throughout the period: when growth of industrial output slowed,
productivity gains dro r)ed far more n job creation, while the reverse held for
the two other sectors. 25
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The ratio of the increase in employment to the rise in real GDP in Egypt during
1961-80 is unusually low by LDC standards. This mainly reflects deficiencies in
deflating Egyptian national accounts-particularly the output of services-that
cause an overstatement of real economic growth which shows up as exaggerated
gains in productivity. In our projections we assume no change in inflation rates or
in present methods for deflation of Egyptian national accounts. If, in fact, inflation
drops or deflation methods are improved during the next five to 10 years, the job-
creating capabilities of a given observed real growth rate could be somewhat
increased.
In making our projections, we adjusted the historical relations between employ-
ment and productivity growth for agriculture and other nonagriculture to conform
to the more usual experience that reduced capital accumulations will permit some
employment growth to take place in these sectors even at fairly low growth rates.
One effect of these adjustments is to boost the rise in total employment by about
0.3 percentage points for each 1-percentage-point gain in real GDP at the 6-
percent growth level
Projecting Our projection of literacy rates for the population aged 10 and older through the
Educational Levels year 2000, based on 1976 census data on literacy rates for each age group, is ob-
tained by a method analogous to the use of labor force participation rates to
project the size of the labor force. In 1976 literacy rates for the 10- to 14-year age
group correspond very closely to school enrollment rates for the 5- to 9-year age
group; our projection assumes that this relationship will hold throughout the 20-
year period. Our projection of educational attainment levels for males in the labor
force aged 15 and older, based on 1976 census data on educational attainment
rates for each age group in the labor force, is obtained by essentially the same
method as for literacy rates. We project the increase in educational attainment
levels for females in the labor force at one-half the increase for males.
Projecting Urbanization In projecting the size of the urban population, we assume (a) that 1976 urban-rural
differentials in dependency ratios and in labor force participation and unemploy-
ment rates will remain unchanged throughout the 20-year period and (b) that the
proportion of nonagricultural jobs held by residents of rural areas will remain as it
was in 1976, namely 18.5 percent. Thus, while nonagricultural employment is the
most important single factor, urbanization is in fact driven by multiple factors in
our projection
This report is based heavily on data contained in the detailed 1976 Egyptian
census, as adjusted by the Foreign Demographic Data Division of the US Bureau
of the Census to correct for the undercounting of certain (mostly young) age
groups. A major effect of the adjustment is to raise the total by 3.8 percent, from
36.6 million as reported by the Egyptian census to 38.0 million. The 1980
population statistics used here are those projected by the Census Bureau from
1976, adjusted by us to reflect the estimated outflow of Egyptian workers and their
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dependents to other Arab countries since 1976. Because the population totals from
Egyptian censuses prior to 1976 shown here would not otherwise be comparable
with our adjusted 1976 figures, we have adjusted them upward by 3.8 percent as
well; it is anyway not unlikely that the previous censuses also failed to count all
citizens. Throughout the report, we have applied the population adjustments
uniformly to all of the country's geographic and administrative subdivisions.
The census data have been supplemented by reference to the relatively small but
growing unclassified literature on current (since 1970) issues in Egyptian demogra-
phy, economics, sociology, and politics. None of this literature draws on the results
of the 1976 census. The following bibliography lists the key unclassified sources
used in the preparation of this report.
Statistical Sources Egypt: Central Agency for Public Mobilization and Statistics (CAPMAS),
1976 Population and Housing Census-Population Census, Detailed Results for
the Republic's Total. (Only Volume One was used; subsequent volumes became
available too late to be used.)
World Bank, World Tables (1980). Contains one of the few consistent series
available on Egypt's deflated national accounts (1950-77).
Analytical and Ahmad, Yusuf J., Absorptive Capacity of the Egyptian Economy (OECD, 1976).
Background Sources
A review of Egyptian economic trends and prospects with a discussion of some of
their socioeconomic implications.
Barbour, K. M., The Growth, Location, and Structure of Industry in Egypt
(Praeger, 1972). Analysis of industrial location and probable future growth poles in
Egypt.
Birks, J. S. and Sinclair, C. A., International Migration and Development in the
Arab Region (International Labor Office, 1980). The standard work on the
subject: covers Egyptian emigration through 1975.
Ikram, Khalid, Egypt: Economic Management in a Period of Transition (The
Johns Hopkins University Press, 1980). Report of a mission sent to Egypt by the
World Bank. By far the most comprehensive and up-to-date analysis of Egypt's
economic problems.
Kerr, Malcom, "Egypt's Future in the Shadow of the Gulf Some Scenarios"
(mimeographed, December 1980). Paper presented at the 1980 annual meeting of
the Middle East Studies Association. Presents a number of scenarios for Egyptian
political, social, and economic evolution through the end of the century.
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Khalifa, Atef M., The Population of Egypt (Cairo: Institute of Statistical Studies
and Research, 1973). Comprehensive roundup and analysis of background demo-
graphic and other pre-1976 Egyptian census data.
Omram, Abdel R. (ed), Egypt: Population Problems and Prospects (University of
North Carolina at Chapel Hill, 1973). The standard work on Egypt's demogra-
phics prior to the recent fertility shift.
Reassessment of the Prospects for Fertility Decline in Egypt: Is Development a
Prerequisite?, (University of North Carolina at Chapel Hill, June 1980). A partial
update of the author's 1973 publication.
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 Urban Center Population
(thousands)
Population
(by size of urban center)
Total urban population
(thousands)..,....,... 24,850
Percent of yearly total........ F. 13
Cities and towns
20,000 to 99,999
Cities 100,000 and over
(except Cairo)
Metropolitan Cairo
(include. At f-6, Imbibah,
ahubri at KhaYmah, and
eercral ?meller cc minitiasl
AI Ma' llah
al Kubra
K86 ad Damanher Al Manborah
Dawwar
'Cairo mebcpolltan area
Includes Al J'vah, Imbibah.
Shubra al Kheymah, and
' aeNrel ?maller communities.
Aswan
0 50 too statute Miles
Source; Cairo, 'Preliminary 1976 Census Aeeulta" (CAPMAS).
Other. UN Dem-irz nic Yearbook, fate.
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