Wietkov Pressures Egypt by Highlighting Economic Struggles to Justify Gaza Displacement
Cairo rejects claims by U.S. envoy Steve Wietkov about economic collapse and high unemployment, accusing Washington of using economic pressure to push Egypt toward accepting Palestinian displacement from Gaza.
Watan-Statements made by U.S. Middle East envoy Steve Wietkov regarding Egypt’s fragile economic situation—which he said threatens state collapse, widespread chaos, and regional security—have sparked widespread anger among Egyptian officials, politicians, and media figures supportive of the regime. Officials denied Wietkov’s claims, including his assertion that unemployment in Egypt has reached 45%, and his emphasis that Egypt’s economic conditions are “extremely difficult,” requiring large international aid packages to maintain social stability and prevent unrest or the potential “loss of Egypt,” which could destabilize the region and increase migration to Europe.
Lawmakers described Wietkov’s remarks as “discouraging,” aimed at portraying Egypt as a fragile entity whose survival depends on the security situation in Gaza. State media also refuted Wietkov’s unemployment statistics, saying they were based on inaccurate and exaggerated data. While the U.S. envoy claimed unemployment was around 45%, Egyptian sources say it is closer to 6%.
U.S. Pressure Through the Economy
In an interview, MP and Deputy Head of the Labor Union Magdy El-Badawy said Wietkov’s comments were part of political and economic pressure on Egypt to push it to abandon its firm stance against forced displacement of Palestinians from Gaza and to accept their relocation into Egyptian territory, in line with the plan proposed by Netanyahu’s government and supported by the U.S. administration under Donald Trump.
El-Badawy noted that American officials’ focus on Egypt’s supposed economic fragility and high unemployment only emerged recently, to pressure Egypt into compliance. He warned that such pressure will likely intensify if Egypt continues to reject the forced relocation of Palestinians from their homeland to Sinai or elsewhere.
He added that Wietkov’s unemployment claims reflect a lack of understanding of how Egypt’s official statistics agency calculates unemployment. The agency tracks unemployment among job seekers aged 15 to 64 and regularly reports this data to international labor organizations and the UN. According to official records, unemployment rates have declined due to the absorption of large numbers of workers into Egypt’s informal economy.
The Informal Sector as a Buffer
El-Badawy described the informal sector as a safety net for Egypt’s local economy, allowing the state to function even during the 2011 security collapse. For years, this sector was the main driver of Egypt’s economy. The government is now working to integrate this sector into the formal economy to improve job tracking, offer transparency, and provide reliable employment data.
He also pointed to government initiatives such as raising the minimum wage and negotiating with the private sector to increase it to EGP 7,000 monthly, alongside expanded pensions and support programs starting in the 2025–2026 fiscal year. These measures, he argued, demonstrate the government’s capacity to weather economic pressures imposed by Israel and the U.S., who are allegedly using economic instability as a tool to coerce Egypt into accepting forced displacement plans for Palestinians.
Official Unemployment Figures in Egypt
Egypt’s official statistics agency tracks unemployment among those aged 15–64 who are actively seeking work. It does not include those who are not seeking employment or are unable to work—who made up approximately 43.4% of the working-age population, according to the 2023 second-quarter census.
The government aims to reduce unemployment from 6.5% in the 2026–2027 fiscal year to 6.1% by 2030.
A recent UN Development Program report on the impact of the Israeli war on Gaza predicted that Egypt will see a decline in human development indicators over the next five years (2025–2030). The report attributed this to heavy damage to Suez Canal revenues and the tourism sector, which could further strain Egypt’s economy.
A separate UN study estimated a 2.6% drop in Egypt’s GDP, reducing growth projections from 5% to 3%. It also forecast a rise in unemployment to 8.7% if the war ends, or up to 9.1% if it continues, with Suez Canal revenue losses expected to rise from $9.9 billion in 2024 to $13.7 billion.
Declining Human Development Index
UN experts expressed concern that Egypt’s Human Development Index could regress to its 2018 level, erasing five years of developmental progress. They warned that the Gaza war poses a serious threat to key sectors like tourism, supply chains, and global trade—factors that would increase unemployment and lower living standards, endangering economic and social stability.
Monthly labor and unemployment trend reports from the Egyptian Center for Economic Studies show slowing job growth across all sectors in recent years. This decline is linked to slowing non-oil private sector growth, rising costs of operations and raw materials, a weakening Egyptian pound, and a disconnect between educational outcomes and labor market needs. More than 70% of job opportunities remain concentrated in the capital, Cairo.
As of the end of the 2023–2024 fiscal year, Egypt’s labor force numbered around 31.4 million people, with a marginal 0.1% increase over the previous quarter. Unemployment dropped to 6.7% between January and March 2024.
Data from the International Labour Organization (ILO) shows Egypt’s unemployment rate in 2023 stood at 7.3% of the total workforce. ILO experts in Cairo highlighted a discrepancy between Egypt’s tracking system—which only counts active job seekers—and modern international methods that measure unemployment among all individuals within the working-age population (15–64 years old).
