Economic Research Forum (ERF)

The Covid-19 pandemic and Egyptian migrant workers

1586
How is the global pandemic affecting the many migrants from Egypt working in Europe, the Gulf and other Arab countries? This column looks at the challenges they are facing as well as their families back home, who are often highly dependent on remittances.

In a nutshell

The immediate impact of the pandemic on Egyptian migration and remittances depends on the destination countries; in the next phase – of co-existence with the virus – more variables will change, constantly affecting migration and remittances.

The crisis has highlighted the crucial role of migrant workers in supporting European economies; but many are forced to continue working regardless of the risk of exposure to the virus.

The situation of migrants in the GCC countries varies according to their working conditions and level of skills: those in jobs characterised by harsh working and living conditions are most at risk of infection.

Covid-19 is one of the greatest shocks of recent times, affecting the world economy on many levels. The focus on shocks to the macroeconomy, as well as to wages and the informal economy, has overshadowed something else greatly affected by the pandemic, namely international migration and remittances. (Effects of the pandemic on the internal migration of Egyptians and on asylum-seekers within Egypt will be discussed in future columns.)

International migration

Direct and indirect effects of Covid-19 on Egyptian international migrants depend on the destination of emigrants. Egyptian emigrants are highly concentrated in Europe as well as the GCC (Gulf Cooperation Council) countries and other Arab countries, mainly Jordan.

In Europe, approximately 900,000 Egyptian migrants are mainly concentrated in France, Germany, Italy and the UK. In the Gulf and other Arab countries, approximately 5.5 million Egyptian migrants are concentrated in Jordan, Saudi Arabia and the United Arab Emirates (UAE).

International migrants in Europe

In Europe, migrant workers are mainly in jobs that are most hit by the Covid-19 crisis, including agriculture, domestic and care work, the food industry, construction, tourism and transport. Many of these sectors need to continue operating to ensure the survival of the population. This has highlighted the crucial role of migrant workers in supporting European economies.

Migrant workers, especially undocumented migrants, are the least protected workers in Europe. Problems include employment conditions, access to healthcare, unemployment or social benefits, public healthcare, housing and, on top of all that, their residency and work permits.

Employed in crucial sectors, migrants in Europe are forced to continue working regardless of the risk of exposure to the virus. Their residency and survival, especially undocumented migrants, depend only on their jobs. Losing their jobs means losing their only source of income, and with limited or no access to any social benefits, they are also risking their survival.

Therefore, there is no choice for them but to keep working, risking their health and that of those around them. The high cost of medical services (and the fear of sharing data about their undocumented status with governments) delay migrants from seeking help in case they get infected. At the same time, given the sectors in which they are most concentrated, workloads have increased and social distancing is not applied, exacerbating the health issues.

During the next phase of the crisis in Europe – which some call co-existence with the virus – issues related to social distancing and hygiene need to be enforced among everyone to minimise any further risks. Realising the role of the migrant workers in Europe, and their contribution to the limited functioning of the economy, together with the enforced measures in the co-existence phase, this could improve the situation of migrants in Europe.

In this context, residency and work permits become the main concern for migrant workers. Those who remained in their destination countries have been given an extension to the renewal of residency or work permits, given the closure of government offices. Those who returned to their countries of origin right before the lockdown are risking expiry of their residency and work permits prior to returning to their destination countries and potentially losing their jobs.

Last but not least, European governments, international institutions, NGOs and labour unions are highly concerned with the situation of migrants in Europe. They work on providing them with information and guidance. For those who lost their jobs, they try to provide them with some form of assistance to be able to live through the crisis. The communities where they live and their vulnerability is not only risking their own health, but in the next phase of coexistence is risking a second wave of infections if hygiene measures and social distancing are not implemented properly.

International migrants in GCC and Arab countries

The situation of migrants in the GCC countries varies according to their working conditions and level of skills. Those in jobs characterised by harsh working and living conditions are most at risk of infection. These overlooked conditions are now creating the most risk of spread of the disease among migrant workers’ communities, which could lead to it spreading across countries. This is especially concerning given that infections in the GCC countries are mainly among migrants and foreign workers.

At the same time, indirectly, through the effect of the lockdowns on the slowdown of business activities, demand for energy has slowed, pushing down oil prices. As oil is the main source of government revenues, the expected slowdown is expected to affect demand for workers in economic sectors other than the oil and gas sectors.

Layoffs and wage cuts are the immediate impact of the slowdown. This is not affecting new flows of international migrant workers, but the stocks are also expected to fall. In 2018 and 2019, new work permits for Egyptian emigrants were mainly issued by Saudi Arabia, Kuwait, Jordan, the UAE and Qatar. Those in Saudi Arabia alone formed roughly 48% of total new work permits issues in 2018, with the other four countries together forming around 45% of the total new work permits issued in 2018.

The slowdown in demand for workers – directly in the oil and gas sectors and indirectly in other economic sectors – is expected to lead to a slowdown in new numbers of migrants and even lead to the return of some migrants.

Migrant remittances

This economic slowdown is not only expected to affect the number of migrants, but also the economic impact of these changes in migration patterns. Remittances to Egypt were worth approximately $30 billion in 2019, the highest in Egypt’s history. Over 75% of these remittances originated from Saudi Arabia (39% on its own), Kuwait, the UAE, Jordan and Qatar.

The expected economic slowdown from falling oil revenues, which in turn result from the global economic slowdown driven by the lockdown and the spread of Covid-19, will negatively affect the size of remittances flowing to Egypt.

Remittances are the major source of foreign currency for the Egyptian economy, along with revenues from tourism and the Suez Canal (two major sources of revenues that are also seeing a severe drop). The lockdowns, border closures and general fear have stopped tourism altogether; and Suez Canal revenues have dropped significantly with the slowdown in trade, production and global demand.

Since remittances are used directly by recipient households, the drop is likely to affect their consumption patterns significantly. It could push some households, who are highly dependent on remittances, towards poverty.

In conclusion, the immediate impact of the Covid-19 virus on Egyptian migration and remittances depends on the area of destination. With the phase of co-existence with the virus, more variables will change constantly affecting migration and remittances.

Tags: , , ,

Most read

EU climate policy: potential effects on the exports of Arab countries

The carbon border adjustment mechanism aims to ensure that Europe’s green objectives are not undermined by the relocation of production to parts of the world with less ambitious climate policies – but it could impose substantial costs on developing countries that export to the European Union. This column examines the potential impact on exporters in the Arab world – and outlines possible policy responses that could mitigate the economic damage.

Financial development, corruption and informality in MENA

Reducing the extent of informality in the Middle East and North Africa would help to promote economic growth. This column reports evidence on how corruption and financial development influence the size of the informal economy in countries across the region. The efficiency of the financial sector in MENA economies reduces the corruption incentive for firms to seek to join and stay in the formal sector.

Green hydrogen production and exports: could MENA countries lead the way?

The Arab region stands at the threshold of a transformative opportunity to become a global leader in green hydrogen production and exports. But as this column explains, achieving this potential will require substantial investments, robust policy frameworks and a commitment to technological innovation.

Climate change threats and how the Arab countries should respond

The Arab region is highly vulnerable to extreme events caused by climate change. This column outlines the threats and explores what can be done to ward off disaster, not least moving away from the extraction of fossil fuels and taking advantage of the opportunities in renewable energy generation. This would both mitigate the potential for further environmental damage and act as a catalyst for more and better jobs, higher incomes and improved social outcomes.

Freedom: the missing piece in analysis of multidimensional wellbeing

Political philosophy has long emphasised the importance of freedom in shaping a meaningful life, yet it is consistently overlooked in assessments of human wellbeing across multiple dimensions. This column focuses on the freedom to express opinions, noting that it is shaped by both formal laws and informal social dynamics, fluctuating with the changing cultural context, particularly in the age of social media. Data on public opinion in Arab countries over the past decade are revealing about how this key freedom is perceived.

Child stunting in Tunisia: an alarming rise

Child stunting in Tunisia seemed to have fallen significantly over the past two decades. But as this column reports, new analysis indicates that the positive trend has now gone dramatically into reverse. Indeed, the evidence is unequivocal: the nutritional health of the country’s youngest citizens is rapidly deteriorating and requires immediate and decisive action.

Exchange rate undervaluation: the impact on participation in world trade

Can currency undervaluation influence participation in world trade through global value chains (GVC)? This column reports new evidence on the positive impact of an undervalued real exchange rate on the involvement of a country’s firms in GVCs. Undervaluation acts as an economy-wide industrial policy, supporting the competitiveness of national exports in foreign markets vis-à-vis those of other countries.

New horizons for economic transformation in the GCC countries

The countries of the Gulf Cooperation Council (GCC) have historically relied on hydrocarbons for economic growth. As this column explains ahead of a high-level ERF policy seminar in Dubai, emerging technologies like artificial intelligence, blockchain and robotics – what some call the fourth industrial revolution – present a unique opportunity for the region to reduce its dependence on oil and make the transition to a knowledge-based economy.

Shifting public trust in governments across the Arab world

The Arab Spring, which began over a decade ago, was driven by popular distrust in governments of the region. The column reports on how public trust has shifted since then, drawing on survey data collected soon after the uprising and ten years later. The findings reveal a dynamic and often fragile landscape of trust in Arab governments from the early 2010s to the early 2020s. Growing distrust across many countries should raise concerns about future political and social instability.

Corruption in Iran: the role of oil rents

How do fluctuations in oil rents influence levels of corruption in Iran? This column reports the findings of new research, which examines the impact of increases in the country’s oil revenues on corruption, including the mechanisms through which the effects occur – higher inflation, greater public spending on the military and the weakness of democratic institutions.




LinkedIn