Privatization in the shadow of militarism is a quick killing of Egyptians in the fire of poverty and unemployment

In light of the lack of popular influence and the people’s departure from the military government’s calculations, the gambles of the foolish government of the upside down Abdel Fattah al-Sisi are increasing to manipulate Egypt’s capabilities and endanger its national economic security, in light of unprecedented military control and repression, Egypt’s strategic companies and factories are being neglected for sale and privatization, in order to attract aid And financial loans from abroad from the International Monetary Fund and international financial institutions.

Main sectors

Two days ago, a statement from the presidency of the coup cabinet revealed a study prepared by the Cabinet Information Center that suggested a set of mechanisms to empower the private sector, including identifying the main sectors in which the state will continue, the sectors that will exit from it, and the sectors from which a gradual exit will be made, in addition to reforming The public sector by keeping major companies in strategic and more priority sectors, and abandoning companies in less priority sectors.

monetary fund

What is striking is that what the study concluded represents almost the same as what was recommended by the International Monetary Fund in its report issued last July, on the final review of the agreement with the government of the foolish coup d’état Al-Sisi last year. That state-owned companies or agencies play a role, in a way that allows the state to exit from other sectors, and thus more gains related to the entry of the private sector into those sectors and increase its productivity.

The emergence of the Egyptians

The government announcement comes in conjunction with the new cooperation planned with the International Monetary Fund, within an economic reform program that inflamed the emergence of Egyptians with taxes, fees and high prices. In general, the structural reform policies related to the field of private sector work and its encouragement, which is clearly reflected here in the trend that is now announced for the government’s exit from entire economic sectors, and the agreement between the government and the International Monetary Fund in November 2016 was linked to austerity measures such as raising the consumption tax and reducing subsidies Petroleum materials, electricity subsidies, and a reduction in government spending on wages through the Civil Service Law. On the other hand, the agreement with the Fund last year was linked to procedures related to the so-called structural and legislative reform related to the private sector.

Privatization of state companies

On the other hand, the 2016 agreement included, with regard to privatization, a mere offering of shares in a number of government companies, while the trend announced today includes exits from entire sectors.

The exit step is aimed at entire sectors, regardless of the mechanism of implementation, in terms of reducing the financial burden on the state with regard to spending on those sectors that it intends to exit from, allowing the state to spend more on the sectors in which it intends to stay and invest in, most likely infrastructure, and allow the flow of Foreign investments in those sectors in the event that their assets are offered for acquisition by any mechanism on the other hand.

Economic exit

According to economic estimates, the state’s exit from entire sectors of the economy represents an unprecedented step in the history of privatization in Egypt since the nineties until now, in a way that it seems that we are beginning a new exceptional stage, and it also represents a return to old patterns of privatization, such as selling to a strategic investor who owns a majority Shares and offering another percentage of shares on the stock exchange and keeping a small share in the hands of the state less than 25% to avoid the supervision of the Central Auditing Organization over the company, in preparation for selling that share later at a time that seems more appropriate to get a better price, this is just an example of the patterns of implementation of the privatization process .

other styles

Moreover, there are other patterns that do not necessarily include selling, which include, for example, rent, management and profit sharing, in order to avoid selling assets at a time that may not be appropriate to obtain an appropriate price for public property.

Since Egypt received all the loan installments that were agreed upon with the Fund last year, the announcement of the state’s exit from certain sectors despite being linked to an agreement with the Fund is considered technical cooperation, unlike the situation in the nineties, for example, with the emergence of the privatization program at the time that came Commissioned by the World Bank and the Fund together, and accordingly half of the external debt is written off, within an agreement that stipulated disposal by sale from public companies for whatever reasons.

Principal Investor

Amr Adly, assistant professor of political economy at the American University in Cairo, believes, on the other hand, that this announcement of the exit from entire sectors, if actually implemented, would mean the need to return to the pattern of the main investor in offering companies, that is, this investor who acquires a majority or all of the shares. Ownership of the company according to an agreement with the government, because the pattern of offering small shares in the stock exchange cannot work for many sectors, investors will be reluctant to enter it as long as they see that the government intends to retain the majority share for itself and then management in its companies.

On the other hand, the step that may represent a major change in this context is for this announcement to include the state’s exit from the utility sectors, because this requires legislative amendments, while the current legislative framework only allows the transfer of ownership of business sector companies to the private sector.

According to the report of the Fund, the state owns more than 300 companies, including companies that fall under the public business sector, the public sector, companies owned by the armed forces and nearly 645 companies or projects with the private sector, in addition to 53 economic bodies, and the new announcement collides with facts on the ground that the state It was very slow in all the similar trends it announced, starting with the announcement of a program of proposals for government companies, of which only a small part was implemented, and the announcement of offering companies affiliated with the armed forces to the private sector, which did not happen.

Military monopoly on the economy

The greatest danger remains in the continued militarization of the sectors of the Egyptian economy, as tenders and projects are being awarded to the military sector, which exacerbates the numbers of the unemployed and raises the prices of goods and services in large proportions, exacerbating the living crises in Egypt, as the mentality of the private sector is based on maximizing its profits only, which increases poverty in Egyptian society Thus, two fires of privatization and militarization will converge on the Egyptians, which destroys the minimum standard of life for millions of Egyptians.

Source: بوابة الحرية والعدالة by

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