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Vocational training essential for Egypt in face of global competition
By Sherine El Madany First Published: June 28, 2007
CAIRO: Egypt’s workforce may soon place a firm foothold on the global map by turning products marked with the “Made in Egypt” label into strong selling points. This is the objective of an EU-funded project aims to train and expose the country’s labor to new means by which to upgrade their skills and production lines.
The Technical and Vocational Education and Training (TVET) project aims to enhance competitiveness of Egyptian enterprises on both the domestic and international markets through improving quality of vocational training, as well as quality and structure of Egypt’s labor force.
“Vocational training and skilled labor force form the backbone of the economy,” said Klaus Ebermann, ambassador of the Delegation of the European Commission in Egypt. “Vocational training is important for economic development, sustainability, growth, and investment in Egypt. With a well-trained and skilled labor force, Egyptian industries will be able to face global competition.”
Launched in July 2005, the project proved a great success in developing skills of workers in the textiles and ready-made garment sector and helping them qualify for better career opportunities.
Building on its initial success, the project extended its reach and launched its second phase on Tuesday to include four new sectors, namely engineering, food processing, wood and furniture, as well as building and construction materials. Expected to run for a total of six years, the project comes to a total budget of 66 million euros, equally divided between the EU and the Egyptian government.
“Through this program, we are sharing costs and benefits. Egypt benefits from skilled labor, and Europe benefits from better quality products delivered to its [gates],” Ebermann added. “Europe is Egypt’s largest export market and largest trading partner.”
A main ingredient of the project’s success lies in its strong conceivable driving force generated by business and industrial enterprises operating in Egypt, who currently lack a well-qualified labor force.
“Egypt’s main reason for unemployment lies in lack of skilled labor. There are different job opportunities available in Egypt nowadays, but the main obstacle is finding a qualified labor force to fill these positions,” said Rachid Mohamed Rachid, minister of trade.
He pointed out that each year the country’s education system produced graduates unqualified for available job opportunities, a situation that maximizes unemployment.
“Unemployment will not only be resolved by creating job opportunities, but also by creating skilled labor,” he added. “We hope that this project will transform this workforce into better qualified employees that contribute to the wellbeing of the Egyptian economy.”
With its second phase now on track, the project will create 15,000 new job opportunities. By the end of this year, the EU will be launching technical assistance programs for several other vocational training sectors, including tourism.
“Egypt and the EU enjoy extraordinary cooperation, and at the centerpiece of our experience is to train the workforce of producing sectors. These sectors are essential to the progress of the Egyptian economy, and without a trained workforce Egyptian industries will lose in the face of international competition,” Ebermann stated.
Through continuation of TVET, more progress and reforms are expected to be made in Egyptian industries, which will increase demand for Egyptian-made products and in turn increase export and trade opportunities.
“Through the project, Egyptian industries, for example the furniture industry, will produce good quality work and design and be able sell in both domestic and international markets,” he said. “For us, this program is also a key to developing small and medium-sized enterprises in Egypt.”
posted
that whats its all about and why i like egypt/sharm it has its own work force not imported from else where and the money people earn is kept within the country so they will begin to see thier own wealth from furthering themselves so good news
Posts: 1344 | From: uk/ | Registered: Mar 2006
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posted
And the money british people earn is kept in the country is it? Or is it the lure of tax free gains on rental and selling properties that makes a property/properties out in sharm so enticing. I certainly do not know of any one who tells the british tax man of his gains in Egypt - which he should, do you?
Posts: 31 | Registered: Jun 2007
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it looks like our same old posts getting deleted as for your question on taxes and money in the country allour books has to be open as for the company we formed it must by law have the tax book the taxes in egypt now has just been droped from 40 to 20%
Posts: 1344 | From: uk/ | Registered: Mar 2006
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posted
The only way to encourage buying " Made In Egypt " is to triple tax all imported products that can be produced locally. Use the revenue to build training institutes and shops to produce similar products with local materials. Also give tax credit to those companies who import Egyptian products when they export other products to us.
posted
no i dont think this is the case if you lower import taxes which now they have it will encourage spending and create inward investment which now the west isdoing textile good will do well with the new seal and soon this will encourage the west to buy your local goods its called free trading
Posts: 1344 | From: uk/ | Registered: Mar 2006
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posted
That is a valid point mac however with the unemployment rate and the status of the Egyptian economy, I think we should give priority to creating local jobs HERE *in Egypt* instead of focusing in turning the economy to consumption it should focus on production and then free trading comes next. so first things first. JOBS ..JOBS... JOBS ...
Posts: 176 | From: Proud to be Egyptian | Registered: Apr 2007
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posted
but the jobs will come with inward investment as your contry has seen from tourisum but the people must learn skills ect and thier children will learn from them it will not happen over night but people will see a big difference in time but i for one believe it willhappen for the good of all
Posts: 1344 | From: uk/ | Registered: Mar 2006
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why not other venues like but not limited to technology, Cars, housing, electronics ..etc....
the only thing I'm thinking of is if I do not have a job I will not have money to buy anything so the inward investment will not happen . Unless I do not understand what you mean by inward investment.
Posts: 176 | From: Proud to be Egyptian | Registered: Apr 2007
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posted
yes this is all true and totally agree with you thier is new treaty this year with your goverment all these are covered the west will look to your country as for cheap labour but this will lift all life styles
Posts: 1344 | From: uk/ | Registered: Mar 2006
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posted
Let's look at India, Mexico, China. and others. the mother board for a computer is put together in Mexico for $10.00 (just labor) however it will cost 5 hours for three employees a@ 14.00 PH in the USA to do the same job. Do the math does not add and Egypt has to ride the train for those who are looking for cheap labor.
Growing up we had a joke for those who we think are mentally challenged we ask them * are you Indian? * after seeing all computer programing jobs and call centres and customer service centers for major players in th USA economy. I say I wish we were Indians.
Posts: 176 | From: Proud to be Egyptian | Registered: Apr 2007
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quote:Originally posted by mac0623: ther west will throw billions at your country
I do not think the west is stupid or naive to throw billions anywhere. It is all calculated by the penny. Posts: 176 | From: Proud to be Egyptian | Registered: Apr 2007
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posted
then you dont know the west in return they will want oil rights thiswill also bring jobs
Posts: 1344 | From: uk/ | Registered: Mar 2006
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posted
well, I don't know more about Egypt, but absolutely, I know that Egypt is great country, with a long history and glorious civilization~~~~ anyway, "made in Egypt" is good, at the same time, to think a little about "made in china" if necessary. my products are laser machines and plasma machines~~
-------------------- I am a salesmanager selling laser and plasma cutting systems, you can contact me, mylaser777 at skype~ Posts: 2 | Registered: Jul 2007
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posted
Strange nobody mentioned 'quality control', customer service, professionalism and meeting delivery dates. These things do not exist in Egypt.
Posts: 77 | From: Cairo Egypt | Registered: Feb 2007
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posted
It's not any better after living here for 20 years, in some cases, I think it's gotten worse. Many Egyptians used to go to the gulf countries to work and make more money but now they really aren't wanted because they can't do a good job. More and more Pakistanians and Indians are getting the work in the UAE rather than Egyptians for just that reason. It's sad because they can do it if they were forced to.
Posts: 68 | From: Cairo | Registered: Jun 2007
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Egypt: Out With 'The Pyramids', in With Liberalisation
Inter Press Service (Johannesburg) 1 August 2007 Posted to the web 1 August 2007
Leslie-Ann Boctor Cairo
Earlier this year, a group of prominent Egyptian business leaders had gathered at a downtown Cairo hotel to discuss building a successful export industry. A presenter opened the discussion by asking for a show of hands to indicate who was wearing Egyptian-made shirts or shoes.
A small number of hands went up, which led the presenter to pointedly ask, "How can we get the world to trust us if we can't trust ourselves?"
It is a question confronting Egypt's government and business leaders who are eager to promote foreign investment in the country. Egypt is in the process of launching a long-awaited branding initiative.
Nation branding is basically the use of strategic marketing to promote a country's image and attractiveness to tourists and companies to draw foreign direct investment (FDI).
Rather than relying on the sphinx, the pyramids and cheap beach holidays to drive the country's identity, positive economic achievements should be leveraged as part of the country's image, says Ehab Nada, the branding agency Logic Enterprise's managing director for north Africa.
Egypt needs to undergo a fundamental soul searching exercise to determine its identity and its best assets, he says. "Any strategy that plays on the pyramids and monuments is not going to help the country in terms of investments and exports. It might help in terms of tourism, but not in terms of investment.
"You have to address other areas if you want to attract investors, privatize a massive public sector, export your local products and become a big player on international markets. We have to figure out what we are capable of delivering on, so we can go boldly to the world and say, this is who we are, this is what we are good at."
The possibilities could include agriculture, textiles, mining, human capital and of course, the country's vast cultural assets. Nada says the country could even go in a new direction and develop itself as a strategic knowledge or financial hub in the region.
But strategists caution that if Egypt's branding exercise is to be successful in ultimately generating long-term FDI, that gnarly question of trust has to be ironed out - from the inside out.
Now beginning his third year, Egypt's Prime Minister Ahmed Nazif, a Canadian-educated engineer, has pulled off a mini-brand strategy himself with his trademark slogan "Egypt is open for business".
It was the sign-off he used when he visited the US's White House three years ago, the first Egyptian prime minister to do so. He has consistently used the slogan to end his speeches ever since.
There are certainly promising signs. Foreign direct investment has risen sharply in Egypt since the government started an economic liberalization program.
According to the publisher Business Monitor International, Egypt attracted 6 billion dollars worth of foreign investment inflows in 2005-2006, a considerable gain over approximate inflows of 300 million dollars in 2003-2004.
Corporate taxes were cut in half to 20 percent. Growth in gross domestic product, which had been stuck at near three percent a year for the early part of the decade, rose to five percent in 2005 and 6.9 per cent last year. The tourism industry has doubled in size in less than five years and is predicted to grow by 12.5 percent in the coming 12 months.
While government and business leaders are eager to communicate Egypt's new found optimism and opportunity, there is still a fundamental credibility gap among investors, says Nada.
"Investors still do not know to what extent they can take a chance on investment in Egypt. In their minds there is a question mark over credibility .We have what I would call a weakness for being slow and for having broken promises like promising to deliver facilities or equipment and not delivering," says Nada.
"If you have a reputation for broken promises, you scare foreign investment away," he argues.
Egypt was placed 77 out of 133 in the anti-corruption civil society organisation Transparency International's 2006 Corruption Perceptions Index. It takes a long time to get rid of a bad reputation, says policy advisor Simon Anholt, who advises countries on how to build a good reputation. He likens a bad reputation to a natural catastrophe.
"Having a negative reputation is like a tidal wave or a volcano erupting. If people have a negative view of a country, and people do have a negative of Egypt, you simply cannot change that through communication. You have to work on it for a long time and change it through real action," says Anholt.
"Changing a country's image is an investment in innovation and structural change," from his point of view.
Economic change has been high on the agenda. Egypt's economic reform programme was launched in the early part of this decade. Under Nazif's ambitious reform plans, multinational corporations opened offices and made profits.
Domestic businesses expanded and diversified. With a large workforce and trade agreements in place with European, Arab and African markets, it seemed that Egyptians had a rosier future to look forward to.
However, reversing a half century of socialist policies based on state control has proved to be no easy task. The western-educated cabinet ministers surrounding President Hosni Mubarak have inherited a decrepit bureaucracy left over from the 40 year rule of Gamal Abdel Nasser from which, some economists say, the country is still recovering.
Egyptian industries suffered from bad management and an absence of competition, says Tarek Nour, chairperson of Tarek Nour Communications. "We could not advertise business in Egypt before because it was run by bad government. There is definitely a residue left behind We have basically had 50 years of bad management.
"I am sure a minister today gets discouraged when he finds 35,000 people in his ministry doing nothing It is a legacy that is very difficult to untangle," says Nour.
But Nour says the new guard is a different calibre of bureaucrats who are working hard at overhauling bureaucracy and getting their own house in order. He points to his own business as proof, which he says has doubled in the last couple of years because of the economy's performance.
Business leaders are quick to praise Mubarak's team of cabinet ministers for tackling some of Egypt's trust issues. Egyptian industry has been dogged by inconsistent quality, poor delivery on deadlines and poor customer service.
In an effort to boost exports and raise standards, the Egyptian government is funding a quality improvement programme to modernize and upgrade some 1,000 small and medium-sized enterprises to become more export oriented.
The programme aims to create an estimated 50,000 new jobs in the manufacturing industry, attract approximately 2.5 billion dollars in investments and double the sector's exports to almost 1.5 billion dollars.
The minister of trade and investment has created a network of councils representing industries from furniture and textiles to food processing. Their task is to advise the minister on how to improve regulatory and business climates to boost exports.
Empowering industry leaders seems to be working. In the furniture sector, exports are expected to quintuple in the next three years from 200 million to 1 billion dollars.
Branding efforts have to begin with the Egyptian people. As the government steps away from its socialist tradition to embrace private enterprise and pursue global markets, it's also stepping back from its subsidies that Egyptians have depended on for decades.
The prices for basic goods have shot up as subsidies are stripped away and Egyptians see no change in their meagre wages. Inflation rocketed from three percent at the end of 2005 to 12 percent by last October. Understandably, Egyptians have little faith in their government.
Egyptians need to feel good about their country, says Anholt, as that is the basis for a long-term, positive branding effort. "It has to be a fundamental, deep rooted cultural change that comes from self-respect and doing well, personally and nationally."
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