Egyptians abroad are the best alternative to the IMF loan

During a visit to Jordan, the Egyptian ambassador invited me to attend a symposium at the Egyptian Cultural Center. After the symposium, one of the workers pulled me aside to ask me in the Egyptian dialect to ask the Egyptian authorities to send strong teams to play in the Kingdom because they send weak sports teams that their Jordanian counterparts win, which makes him and his colleagues an object of sarcasm. By the Jordanians working with him!

This man taught me that not all of the demands of employment abroad are financial or private, and that is why I recently understood the complaint of many of them about the poor treatment at airports and ports upon their return, and that the maximum amount of gifts accompanying them was set at 10,000 Egyptian pounds, or about $500, which is not enough. To buy gifts with the high prices of phones, games, electronic devices and clothes.

Labor transfers differ in their nature from other resources. When we say that the proceeds of oil and natural gas exports last year amounted to 13 billion dollars, half of that value is obtained by foreign companies according to the agreements, and with non-oil exports reaching 23.5 billion, 60% of them are imported components.

According to the data of the Central Bank of Egypt, the value of labor remittances abroad last year was 31.3 billion dollars, representing 24% of the total resources amounting to 139 billion dollars. And more than 3 times the tourism income, and about 5 times the income of the Suez Canal.

Returning to the data of foreign exchange resources, for the past thirty years, labor remittances occupied the first place in resources in most years of the nineties of the last century, and sometimes in second place after tourism, and in the first decade of the new millennium their position declined until, during some years, it reached the fifth place, after non-oil commodity exports. and petroleum exports, tourism, and foreign direct investment.

Labor transfers are greater than official data

From 2012 until last year, labor remittances returned to occupy the first place, except for the years 2015 and 2016 when they were outperformed by external loans.

It is important to point out that the real numbers of Egyptian remittances abroad are higher than the published data about them, some even estimated that at 4 times the official number, as many of them return to send them with their friends and acquaintances or accompany them upon their return, and the high cost of remittances in banks contributes to this, which sometimes reaches Up to 7% of the transfer value.

This is in addition to the gifts they send with their acquaintances or carry them with them, in addition to the time of the repeated currency shortage crises since the sixties of the last century, intermediaries purchase foreign currencies from them to finance commodity imports into Egypt, which has continued to happen until 2016 and this year.

Most importantly, labor transfers are different in nature from other resources. When we say that the proceeds of oil and natural gas exports last year amounted to $13 billion, half of that value is obtained by foreign companies according to agreements, and with non-oil exports reaching $23.5 billion, 60% Including imported components.

With tourism revenues reaching 9 billion dollars, there are foreign companies that get a share of it, and with foreign direct investment, foreigners get their profits that they transfer abroad, so that part of the Suez Canal income is included in continuous dredging operations of the canal course and guidance services, except for transfers that do not cost the country Nothing even the cost of sending it is paid by those.

And if the International Monetary Fund’s loans since 2016 until now have amounted to $23.3 billion over 6 years, the lowest number of labor transfers since 2017 was 22 billion, while the allocations of the Ministry of Immigration and Egyptians Abroad Affairs in the budget for the fiscal year 2021/2022 amounted to about 53 million pounds. The equivalent of $3.4 million at the exchange rate at the time.

Customs, taxes and fees other than remittances

It should not be considered that the state’s benefit is limited to cash and in-kind transfers, as workers abroad pay customs on the goods they carry during their return and a value-added tax on those goods. They also pay fees for services they receive from Egyptian consulates abroad, the value of their purchases from the free market and payments Telecommunication services, insurance and dealing with Egyptian airlines.

The budget resources are also rich in many taxes and fees that they pay, the value of which is close to tens of billions of pounds. In the current fiscal year 2022/2023 budget, we mention about 4.6 billion pounds in fees for consular procedures, and two billion pounds in development fees on mobile devices and accessories.

There is a social solidarity tax of 608 million pounds for travel tickets, in addition to 537 million development fees for travel tickets, 400 million development fees for passports, in addition to 279 million fees on passports, 285 million fees for work permits abroad, and 36 million development fees for purchases in duty free.

All this means the great importance and necessity to deal seriously with the file of Egyptian labor abroad, if the government is willing to alleviate the problem of repeated currency shortages over decades. I have mentioned that their number is between 10 and 14 million citizens.

Perhaps the experience of South Korea is useful, as it used to send low- and medium-skilled workers to the Arab Gulf states in the eighties to work in the field of real estate and infrastructure, and now it sends advisers to the governments of those countries with scientific and practical specializations.

Before that, the need to support Egyptian workers, most of whom work in the Gulf countries, whose contracts are not sustainable for a long time, and to treat the problem of the high cost of remittances, and to treat them well when dealing with government agencies during their vacations. "In our country they treat us as expats and there they treat us as expats."

Therefore, the prisoner in exile must find the hand of the state next to him, as well as those who complain about a malicious report from his sponsor of his escape, and those who were unable to pay the rent of his housing, and provide improvement, even partially, to the accommodation.

The Nubian and Sudanese experience of caring for expatriates

There are many successful models of solidarity that must be encouraged, such as the Nubian experience that establishes associations in foreign countries, in which they receive people from Egypt and take care of their residency expenses until they find work. By their peers abroad without prior knowledge just because he is Sudanese.

We must admit that there is a crisis of confidence, the causes of which have accumulated over the years, and it takes time to treat it and take measures to build that confidence. He got it not much, he told them I have entered into a partner with many before, and this is the first time that I enter a partner and get the origin of what I paid, let alone give me a profit.

A study by the Egyptian Center for Economic Studies indicated that 43% of remittances are used for spending on the family, 16% for education, 12% for health, 10% for saving and 4% for real estate investment. Therefore, the Egyptian government should benefit from the experience of both India and Mexico, to combine Consumer spending and investment spending for remittances.

This is so that some of them are directed to development by involving them in the establishment of companies through shares, and here the difference between foreign investment that transfers its profits outside the country, and the investment of expatriates whose profits will remain inside.

And before that - and to restore confidence - it is necessary to facilitate the way for them to purchase government debt instruments with a high return, as an alternative to the current deposit in banks, which brings them negative returns, as a result of the high rate of inflation from the rate of return they receive, and here we will also find the difference between foreigners who buy bills and bonds. The Egyptian treasury and then transfer their profits abroad, as has been repeated several times in recent years, and between the Egyptians who will keep the proceeds inside the country.

The official authorities must be aware that - with the reliance on national labor in the Gulf countries - the employment opportunities for Egyptian labor will not continue in the same number in the future, in addition to the risks of fluctuations in oil prices and their impact on remittances, which is what pushes stronger to employ a greater part of remittances in activities. development, in order to achieve longer sustainability and continuous returns for them.

Thus, with more care, remittances from Egyptians abroad can be increased by more than what the International Monetary Fund will provide, and they (i.e. remittances from citizens) are resources without preconditions and do not require a reduction in subsidies or the value of the pound, and more selling of assets and imposing taxes and fees as requested by the International Fund.