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The Changing Economic Environment and the Development of the Micro and Small Enterprises in Egypt 2006

Author

Listed:
  • Alia El Mahdi

    () (Professor of Economics in the Faculty of Economics and Political Science, Cairo University, and Director of the Center of Economic and Financial Research and Studies.)

  • Ali Rashed

    (Statistician and Economic Analyst, Minister's office, Ministry of Trade and Industry.)

Abstract

This paper used the Egyptian Labor Market Panel data 2006 to compare the changes that took place in the labor market, and particularly the MSEs market, over time (1998 and 2006) in order to answer several questions. The most important of which are: How do the continuous economic changes affect the role of the private sector and distribution of workers among the different sizes of the enterprises? And, are the MSEs still the major job providers or are the medium and large sized companies starting to offer a growing percentage of work opportunities to the labor force? The comparisons revealed the following: The steady pace of the privatization process, in the wider sense of the word, revealed that the estimated numbers of MSEs increased by 4.7% annually from 2.5 million Economic Units (EUs) to 3.5 million EUs in 2006, which is a far higher growth rate compared to that of the period 1988-1998, which was 1.6% annually. The market was vibrant. In fact, movement is happening in the MSEs, huge numbers are leaving the market everyday, and more are entering it daily. New economic units are replacing marginal, inefficient MSEs all the time. The size of the MSEs in 2006 tends to be extremely micro in terms of number of workers and capital. Certain economic activities are disappearing, while new, modern activities are born. The female’s share among the self-employed and employers community in Egypt dropped by 1.2 percentage points during the period in question from 19.1% in 1998 to 17.9% in 2006. This result concurs with other studies, which indicate a slow decline in the percentage of femaleowned enterprises in Egypt. As for the role of trade liberalization in opening up new export markets in front of MSEs, data showed that export markets were of extremely minor importance within the array of clients they dealt with.

Suggested Citation

  • Alia El Mahdi & Ali Rashed, 2007. "The Changing Economic Environment and the Development of the Micro and Small Enterprises in Egypt 2006," Working Papers 706, Economic Research Forum, revised 01 Jan 2007.
  • Handle: RePEc:erg:wpaper:706
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    References listed on IDEAS

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    1. Keisuke Hirano & Guido W. Imbens & Geert Ridder & Donald B. Rubin, 2001. "Combining Panel Data Sets with Attrition and Refreshment Samples," Econometrica, Econometric Society, vol. 69(6), pages 1645-1659, November.
    2. Emre Ekinci, 2009. "Dealing with Attrition When Refreshment Samples are Available: An Application to the Turkish Household Labor Force Survey," 2009 Meeting Papers 353, Society for Economic Dynamics.
    3. Armida Alisjahbana & Chris Manning, 2007. "Trends and Constraints Associated with Labor Faced by Non-Farm Enterprises," Working Papers in Economics and Development Studies (WoPEDS) 200711, Department of Economics, Padjadjaran University, revised Oct 2007.
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    Cited by:

    1. Shireen Al Azzawi, 2010. "The Dynamics of Poverty and Inequality in an Era of Economic Liberalization: The Case of Egypt," Working Papers 539, Economic Research Forum, revised 09 Jan 2010.
    2. Ali Rashed & Maia Sieverding, 2014. "Micro and Small Household Enterprises in Egypt: Potential for Growth and Employment Generation," Working Papers 831, Economic Research Forum, revised May 2014.
    3. Marchetta, Francesca, 2012. "Return Migration and the Survival of Entrepreneurial Activities in Egypt," World Development, Elsevier, vol. 40(10), pages 1999-2013.
    4. Caroline Krafft, 2016. "Understanding the Dynamics of Household Enterprises in Egypt: Birth, Death, Growth and Transformation," Working Papers 983, Economic Research Forum, revised Mar 2016.
    5. Caroline Krafft & Reham Rizk, 2018. "The Promise and Peril of Youth Entrepreneurship in MENA," Working Papers 1257, Economic Research Forum, revised 19 Nov 2018.
    6. Hadi Salehi Esfahani & Roksana Bahramitash, 2015. "Gender, Enterprise Ownership, and Labor Allocation in MENA: the Roles of Islam, Oil, and Government Policies," Working Papers 951, Economic Research Forum, revised Sep 2015.
    7. Ragui Assaad & Caroline Krafft & Shaimaa Yassin, 2018. "Job Creation or Labor Absorption? An Analysis of Private Sector Job Growth in Egypt," Working Papers 1237, Economic Research Forum, revised 14 Oct 2018.
    8. Mélika Ben Salem & Chahir Zaki, 2017. "Revisiting the Impact of Trade Openness on Informal and Irregular Employment in Egypt," Working Papers 1107, Economic Research Forum, revised 06 2002.

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