New educational policies should be perused in post-revolution Egypt, experts concur, Nesma Nowar reports Despite having witnessed high growth rates in the past couple of years, serious challenges remain in Egypt, most notably the high unemployment rate, which reached 12 per cent in the first quarter of 2011. There is also a significant mismatch between the education outcome and the labour market demand, leaving 84 per cent of the unemployed in the age group of 15-29 years. High unemployment and wage disparities were the catalyst which led to the 25 January Revolution. In an attempt to analyse the problem, Omnia Helmi, deputy director of research at the Egyptian Centre for Economic Studies (ECES), attributed these challenges to what she called "employment polarisation". This means that employment and wages became more polarised between high and low-skilled occupations, with the proportion of middle-skilled occupations declining. In a seminar held by the ECES recently, Helmi showed that between 2000 and 2009, the share of middle-skilled occupations in employment has been declining by 5.2 per cent, and by 9.3 per cent in the real wage bill. Helmi pointed out that such polarisation has resulted in deindustrialisation, which is occupied by the middle skills, lowering the share of the manufacturing sector in both the total employment and the real wage bill, leading to the erosion of the middle class. Polarisation has also pulled the average real wage upwards, by high earnings of few occupations, indicating wage inequality. This is evident in an increase in the share of the financial and insurance activities, which demand high-skilled workers, in the average real wage by 169 per cent, as well as an increase in the share of transportation and storage activities, which demands low-skilled workers, by 89 per cent over the last decade. The more alarming fact, Helmi said, is that the low-skilled workers are getting more than the middle-skilled and they are only 62 per cent lower than the high- skilled. This, she said, discourages investing in human capital. Helmi further highlighted that despite the high share of the private sector in the economic activity, it depresses real wages because the private sector mainly hires low-skilled labour. In order to avoid such inefficiency in Egypt's labour market, Helmi said that upgrading labour skills through better education and training is a must to enhance productivity and avoid wide wage disparities. On a similar note, Magda Kandil, executive director of the ECES, stated that the country's education system has become inefficient and that there is a lack of public spending on education. The state is only spending four per cent of the GDP on education, whereas most of the public spending goes to secondary and higher education on the expense of primary education. She pointed out that by this situation, the government creates two problems. The first is spending on an education process with a little return, and the second is graduating a workforce that is inappropriate for the labour market. Kandil stated that it is high time for the government to set defined goals for education and to think about decentralisation in the education process. She explained that education is not a one size fits all; however the government should prioritise education according to geographical territories which are in need for more spending on education. According to Kandil, spending resources without specifying goals would lead to the same weak return. The problem of inefficient spending on the educational process was highlighted in Malak Reda's, ECES economist, study which showed that there is an unbalanced expenditure on the educational process. She said that technical and general secondary education are getting almost the same share of expenditure. This affects the quality of technical educational outcomes negatively and leads to low educational return for a large segment. She further stated that 70 per cent of total spending on higher education is directed towards salaries and wages crowding out resources which are needed to upgrade capabilities and curricula. The result is a low quality education which is confirmed by having only one university in the last 50 of the top 500 universities worldwide, which is Cairo University, as well as high unemployment rate among the educated. The study further showed that Egypt performs poorly in terms of quality of primary education which in turn affects labour productivity negatively and leads to unequal educational outcomes. Moreover, the country also suffers from a poor higher education system which reflects on Egypt's youth, the country's greatest asset. The deteriorating education system, according to Reda, affects Egypt's labour, innovation and macroeconomic stability negatively, dragging the country's competitiveness. Egypt ranks 81 out of 139 countries in the global competitiveness index (GCI). Major education reforms should be carried out, noted Reda, such as increasing the public spending on education, applying quality assurance in all universities and increasing the quality of vocational training.
