CAIRO: The People’s Assembly approved the new law on insurance and pensions Sunday despite mounting disagreement on many articles of the law from opposition members in parliament.
Acording to Al-Ahram, the state-run daily newspaper, Minister of Finance Youssef Boutros Ghali denied that the state has abdicated its role in achieving social integration of citizens through the new the insurance draft law.
“The absence of the word social in the project does not mean that the government had ignored the principle of social welfare,” said Ghali.
Ghali added that the new law achieves social solidarity to a much greater extent than the current law, and provides advantages for those who receive inadequate pensions and wages in particular, while still decreasing the payments as the income of those insured grows.
After the adoption of the law, the minister praised the role of Hussein Megawer, the chairman of the committee on manpower and president of the Egyptian Trade Union Federation (ETUF).
“The project submitted by the government had no social vision, and trade unions, labor unions, chambers of commerce and industry associations were able to add to the law giving it a social aspect that was previously missing,” said the minister in his statement.
In a conference last month, Megawer agreed that labor unions played a significant role in the law’s formulation.
“We amended 38 articles in the law, taking the positive things from the old law and adding to the new one. Labor representatives were consulted every step of the way,” said Megawer.
Saber Barakat, a lawyer and labor activist in the coordination committee for rights and freedoms of workers unions, said that the labor union’s support and amendments to the law were carried out as the labor unions and its representatives are fully incorporated into the state structure.
“It is not a surprise that the NDP members in parliament and their labor union cronies have approved the law as this is what always happens, and nobody from the NDP or from the government run labor unions has spoken out or will ever speak out against this law,” said Barakat.
The minister stressed that the Egyptian society as a whole will benefit from this law, which grants benefits for generations to come.
He added that the government had asked to apply one article of the law this month increasing pension rates by a range between 10 percent and 300 percent for small pensions.
The parliament session has witnessed altercations between the majority and the Muslim Brotherhood MPs during the debate on articles of the law.
Yosri Mohamed Bayoumi, a Muslim Brotherhood MP, and one of those who had been following the law since it was first announced, said the new law had an improved and more equitable social aspect.
“It provides higher pension returns and pension funds for those who previously did not get them and is very equitable. The main problem is where the money is going to go,” said Bayoumi.
“We found very strong support for the law from the majority candidates but none of the opposition’s concerns were taken seriously.”
“The new law is more like a law that governs an insurance company and not a pensions and insurance law of a welfare state,” Bayoumi added.
Bayoumi explained that under the old law, the government made revenues of around LE 450 million which they have been using to cover the deficit and investing in infrastructure projects.
“There is currently a case filed in the constitutional court about the legality of how the funds were used, questioning the legality of giving the ministry of finance control over the insurance and pension funds,” Bayoumi said.
Bayoumi pointed out that this new law gives the government the right to invest the pensions and insurance funds in any manner they choose.
“We wanted to amend the relevant article in the law to ensure the government could only spend it on ‘safe investments’ and prevent them from investing in the stock market, as they have done this in the past,” said Bayoumi.
“We want to be sure that the government invests the money in the best interest of the citizens, increasing spending on labor intensive industries, for example,” Bayoumi added.
Barakat said that insurance and pensions are constitutional rights and refused to call the law “reform.”
“This is merely a way for the government to gather funds. The law we have now has been praised by the ILO as one of the best laws in the world,” said Barakat.
“The problem,” Barakat explained, “is that the law combines between the right to be insured by the state and right to receive social welfare from the state. This welfare is supposed to be a constitutional government role that we are not supposed to be paying for as part of our social insurance and pensions.”
“I believe that the law we have now is far more superior. Most importantly, it limits and manages where the government is allowed to allocate insurance and pension funds and does not give them total freedom to spend the money and squander it,” said Barakat.
“The main objective of this new law is to give the Ministry of Finance full control of the insurance and pension fund revenues to use as they wish.
“This law is bound to fail financially, administratively and politically, the problem is it will take 40 years until the crime is uncovered,” concluded Barakat.
