Selling public sector assets was at the centre of a battle in parliament. Gamal Essam El-Din keeps score The government's privatisation programme again came under fire in the People's Assembly on Sunday, as five opposition and independent MPs grilled Investment Minister Mahmoud Mohieddin on what they called his privatisation policies which favour foreign investors and the wealthy, at the expense of the poor, and the public interest. The parliamentarians' attack against Mohieddin came in the form of interpolations (questions that must be answered) submitted by a number of leftist and Muslim Brotherhood MPs, who believe that Mohieddin is currently leading a campaign to "sell Egypt at a very cheap price". In response, Mohieddin accused his detractors of espousing "hollow slogans" that still reflect the bad socialist policies of the 1950s. "These policies are to blame for all the economic hardships we face now," stated Mohieddin, insisting that "my main task is to rectify the financial and administrative situation of public sector companies, rather than selling them to foreigners at a cheap price. This is not a matter of putting Egypt on sale, but finding the panacea for its economic woes." Spearheading the debate was leftist MP Mustafa Bakri, who accused Mohieddin of speeding up the sale of Bank of Alexandria at a very cheap price to the Italian Bank of San Paulo . This sale, Bakri claimed, was according to instructions from the International Monetary Fund (IMF) and at the expense of Egypt's development priorities. "Mohieddin decided to sell Bank of Alexandria, although he knows quite well that foreign banks never contribute money to national development projects or help support local industry," Bakri pointed out. In capitalist countries like England and France, he continued, they never dare sell public banks because of their cardinal role in the national economy. "But," claimed Bakri, "Mohieddin decided to make Egypt an exception because he is under pressure from the IMF." In another direction, Bakri accused the government of helping business tycoon Ahmed Ezz overtake the Alexandria Iron and Steel Company (Al-Dekheila). Ezz is a leading member of the ruling National Democratic Party (NDP), chairman of the People's Assembly Budget Committee and a close associate of Gamal Mubarak, President Hosni Mubarak's son who is the chairman of the NDP's powerful Policies Committee. Bakri said Ezz used his influential role in the ruling party to become the main shareholder and board chairman of Al-Dekheila company. "Eventually, Ezz merged Al-Dekheila with his private steel company, thus giving himself the upper hand and monopoly of the iron and steel market in Egypt," protested Bakri, wondering "why the government sold a profitable company like El-Dekheila in a suspicious manner to a business mogul like Ezz." Standing up to Bakri, Ezz said he bought Al-Dekheila as a strategic investor from foreign shareholders (Japanese, Germans, the African Development Bank and the International Finance Corporation). "This was not privatisation in favour of foreigners but in favour of Egyptians, who were keen that the company remain in domestic hands," retorted Ezz. Another cry against privatisation policies came from liberal-minded independent MP Mohamed El-Sadat. Like Bakri, El-Sadat accused the government of leasing the Red Sea port of Al-Ain Al-Sokhna to a company whose chairman is a close associate of Gamal Mubarak. "Despite spending more than LE2 billion for developing El-Sokhna port, the government suddenly decided to lease it to a businessman whose company has a poor record in port administration," claimed El-Sadat. This businessman, he continued, made use of his friendship with the young Mubarak to have access to the port under the BOT (Build, Operate, Transfer) system. El-Sadat also charged that Shafik Gabr, an influential investor in the automotive industry, manipulated his close links with the NDP to access highly valuable land on the northern coast. "Later, Gabr sold this land and made a profit of LE1 billion in one deal," stated El-Sadat. Noting that he has no objections to privatisation policies, the liberal MP said he strongly opposes using these policies to line the pockets of wealthy businessmen at the expense of national interests. Azab Mustafa and Gamal Zahran, a Muslim Brotherhood and leftist MP, respectively, concentrated on what they called "the worsening impact of privatisation policies on workers." They also charged that many of the privatisation deals caused much harm to the country's strategic interests and to the poor people. Mustafa singled out El-Nasr Steam Boilers Company as a case in point, asserting that the company was sold in 1994 for only $17 million despite its essential role in the nuclear industry. Worse still, Azab added, the company's new board led by a Jewish investor decided to reduce the number of workers from 1,200 to 200. For his part, Zahran focused on the woes of textile companies, criticising Mohieddin for having no strategic future vision for this industry. "The ministry led by Mohieddin did its best to undermine the textile industry, and not surprisingly the recent wave of labour strikes came about as a result," said Zahran. Meanwhile, Muslim Brotherhood MP Ibrahim El-Gaafari claimed that the government's privatisation programme resulted in putting 99 per cent of the strategic cement industry in the hands of foreigners. El-Gaafari cited the sale of five national cement companies to British, French, Portuguese and Italian investors. For his part, Mohieddin lashed out at critical MPs, noting that since he came to office in July 2004, the number of companies partially or entirely privatised stood at just 15. At the time, public sector companies were saddled with LE31.5 in debts, today "these distressing debts fell to LE10 billion," he affirmed. "I was even able to recover five public companies from the hands of the private sector, because I discovered that private investors did much harm to these companies." According to Mohieddin, the number of public companies slated for privatisation now stands at 159. "Out of this total, the ministry has been able to improve the financial and administrative conditions of 92 companies in three years," he noted. Proceeds from the three-year privatisation process topped LE33.4 billion, which includes revenues from selling companies and banks. Out of this total, said Mohieddin, LE17.2 billion were transferred to the state's treasury; LE13.8 billion was allocated to improving the performance of public sector companies and relieving their debts; while the remaining LE2.4 billion are still to be collected. The minister insisted that cement companies are still in public hands, since foreign investors in these companies do not own majority shares. Meanwhile, 98 per cent of shares of the National Cement Company are publicly owned. He added that opening the cement sector to foreign investors boosted national production to 37 million tonnes. "Only a few years ago, Egypt was a net importer of cement but now it is a main exporter," Mohieddin boasted. Within the same context, he said most of the giant banks in Egypt are still in public hands; statistics of the Central Bank of Egypt indicate that 71.1 per cent of banks are Egyptian, 18.9 per cent are foreign and 9.6 are Arab. Mohieddin noted that the Bank of Alexandria was sold because it was losing money, and emphasised that the sale was part of a long-term government strategy aimed at consolidating and modernising the banking sector. Finally, Mohieddin indicated that the government has firm control on sea ports, refuting any charges that some businessmen made use of cronyism with NDP leaders to gain access to strategic projects. In Mohieddin's words, Egypt will never go back to the 1950s and 1960s. "We are not selling Egypt; this policy protects the interests of the coming generations of Egyptians," he asserted.
