SOLIFEM is a new project of the International Labour Organisation (ILO), funded by the European Commission Directorate-General for Neighbourhood and Enlargement Negotiations (DG-NEAR), which will support the transition from the informal to the formal economy through tripartite social dialogue in Arab States, with a particular focus on Algeria, Egypt, Lebanon and the Occupied Palestinian Territories.

According to ILO’sTransition from the Informal to the Formal Economy Recommendation, 2015 (No. 204), the term “informal economy” refers to all economic activities by workers and economic units that are not covered or insufficiently covered by formal arrangements. Recognizing that the high incidence of the informal economy in all its aspects has a negative impact on the development of sustainable enterprises, public revenues and governments’ scope of action, particularly with regard to economic, social and environmental policies, the soundness of institutions and fair competition in national and international markets, members should implement laws and regulations, policies and other measures to facilitate the transition to the formal economy.

Those measures should prove, among other things, the generation of decent jobs in the formal economy, the establishment of an appropriate legislative and regulatory framework, the promotion of a conducive business and investment environment, the organization and representation of employers and workers to promote social dialogue, the promotion of equality and the elimination of all forms of discrimination and violence at the workplace, the promotion of entrepreneurship, micro, small and medium-sized enterprises, and other forms of business models and economic units, such as cooperatives and other social and solidarity economy units.

In this respect, an analysis of ILO shows that:

• Many countries in the European Union's (EU) Southern Neighbourhood continue to suffer the lasting effects of past major crises (the global recession of 2008, the Arab Spring of 2011 and the impact of the COVID-19 crisis). These countries still not have created sufficient job opportunities, that are often concentrated in the public sector or in low-productivity sectors, including the growing informal economy. Socio-economic reforms have largely failed to promote job-rich private sector growth at a time when public sector employment is contracting.
• Informal economy includes a lot of different situations, but most countries have in common high unemployment rates, making unemployment in the Southern Neighbourhood among the highest in the world.

Figure 1 - Youth unemployment in Middle East and North Africa and globally (%).

• Youth and female unemployment rates are two to three times higher than overall unemployment rates, with youth unemployment (aged 15-24) exceeding 25%. Youth unemployment is particularly high in the Occupied Palestinian Territories, Algeria, Jordan and Tunisia, and somewhat lower, but still relatively high, in Egypt and Lebanon.
• Youth employment in the Middle East and North Africa has a gender dimension. Unemployment rates among young women in the region are 80 % higher than those of young men, compared to a global average gender differential of 20 %. According to recent ILO data (2017, 2018), labour market participation of young women is particularly low in Algeria, Egypt, Lebanon and in the Occupied Palestinian Territories. As highlighted in the recommendations of the ILO's Taqeem Initiative (Taqeem means "evaluation" in Arabic, and The Taqeem Initiative is a partnership between ILO and International Fund for Agricultural Development (IFAD) as part of an IFAD-financed project, aimed at improving employment opportunities for young people and promote women’s empowerment in the Middle East and North Africa region), gender equality is a key concern for improving the labour market situation of women in this area.

Faced with this situation, SOLIFEM project, based on tripartism and social dialogue, seeks to work closely with national constituents to develop an integrated strategy to guide the transition from informality toward formality, with a particular focus on women and youth.

The target groups of the SOLIFEM project are national tripartite social dialogue institutions, representative organisations of employers and workers (the social partners), ministries of labour and other relevant ministries and institutions, as well as membership-based organisations in the informal economy, including cooperatives and other social economy organisations (SSE), in the Southern Neighbourhood countries.

Other stakeholders of the project include: representatives of regional and local authorities of the Southern Neighbourhood countries, partners at regional level, such as the European Economic and Social Committee (EESC), the Union for the Mediterranean (UfM) and regional social partner organisations such as the Arab Trade Union Confederation (ATUC) and BUSINESSMED, the Economic and Social Council of the Arab League, as well as international partners such as the International Trade Union Confederation (ITUC) and the International Organisation of Employers (IOE).

The project experiences will be shared across the Southern Mediterranean region to let other countries, especially Morocco, Tunisia, Jordan, Libya, Syria, to strengthen their social dialogue and policy frameworks on the transition from the informal to formal economy.

“The Confédération générale des entreprises algériennes (CGEA) welcomes the SOLIFEM project. It deals with issues that are a priority in Algeria and  for the region. This project will provide an interesting platform for dialogue and exchange of experiences between the countries concerned and the ILO experts towards  formalisation and employability. The CGEA, as the main employers' organisation in Algeria, will be an important partner in this project and is ready to contribute to its successful implementation”.

 The Federation of Egyptian Industries (FEI) values this new project that address a critical challenge in Egypt, integrating informal activities within the formal economy: “[w]e believe in the importance of social dialogue as one of the best tool to reach to effective solutions. The FEI is ready to cooperate with the project to support the formalization of SMEs integrating them to different value chains in relevant sectors which will have gains both for the enterprise as well as for the national economy. We are counting on the project to help in generating knowledge, sharing expertise, developing and testing innovative practices and strengthen policy dialogue and coordination between governments, workers’ and employers’ organizations, and other key stakeholders, on promoting formalization and boosting skills and employability for youth and women”.