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Textile industry representatives and international officials are warning that violent worker protests over low wages and rising food prices in Egypt’s textile-producing city of Mahalla al-Kobra could escalate and spread to other poor nations.
“Egypt is one of a growing number of countries where workers are suffering from a drop in [real] wages fueled by the huge inflation in food prices,” said Neal Kearney, general secretary of the International Textile Garment & Leather Workers Federation.
According to the most recent World Trade Organization estimates, Egypt’s textile exports totaled $272 million in 2005 and its apparel exports were valued at $918 million, with the U.S. and the European Union its major markets.
Robert Zoellick, president of the World Bank, warned last week that 33 countries were at risk of civil unrest because of higher food and energy prices, including Egypt, India and Indonesia. There also have been strikes at plants in Vietnam and incidents in Bangladesh.
“The recent dramatic trends in soaring food and fuel prices are poised to have a major impact on hunger and poverty across the world,” John Holmes, United Nations undersecretary-general for humanitarian affairs, said Tuesday.
Since mid-2007, food prices have soared an estimated 40 percent, he said.
“Current food price trends are likely to increase sharply both the incidence and depth of food insecurity, and as many households will spend more on food, to the detriment of other household needs,” Holmes added.
The price of rice climbed more than 50 percent in recent weeks and the cost of other food staples has more than doubled in the last four to five months, Kearney said.
Some 20,000 workers are employed in Egypt’s large state-owned mills doing spinning and weaving, and some finished garments made of good Egyptian cotton, Kearney noted. Egypt’s Textile Workers Federation is an affiliate of the ITGLWF.
About 150 workers were arrested and a 15-year-old boy was shot dead by the police during unrest this past weekend, according to news reports.
In a move to stem the crisis, Egypt’s Prime Minister, Ahmed Nazif, visited the Mahalla al-Kobra plants on Tuesday and promised to deal with the wage and social demands of the textile workers. He approved a 30-day bonus for the workers and promised to boost wages; enhance transportation, health and medical services, and increase flour supplies to bakeries in the town.
This story first appeared in the April 10, 2008 issue of WWD. Subscribe Today.
Kearney said last year textile workers went on strike seeking “higher justified claims,” and added their demands were settled after President Hosni Mubarak interceded.
A Middle East analyst who tracks Egypt’s economy said there are calls for a nationwide strike slated for May 4.
“It’s going to be an evolving…situation,” said the analyst, who asked not to be identified.
Kearney said there was a strike last week at Nike plants in Vietnam. He added that workers got a 13 percent wage increase in January, but inflation in Vietnam rose 16 percent in February and almost 20 percent in March, wiping out the increase.