CAIRO: In a heated argument that saw one participant escorted out of the hall, government officials and labor activists disagreed on the newly proposed social insurance and pensions law during a workshop organized Tuesday by the Social Contact Center (SCC).
While some of the participants hailed the draft law as reform, others called it a constitutional right. Others, however, expressed their opposition to the law, saying the current one is better.
Under the title, “The Legislative System for Social Insurance in Egypt,” the feasibility and applicability of the draft law were discussed by political parties, state representatives, and professional and labor syndicates. This is part of an SCC mandate to rationalize the policy making process through moderating discussions of the draft law before legalization by parliament.
Mohmed Moeet, assistant to the Minister of Finance, stressed the importance of dialogue and transparency with regards to the law.
“The discussion about this law did not start in Parliament or in the Shoura Council; it started in workshops just like this one in an effort to create dialogue and awareness,” Moeet said.
“The law started out as being an insurance and pensions law, but has now become a comprehensive law for a long term strategic reform of the social welfare system, providing a decent pension and insurance service for all, supported by the rule of law and insured by the treasury,” he explained.
The proposed law is expected to increase the government’s revenues as it aims to increase the number of applicants by promising pensioners and health and injury victims more financial compensation. This would be financed by decreasing the percentage of wages paid by lower income employees and increasing the share paid by higher income employees.
The law will also raise the retirement age gradually to reach 65 by 2027 and increase the paid unemployment leave from six months to a year.
“This law has been discussed for three years now and this event is just a continuation of the transparency and flexibility shown by the government with regards to the law,” added Moeet.
Hussein Megawer, head of the Egyptian Labor Unions in Egypt, said he 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.
Public mistrust
For the government, the pursuit of garnering a consensus on the draft law has been met by public scrutiny and mistrust.
Saber Barakat, a lawyer and labor activist in the coordination committee for Rights and freedoms of Workers Unions, said that insurance and pensions are constitutional rights and refused to call the proposed 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.” Why are we changing it? Because the law is costing the government, and the IMF says that government should reduce social welfare spending,” explained Barakat.
According to Essam El Din Shiha, lawyer and member of the higher council of Al-Wafd party and a proponent of the draft law, said that there will be a new system for running the government pension and insurance funds.
“The system will be run by the High Council for Pensions and Social Insurance, a body which includes all government and labor stakeholders. In the past, the funds made from pension and insurance payments went to the National Investment Bank giving an interest of only 4.5 percent and this money was not invested, causing a lapse in revenues due to the much higher inflation. Now 35 percent of money will be invested and money will also be insured by the treasury,” said Shiha.
One of the main concerns is whether the government is capable of investing the money successfully and insuring the insurance payments and pensions.
When this question was raised by MP Yosry Mohamed Bayoumy, who strongly opposes the law, the session erupted into chaos in a scenario reminiscent of regular parliamentary sessions.
“There is no consensus,” shouted Bayoumy.
Bayoumy was prohibited from continuing and the moderator told him that he will have a chance to present his views in parliament.
Opponents of the law then started loudly complaining that the minister’s assistant had the right to speak, and thus they should give the opposing view a chance.
One of the participants was escorted out of the workshop for refusing to follow the regulations, but tensions seemed to ease as Moeet and various proponents calmly repeated their defense, assuring the public that the law was in the interest of pensioners.
Barakat then made a concluding comment about linking the current pension and insurance law to the minimum wage.
“The problem is that pensions are low and wages are low; we need to increase both and we need to do this by reforming the already existing laws for pensions and insurance as well as wages,” commented Barakat.
As the parliament is currently discussing the state budget, it is still unclear whether the draft law will be discussed and subjected to the voting process before the end of the current parliamentary session.
