268 Michael BoMMes, siMon FellMer and Friederike ZigMann
- Expenditure on research and development also remains at a very low
level: 0.21 per cent of GDP in 2009 (The World Bank Database).
The Egyptian state formally guarantees social security through three
main measures: f irst, subventions for staple foods – especially bread, sugar
and cooking oil; second, the theoretical coverage of all Egyptians in the
social-security system (though, in fact, only about half the population is
covered and only a sixth of the workers receives unemployment benef its);
third, state pensions for needy families and the elderly. The social systems
in place, however, are extremely complex and confusing in nature and
factually do not reach large parts of the population – as well as being chroni-
cally underf inanced. They do not truly protect from poverty resulting from
unemployment, and they generally favour the well-to-do. A fundamental
restructuring of the system in the near future is not regarded as imminent
because of the overall f inancial situation of the country (Loewe 2004; Lof-
fredo 2004) and the necessary restructuring of the country in political and
economic terms. A precondition for it would be, f irstly, a stable domestic
situation.
9.4.2 Three scenarios on the development of migration potential in
Egypt
Economic growth without structural reform on the job market and in the
education system (scenario 1)
This scenario assumes the continuation of the current economic reforms
aiming to improve the overall economic situation and the legal stability
in the country, and to restrict government regulation. These reforms will
increase foreign direct investments in industry and services. Parallel to
this development, the inf low of foreign currency will rise through tour-
ism. This will absorb some of the rising costs associated with an increased
importation of foodstuffs following a structural crisis in the agricultural
sector. Oil production has also been on the decline since 2008 (oil rents as
percentage of GDP have fallen from 11.1 per cent in 2008 to 6.3 per cent in
2010) as the reserves dwindle, making higher oil imports also necessary.
These, in turn, can be compensated for by increasing gas production and
export through the exploitation of new gas f ields and the building of new
pipelines, as agreed with the states interested in these resources. Thus,
overall, GDP and GNI rise markedly.
However, this rise does not lead to an increase in the number of people
employed; rather, the positive economic conditions increase productivity
through rationalisation, leading to a reduction in formal employment.