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GTAP Resources: Resource Display

GTAP Resource #3928

"Assessing the Impact of Trade Reforms on Informality in Egypt"
by Zaki, Chahir and Irene Selwaness

During the Economic Reform and the Structural Adjustment Program introduced since the early 90’s, trade reforms in Egypt were adopted in order to liberalize the trade regime, described as being highly restrictive by this period. Through reductions in tariff and non-tariff barriers over two decades, Egypt has significantly liberalized its external trade. Specifically, the maximum tariff rate has decreased from 110% at the end of the 1980s to reach 40% in the end of 1990s. In 2004, the government of Egypt launched the second wave of liberalization. Its objectives were twofold: first, to reduce tariffs and rationalize the tariff structure; and second, to reduce the number of products subject to non-tariff barriers. Both nominal and effective protections have declined in the manufacturing sector from 21.3% to 12.1% and from 23.3% to 14% respectively after the 2004 reform. Consequently, exports and imports in Egypt experienced significant increases since early 1990s and in a more pronounced way after 2004, where, on average, exports increased annually by 5% before 2004 vs. 24% after this date, while imports by 2% and 24% respectively.
Claims that trade openness and markets’ exposure to foreign competition could widen the wage inequality and increase labor movements towards informal sector have raised. The informal sector is mainly characterized by employment relationships that do not comply with labor regulations i.e. not protected by legal contracts or not providing social security coverage. Likewise, informality in the broader definition can be expressed by many terms such as informal enterprises, informal sector, informal jobs and informal employment. Informal sector is the sum of all informal enterprises, whose size does not exceed a determined threshold (5-10 workers depending on the national context) and are not registered/licensed or not subject to tax legislation, social protection or labor regulations. Jobs described as informal are own-account workers (...

Resource Details (Export Citation) GTAP Keywords
Category: 2012 Conference Paper
Status: Published
By/In: Presented at the 15th Annual Conference on Global Economic Analysis, Geneva, Switzerland
Date: 2012
Created: Selwaness, I. (4/30/2012)
Updated: Selwaness, I. (4/30/2012)
Visits: 1,831
- Labor market issues
- Middle East
- Africa (North)

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