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Egypt is struggling to keep up with the human development needs of its fast-changing economy, according to the World Bank report Embracing and Shaping Change: Human Development for a Middle East and North Africa in Transition (pdf). While the country has improved access to education, healthcare, and social protection in recent years, per-capita spending on these services has declined. Between 2005-2009 and 2020-2023, real human development expenditures per person fell even as GDP grew, with much of government spending diverted toward pensions despite having a youthful population. This left fewer resources for schools and hospitals, limiting investment in the country’s future workforce.
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Egypt is also facing a demographic transition that presents serious challenges. Fertility rates have fallen, while longevity is rising. Meanwhile, the old-age dependency ratio — calculated as those 65 and over as a share of 15-64-year-olds — is set to more than double by 2050 in both Egypt and the region as a whole. The projected doubling of the ratio in just a 30-year period follows the ratio in Egypt remaining essentially unchanged in the 50 years between 1970 and 2020.
People living longer is cause for celebration, but it comes with budgetary pressures. Longer lives need to be accompanied by longer working lives and longer healthy years of life; if not, countries like Egypt face accelerating financial and capacity pressures on pensions systems and healthcare, warns the report. Older populations also require a larger workforce working in healthcare and care, which is complicated by declining birth rates that are shrinking the active workforce in proportion to older Egyptians.
Climate change also seems to be keeping the writers of the report up at night — and understandably so. Egypt and the UAE have 15-20% of their populations living in coastal areas vulnerable to sea-level rise. Sea level rises will also come alongside a rise in the scarcity of water suitable for drinking and agriculture. The region is expected to see its GDP suppressed by 6-14% by 2050 on the back of water stress.
About one third of Egyptians could see their jobs affected by AI — a comparatively small proportion, according to the report. Of the jobs that will be affected, most are expected to be replaced and not augmented, according to the report.
Egypt is emerging as a global leader in digital gig work, supplying around 2% of the global online gig workforce and ranking ninth worldwide. Egypt already leads the region, which collectively accounts for 4% of the global digital workforce.
