The challenge of globalisation in the Arab countries. What should the trade unions be doing?

By Mohsen Ben Chibani, economist, ICFTU OnLine,
13 August 1997

Meeting in Cairo for the sub-regional seminar organised recently by the ICFTU in the framework of its plans to strengthen the Arab trade unions, several Palestinian, Jordanian and Egyptian trade unions discussed the effects of globalisation in the Arab countries and on the labour world. Brussels, 13 August 1997 (ICFTU OnLine): The globalisation of the economy has become a daily reality for trade unions in the Arab world. The challenge is all the greater given that labour legislation, trade union rights and the social gains of the Arab trade union movement are under threat from the market economy, which now sets the rules for the economic policies adopted by the region's countries.

The State is gradually withdrawing from its regulatory role to give free rein to the rules of the market. The economic reforms now being applied by Egypt and Jordan as part of the Structural Adjustment Programmes advocated by the international financial institutions promote an ever larger role for the private sector, with a transfer of ownership from the State into private hands.

In Egypt the private sector plays a dynamic role and projects agreed with the foreign investors at the third Summit for the Middle East and North Africa, held in Cairo in November 1996, are beginning to be implemented, in addition to the vast projects being undertaken under the aegis of the government in upper Egypt and the Sinai peninsula. The privatisation process, in several sectors of the economy, is gathering pace, threatening thousands of jobs and exacerbating the already high level of unemployment (about 13% in both Egypt and Jordan).

Jordan's economic reforms, agreed with the international institutions, are also underway and are having a direct impact on the labour world. The government, which in 1996 passed a law preventing non-Jordanians from holding jobs in 15 different trades and occupations in the country and which has 50,000 new arrivals on the job market every year (in Egypt it's 500,000) is applying conservative monetary and budgetary policies. Inflation in 1996 was estimated at 6%, a 2.3% rise on the 1995 rate.

This is largely due to the 1996 subsidies on wheat, fodder, water and electricity. The recommendation of the international institutions in August 1996 to withdraw the subsidies on basic commodities and sharply increase the price of bread in Jordan resulted in riots by the workers, particularly in most backward districts of the Kingdom.

The West Bank and the Gaza Strip have the highest unemployment rate in the region, at 28% of the working population. This is principally due to Israel's decision to seal the borders and the deterioration in the political situation, which has discouraged foreign investors and delayed major reconstruction projects. The direct result of this situation was a sharp fall in purchasing power among Palestinians.

Palestinian, Jordanian and Egyptian trade unionists are worried about the social repercussions of these economic reforms. This concern is growing as exchange rates are liberalised and multinational companies make their presence felt, a new phenomenon for the region's trade unions whose stronghold is in the public sector.

To meet these new challenges, the seminar participants have called for a new trade union strategy based on strengthening their presence in the private sector, primarily through the respect of ILO instruments.

Specifically, the trade unions are calling for a link between the development of trade and the ILO's conventions, by means of a social clause which would for example put an end to child labour, particularly widespread in Egypt's cotton and textile sector, and encourage equality of opportunity at the workplace.

The seminar also appealed for measures to help unemployed college leavers, to reform the school system, to create vocational training centres that will enable workers to adapt their skills to the new demands of the labour market, and above all for a coordinated trade union policy to combat the abuses committed by the multinational companies in the region. The latter are accused of not respecting ILO conventions or trade union rights and of destroying the environment.

All these measures, stress the trade unions, can only become effective where there is democracy, social stability and above all lasting peace, of which sadly there is little prospect in this region for the time being.