Situation Analysis: Key Development Challenges Facing Egypt

Situation Analysis: Key Development Challenges Facing Egypt

Lead Author Professor Heba Handoussa, Coordinator, Situation Analysis Taskforce

2010

This Situation Analysis is a multi-stakeholder document prepared by a Taskforce, led by Heba Handoussa, which consulted with sector-specific experts, independent advisors to government, UN Agencies and other national and international development partners in Egypt.

The Taskforce also reviewed a wide array of official documents and recent development literature on Egypt.

The Taskforce has gratefully received and accommodated as much as possible numerous comments on the various drafts of the report.

Preface Fayza Aboulnaga, Minister of International Cooperation

أبواب

II.1 Egypt’s Integrated Social Policy: Changes and Challenges 45

II.1.a Safety Nets and the Welfare State 45
II.1.b Intended and Effected Changes in Social Policy 47
II.1.c MOSS Reforms and Capacity Building 50

II.2 Poverty Reduction 50

II.2.a Food Security, Consumer Price Index and the Poor 51
II.2.b Removing Energy Subsidies and Targeting the Poor 53

II.3 Gender and Youth 54

II.3.a Women: A Special Concern 54
II.3.b Youth Building the Future 58
II.4 Family, Child and Population 60
II.4.a Results of the Child Multidimensional Poverty Study 60
II.4.b The Issue of Fertility and Population 61

II.5 Education 64

II.5.a Literacy and Adult Education 64
II.1.b Education Reform at Pre-University Level 66
II.5.c Sector Analysis of Higher Education in Egypt 

Health and Nutrition 73

II.6.a The Health Sector Reform Program 74
II.6.b Impact of Environmental Degradation 74
II.6.c Disease Burden in Egypt 

أبواب أخرى

II.7.d Human Rights 83
II.7.e Access to Justice 85
II.8 Social Protection 86
II.8.a New Pension Law 86
II.8.b A New and Universal Social Health Insurance (SHI) System 87

من النص Executive Summary

Social Protection

The New Pension Law: Egypt is introducing and enforcing a new fully funded pension system based on defined contributions and a unified law that targets all segments of the population. To encourage compliance, the new pension system reduces the contribution rates to 11% for the insured individual and 19.5% for the employer. It provides protection against old age, disability, work injury, unemployment and death at a lower cost than the current pension system, especially for low and medium wages, including casual and informal workers. The retirement age will gradually rise to 65 years to face the increase in life expectancy and hence the financial commitments of the system. An individual’s pension benefit replacement rate will represent 75% to 88% of the value of his/her last net wage before retirement, disability or death. The gradual implementation of the new pension system will help reduce the financial burdens incurred by the public treasury; enhance the system’s fiscal sustainability; maintain the role of the state in income redistribution; improve economic efficiency; and develop the capital market. To successfully implement the system it is essential to enhance public trust in the government’s ability to honor its long-term commitments at retirement and not to excessively use pension funds in financing the budget deficit.

A New and Universal Social Health Insurance (SHI) System. Egypt’s proposed new health insurance system is to provide financial protection through risk pooling and protection from catastrophic illness that can push people into poverty. Current political thinking proposes to cover the whole population (up from the current 50%) under a unified law aiming at achieving equity in access and quality services. The government is currently working to implement a plan that will offer a baseline minimum of healthcare for all Egyptians and underwrite a long list of basic health procedures. Pilot programs are now underway in the governorates of Suez, Sohag and Alexandria. A 10-year phased plan will roll out a partnership between the public and private sectors in which the insurance industry plays an important supporting role. Financing the SHI system relies on the principle of solidarity that will require income-related contributions which apply to those with a regular or assessable income.

من نص التقرير

II.8 Social Protection 11.8.a New Pension Law Based on country experiences worldwide, Egypt is introducing and enforcing a new fully funded pension system based on defined contributions. Tying pension benefits closely to contributions stimulates individuals to comply and continue to work for the longest period possible. To encourage compliance, the new pension system reduces the contribution rates to 11% for the insured individual and 19.5% for the employer. The new pension system is based on a unified law that targets all segments of the population. Additionally, the new system provides protection against several risks, most importantly old age, disability, work injury, unemployment and death at a lower cost than the current pension system, especially for low and medium wage earners. This is achieved by introducing professional and innovative methods of management and establishing solidarity accounts to fund these risks through a portion of the contributions collected from the insured individuals and their employers. Casual and informal workers are encouraged to contribute to the system and benefit from its pension benefits. The new system covers: • Old Age Pension Benefits: The system aims at increasing the retirement age gradually to 65 years to accommodate the increase in life expectancy and hence the financial commitments of the system. Based on the defined-contribution principle, an individual’s pension benefit replacement rate will represent 75% to 88% of the value of his/her last net wage before retirement, disability or death.

رابط

• http://www.un.org.eg/docs/101100%20SA%20Report%20final%20pdf%20version.pdf