In Depth: The Egyptian Labor Emergency Fund

CAIRO – 2 May 2017: In a ceremony held by the Egyptian Trade Union Federation (ETUF) to celebrate International Workers' Day, President Abdel Fatah al-Sisi ordered the allocation of 100 million EGP from the Long Live Egypt Fund to the Labor Emergency Fund. Egypt Today will shed light on this fund and its role.

What is the Labor Emergency Fund?
It‘s a state-run fund founded in 2002 and affiliated with the Ministry of Manpower.

What is the role of this fund?
The Labor Emergency Fund provides financial aid to Egyptian workers whose companies either ended their activities in the local market or stopped paying salaries and wages to employees.

What is the mechanism of the fund?
In accordance with its regulating law, the emergency fund is entitled to use its general policy to aid companies facing the risk of closure and overcome the expected decline in production capacity due to any economic crisis experienced by those companies.

What are the financial resources of the fund?
The fund receives 1 percent of the salaries of Egyptian employees working in public and private sectors, in addition to donations and grants from local and international institutions in accordance with the executive regulations of the fund.

Who manages the fund?
The Egyptian prime minister has the authority to form the fund’s board of directors, which includes the head of the Ministry of Manpower and Immigration as chairperson as well as representatives of labor organizations and the Trade Union Federation.

What is the amount of financial aid offered by the fund?
In 2016, the Labor Emergency Fund offered about 79 million EGP in aid to about 63,000 employees working in 455 struggling companies. The tourism sector has the largest share of aid, up to 36 million EGP allocated to about 47,000 employees.

Egypt’s economy has been battling a number of structural problems since January 25, 2011, mainly low growth rates and a large deficit. The country’s external debt reached $60 billion in the first quarter of 2016/2017. As part of the recently-launched economic reform measures, the government exerts large efforts to ease the impact of the economic crisis on low-income and middle-class citizens.