Since its election in January, the Egyptian Parliament approved with no notable modification more than three hundred legislations that were passed between 2013 and 2015. The only exception made was the “civil service law” that President al-Sisi had already issued as a regulatory framework to reform and to restructure the state’s administrative apparatus, and improve its efficiency. This law was intended to pave the way – at least partially – to reduce the state administration’s financial burden by increasing opportunities for early retirement and resignations, and restricting leaves of absence. This exception reflects social and political sensitivity to the issue of reforming the administrative apparatus in Egypt, a sensitivity whose consequences and effects appear more important than the technical, administrative and financial efficiency that the Egyptian government –and the presidency, of course—is attempting to achieve at this stage. How then, can the reform of state administration be reconciled with political and social stability in Egypt?
There is no way to deny the need for reform of the state apparatus, which combines oversize and low efficiency, both in the performance of public services and the completion of regulatory procedures for citizens or private businesses, whether they are Egyptians or foreigners, big or small investors. It is now also evident that the state’s administrative apparatus is suffering from extreme redundancy and underemployment, which, according to the estimates of the former minister of administrative development, may reach more than half of all employees. A large number of these employees earn very low salaries, which leads to inflation and low worker productivity. This, in turn, deprives the government from the resources necessary to invest in capacity- and skill building, or to provide a decent wage for workers, which would motivate them and limit their susceptibility to corruption. It is well known that the lack of efficiency and the spread of corruption incur high costs on both the economy and society, such as unrealized investments, wasted resources, and foregone opportunities for growth and investment. They also carry a political cost, which is represented in the loss of confidence in the state apparatus, as well as the loss of legitimacy and credibility of public policies and institutions.
The state administrative apparatus with all its components on the central and local levels and State-owned enterprises employs nearly one third (31 percent) of the total workforce in Egypt, according to an estimate of the Central Agency for Public Mobilization and Statistics in 2012. The absolute figure, which reaches six million, indicates that there are at least about twenty million Egyptians who depend on public employment as a source of income. If we consider that most state employees, more often than not, benefit from contracts and insurance –i.e. in the official sector—this means that most workers in the private sector are either informally employed (without any permanent contracts and with a limited degree of job security), or are self-employed in menial occupations with weak productivity and meagre income. This may explain in part why many young people of middle or high education still prefer government employment. Furthermore, the state administrative apparatus appears to hold the bulk of educated female employees. Indeed the private sector has been reluctant to employ women as a result of the high relative cost of maternity leave, and chances of absence from work after marriage.
All the above indicate a bitter truth that should not be ignored about the historical and social context of Egypt in the past five decades: not only is the state’s administrative apparatus a machine responsible for the implementation of public policies, the provision of services and the completion of the legal proceedings—so that it be compared with any other bureaucracy solely in regards to its efficiency of the financial burden of hiring—but also it fills a crucial social function, and a political task to absorb millions of young people at work who can not be channelled into the (usually informal) private sector that often lacks minimal job security. The millions who depend on the state apparatus as a source of income are in fact implicitly getting a kind of unemployment benefit. The work and the income that the state provides to middle or highly educated segments of the population, is necessary –despite its considerable financial cost—to safeguard social and political peace and stability. From this perspective, the wage clause in the state’s general budget, which amounts to about quarter of total public expenditure, can be viewed as an implicit tax paid by society as a whole to combat unemployment and the resulting feelings of exclusion and injustice especially among the educated youth.
It must hence be recognized that the Egyptian state’s administrative apparatus holds a social function that goes beyond being a mere administrative body for a company or for a facility. The reduction of labor in the name of reform puts social stability at grave risk. However, the state apparatus is indeed incompetent. A clear separation should be made between improving efficiency and increasing capacity on the one hand, and laying off surplus labor in the short term or even the medium term, on the other. Surplus labor must be retained, and salaries paid in full for the remaining time of service; in other words, turning wages openly and explicitly into unemployment benefit, according to clear, objective and transparent criteria –especially where capacity and skills building of state employees is concerned. This means keeping half the labor force, and investing in its considerable human and material resources.
In contrast, the state should ease the burden of wages by reducing their relative weight in total expenditure, in other words by increasing revenue taxes, without a proportional salary hike. This would not do harm to income-based families dependent on the public employment, but at the same time would convert the bulk of the resources towards investment purposes which have a higher economic and social return.