The Impact of the Current Economic Crisis on Migration: Findings from Egypt

'The world is confronted with the worst financial and economic crisis since the Great Depression. The evolving crisis, which began within the world's major financial centers, has spread throughout the global economy, with a serious impact on different aspects related to migration. Despite the lack of data, it is expected that this phase will have a serious negative impact on remittances, unemployment,  migration and development initiatives, and migrants' rights'.

by Ayman Zohry

The world is confronted with the worst financial and economic crisis since the Great Depression. The evolving crisis, which began within the world's major financial centers, has spread throughout the global economy, causing severe social, political and economic impacts' (United Nations). Since the beginning of the crisis, many countries have suffered negative impacts reflected in increasing unemployment rates, decreasing economic rates, declining remittances from migrants abroad, return migration, a serious impact on migrants' rights, and increasing rates of irregular migration.

With more than six million Egyptians abroad, Egypt is facing serious problems caused by the global economic crisis. Despite the fact that statistics are not available to quantify the impact of the crisis, negative outcomes of the crisis started to evolve.

The economic crisis has a serious impact on different aspects related to migration. The crisis affected unemployment rates, remittances, migrants' rights, internal migration, as well as the debate on migration and development. Data released by the Central Agency for Public Mobilization and Statistics (CAPMAS) indicate that unemployment rate in Egypt increased from 8.8 percent in the second quarter of 2008 to 9.2 percent in the same period of 2009. Despite the fact that quantitative evidence does not exist to directly link the increase of unemployment rates to return migration and the declining job opportunities internally and externally, one can safely say that the global economic crisis is one of the main factors that affect unemployment rates. 

With respect to remittances, Egyptian migrants remitted 9.5 Billion USD in 2008. Remittances comprise about six percent of the Egyptian GDP. A report on Egyptian remittances released in August 2009 indicated that migrants' remittances to Egypt decreased from 2.285 billion USD in the first quarter of 2008 to 1.738 Billion USD in the first quarter of 2009 with an absolute decline of about 550 million. The report also indicated that remittances of Egyptians in Kuwait decreased from 642 to 337 in, the same period remittances from Egyptian workers in Saudi Arabia decreased from 254 to 196 million. If this trend continued in 2009, the Egyptian remittances may be expected to decline from 9.5 to 7.3 Billion USD, with about 2.2 billion USD or more than 20 percent of remittances in 2008. The economic crisis will also increase the initial cost of migration, i.e. the cost of securing a work contract in one of the Arab Gulf countries — the traditional destination of Egyptian migrants or the cost of irregular migration to Europe. In addition, migrants will be obliged to accept harsh working conditions in order to keep their job such as working more hours than usual or accept lower salaries than before. In addition, seizing job opportunities abroad and the return migration will increase the pressure on internal migration and labor circulation internally.

While Egyptian metropolitans already suffer from internal migration which is the main cause of the growing slum areas surrounding Cairo and other metropolitans, it is expected that the decreasing opportunities of securing job opportunity abroad will increase pressure on jobs internally. Internal migration to metropolitans is expected to play a major role in absorbing the negative impact of the economic crisis in rural Egypt. It is also important to bear in mind that the crisis came in a time that many countries, including Egypt, started to join international efforts to encourage the migration and development interrelationships and encourage linkages between diasporas and their origin to foster development and build bridges between migrants and their home countries. The economic crisis is expected to weaken such initiatives. Despite the fact that we don't have enough data to assess the current and the future impact of the current economic crisis, it is expected that this phase will have a serious negative impact on remittances, unemployment, internal migration, migration and development initiatives, and migrants' rights.

Despite all of these negative impacts of the crisis, opportunities still exist; return migrant come back to their origin with their cumulated savings, knowledge, and experience which may be mainstreamed into economic development in origin. However, this is not a granted opportunity; government policies should support the penetration of return migrants into economic development by utilizing their remittances, knowledge and skills in the development process. The economic crisis also can be considered as an opportunity to develop the skills of the labor force to be able to compete in the international labor market after the end of the current crisis.