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The insured pays a flat contribution of one Egyptian Pound a month and the rest of the needed funds come from the general treasury, from fees for work permits and various kinds of licenses, and from contributions of the labor funds (2 percent of the yearly contributions). 3 In the early 1990s only 22 percent of all Egyptians benefited from the government's social welfare system (Weidnitzer 1997:13). , 7-8). 48 in areas unrelated to social security. Since the 1970s, the NOSI has deposited its reserves with the Bank of Investment and other commercial banks at a low interest rate (Azer 1995:111 and Atallah 1995:176).

The Egyptian Businessmen's Association (EBA) has estimated that the creation of eight times as many jobs as were created by the Egyptian private sector in the boom years of 1976-86 and 50 percent more than the level in the early 1990s are needed (EBA 1996:2). But not only does the economy need to produce that many NEW jobs, it also needs to find jobs for the ALREADY unemployed, who range any where between 10 and 15 percent of the labor force. The characteristics of the unemployed, as reported by Samir Radwan of the ILO, are worrisome.

When people perceive deterioration in their social condition during the liberalization process, they question the rationality of liberalization policies and the autonomy of their state. Social welfare should act as a cushion, and state expenditure on health and education should serve as an investment in human capital. A state requires well-informed, well-trained and well-paid civil servants, and it is a state responsibility to figure out how to do that with limited resources. Economic reform during the 1990s requires tremendous legislation effort, which in turn requires informed legislators with an ability to collect information, share it, and process it into law.

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