Ismailia has one of the highest unemployment rates in Egypt, still, it is a magnet for East Asian labourers, especially in the Free Investment Zone where spinning and weaving factories are located. 

Since the revolution, however, the number of Asian labourers has dropped significantly from 3000 to merely 600, according to local labour authorities, due to the lack of demand and the deteriorating economic situation. Other foreigners, on the other hand, have successfully integrated within society.

“One hundred-fifty dollars a month is enough to persuade any Bangladeshi to immigrate,” explained Islam Guing in fluent Arabic, about why he left Bangladesh eight years ago.  He travelled to Ismailia with a Bangladeshi investor who opened the largest garment manufacturing factory in the Free Zone, benefiting from the tax holidays there. Many Asian investors in Ismailia employ Asian workers, resulting in most of the foreign workers in Egypt being Asian.  

“Asian labourers receive a monthly salary of $150–200 which is less than the average salary of Egyptian workers,” said Sun Jhi, the Indian director of a garment manufacturing facility in Ismailia. “However, they get a decent profit margin because of the low exchange rate of their national currency against the US dollar to the Egyptian pound,” Sun Jhi explained. The Egyptian pound equals more than 10 rupees in Bangladesh while the US Dollar exceeds 60 Indian rupees. “This is why they accept such salaries especially since the Gulf countries, where incomes are high, don’t offer much higher salaries for Asian

Cheap labour preferred

Low salaries and reduced insurance costs have driven employers, even Egyptians, to hire foreign labour rather than Egyptian workers. Ministerial decision No. 700 of 2006 allows any facility to employ foreign workers up to 10% out of the total labour force, provided they have the necessary experience, said Muna Fayez, Director General of Labour Force in Ismailia. Fayaz admits, however, that some employers recruit a higher percentage of foreign labour then allowed, which can be witnessed in Ismailia’s Free Investment Zone.

Egyptian employers hire East Asian workers through foreign labour recruitment offices, which have recently become widespread. Ahmad Ramadan, an employee in one such office, said the experience condition wasn’t relevant because all workers would issue certificates of experience from their respective countries. Necessary paperwork includes the factory tax and commercial records as well as insurance certificates for its Egyptian workers. Foreign workers shall only constitute a maximum of 10% of the total workforce and must not be insured as per Egyptian law. This is the main reason why employers hire foreign workers to avoid paying any insurance fees, according to Ramadan.

The unemployment problem

Tadrus from Indonesia said he was treated well by most of his colleagues in the factory where he works as production supervisor. Some Egyptian workers, however, refused his presence and that of other Asian workers because they accuse them of limiting their work opportunities even though there are hundreds of other positions available but aren’t occupied by people from Ismailia or the neighbouring governorates, Tadrus claimed.

Kamal Roshan, a tailor from India expressed his resentment against some demonstrations by Egyptians demanding benefits and incentives without considering the daily losses of investors after the revolution because of the insecurity and export difficulties.

At the same time, Roshan didn’t deny his need and the need of his countrymen for such benefits, on top of which came insurance.

Culture shock

Guing immigrated when he was 18. Like most Asian workers, he didn’t know much about Egypt beforehand but he preferred to go to any country rather than stay in Bangladesh where he was unemployed. The lack of any knowledge of life conditions and the income disparity to living standards in Egypt create difficult circumstances. Ravi Khanan, for example, an Indian worker, complained that his salary was disproportionate to life requirements in Egypt, forcing him to give up some necessities. He explained that had it not been for the factory accommodation and meals provided by the factory, he would not have saved any money.

Santos Amado from the Philippines said that the factory where he works has no official rules about salary increases, leaving the decision about promotions up to the business owner, which causes many workers to return home. Furthermore, hundreds of workers left Egypt after the revolution because production rates dropped and investors did not need new labour after cancelling many supply and export orders.

The foreign advantage for employers

In addition, Asian workers have to work for approximately 10 hours a day and many factories don’t offer insurance for foreign workers who remain without a legal umbrella to protect them.

Ramadan’s office receives a commission equalling one-month’s salary from the investor for every foreign worker he places. Ramadan denied information about implementing the decision of the former Minister of Labour Force, Ahmad Albura’e, to stop foreign labour licensing to lower unemployment rates amongst Egyptians. “Such statements are merely idle talk because implementing them would disrupt the interests of spinning and weaving investors who completely rely on foreign labour, which enjoy several advantages as compared to their Egyptian peers,” he stressed.

The advantages of employing Asian workers aren’t merely financial. Mahmoud al-Mouji, who owns a garment manufacturing facility in the Investment Zone, said his industry heavily relied on exports, which demand a certain level of quality, which requires permanent employees.

Asian workers sign fixed-term contracts while most Egyptian workers lack commitment, don’t settle in one place but move from one factory to another, and prefer not to have regular jobs in factories, which raises employers’ concerns, al-Mouji claimed.

“Companies post employment advertisements and nobody responds; therefore, spinning and weaving factories have become associated with foreign labour,” al-Mouji said. “These factories constitute the larger part of factories in the Free Zone as eastern Asian investors have realized that the climate and geographical nature of Egypt constitute the most important factor for the success of spinning and weaving investment here.”

Guing has been promoted several times and he is currently a production hall manager and earns US $600 a month. He has become better integrated and aware of the Egyptian society but many of his colleagues left the country after the revolution either because of the low demand on textile factories or due to the frequent protests demanding worker’s rights. This has caused some investors to liquidate their businesses and look for less costly investment areas.