Has the Covid-19 outbreak been a blessing in disguise for the social contract for micro, small and medium-sized enterprises in Kuwait? This column argues that the double crisis of the pandemic and low oil prices provides an opportunity to adopt the reforms that are necessary to make the country’s economy more dynamic, in particular encouraging innovation and job creation in the small business sector.
Since the majority of Egypt’s labour force is in the informal sector, where three quarters of workers earn less than the minimum wage, the recent increase will not benefit them. Indeed, as research reported in this column shows, it will lead to a rise in inequality. A better policy option would be to implement self-targeted public works programmes similar to those supported by India’s National Rural Employment Guarantee Act, which push up the informal sector’s ‘effective’ minimum wage, thereby reducing both wage inequality and some of the precarious nature of informal jobs.
What have been the economic and political underpinnings of Egypt’s transition between social contract models? This column explores possible pathways to a new, more equitable and sustainable social contract, and the challenges such a contract would face. It examines the power structure in Egypt’s current ‘unsocial contract’ and whether it is possible to make the transition to a different but better social contract.