Blogs

Poverty in Egypt has remained high and vulnerable to changes in gross domestic product (GDP) growth rates. By February 2009, an estimated almost 21 percent of the population or approximately 13.5 million lived below the national poverty line.[1] According to the World Bank (2009), the poverty situation improved in 2008, compared to 2004/05 (figure 1).

Figure 1: Aggregate Poverty Measures, 1990/91–2008 (%)

Sources: Kheir-El-Din and El-Laithy 2006; World Bank 2009.

Note: P0 is a measure of incidence of poverty; P1 measures the depth of poverty measured by the poverty gap index, which captures the percentage of shortfall below the poverty line for the whole population; and P2 measures the severity of poverty.

*Based on the per capita poverty line, whereas in the subsequent three surveys poverty measures were calculated on the basis of a household-specific poverty line.

In the aftermath of the January 25, 2011 popular uprising, poverty levels increased significantly, mainly due to the dramatic slowdown in growth rates, a significant increase in unemployment, and an unstable political situation (CAPMAS 2012).

The decline in poverty levels happened in tandem with improvement of income distribution. The latter appears to have generally improved from 1990/91 to 2004/05 (Kheir-El-Din and El-Laithy 2006). However, the World Bank (2009) found that high economic growth during 2005–08 was accompanied by a worsening income distribution.

Government subsidies partly contributed to worsening poverty levels.[2] Nearly 70 percent of the population was receiving ration cards but 19 percent of the most vulnerable population was excluded (IFPRI and WFP 2013).

Growth and Poverty

The economy's growth performance from the 1990s onward failed to create sufficient jobs to match the rapid increase in the labor force of 2.7 percent per year.[3]

During 1990/91–2008, poverty remained highly vulnerable, since any increase or decline in GDP growth was accompanied by a corresponding decline or increase in poverty for those close to the poverty line. The sixth national five-year development plan (2007–2012) had set the goal of reducing poverty to 15 percent by 2011/12 (UNDP 2010b), which unfortunately did not materialize.

Economic growth and poverty are unevenly distributed across regions and sectoral activities. More than two-thirds of the ultrapoor live in Upper Egypt. There is high sectoral concentration of the poor (40 percent) in agricultural activities, construction, and the informal sector (World Bank 2009).

References

• Amin, Galal. 2009. “The Political Economy of Equality and Inequality: Income Distribution, Technological Change and Power.” ERF Working Paper 500, Economic Research Forum, Cairo. http://www.erf.org.eg.
• CAPMAS (Central Agency for Public Mobilization and Statistics). October 2012. Press Release concerning the World Day of Combating Poverty. http://capmas.gov.eg/pepo/281.pdf.
• El-Ehwany N. and H. El-Laithy. 2002. "Poverty, Employment and Policy-Making in Egypt: A Country Profile," Towards Decent Work in North Africa No. 1, ILO
• El-Laithy, H., and D. Armanios. 2011. “Targeting of Poor in Egypt: Identifying the Alternative Means of Living: With Application on Ration Cards.” Social Contract Center, Observatory of Development Justice, Cairo.
• IFPRI (International Food Policy Research Institute) and WFP (World Food Programme). 2013. “Tackling Egypt’s Rising Food Insecurity in a Time of Transition.” Joint IFPRI and WFP Country Policy Note, May. http://www.ifpri.org/sites/default/files/publications/ifpriwfppn_egypt.pdf.0
• Kheir-El-Din, Hanaa, and Heba El-Laithy. 2006. “An Assessment of Growth, Distribution and Poverty in Egypt: 1990/91–2004/05.” ECES Working Paper 115, Egyptian Center for Economic Studies, Cairo. http://www.eces.org.eg.
• UNDP (United Nations Development Programme). 2010a. “Egypt Human Development Report 2010.” World Bank, Washington, DC. http://www.undp.org.eg/Portals/0/NHDR%202010%20english.pdf.
• 2010b. “Situation Analysis: Key Development Challenges Facing Egypt.” Lead Author and Coordinator: Heba Handoussa. Situation Analysis Taskforce, United Nations Development Programme, Washington, DC. http://www.undp.org.eg/Portals/0/Homepage%20Art/2010_Sit%20Analysis_KDCFE_English.pdf.
• World Bank. 2007. “Arab Republic of Egypt Poverty Assessment Update.” Report No. 39885-EGT, World Bank, Washington, DC.
• 2009. “Arab Republic of Egypt Economic Growth, Inequality and Poverty: Social Mobility in Egypt between 2005 and 2008.” Report No. 48093-EGT, World Bank, Washington, DC.