Prominent businessmen intervened just one day ahead of the end of the parliamentary session to delay a legislative amendment aimed at toughening penalties on monopolistic practices, Gamal Essam El-Din reports One year ago and just two days ahead of the end of the parliamentary session of the People's Assembly -- Egypt's lower- house parliament -- Ahmed Ezz, a ruling National Democratic Party (NDP) heavyweight and chairman of the assembly's Budget Committee, intervened to change a government law aimed at toughening penalties on monopolistic practices. The changes on which Ezz insisted made it more difficult for citizens to provide the Competition Protection Agency (CPA) with information on monopolistic practices. Ezz justified the changes by arguing that they were necessary to protect industrialists from malicious complaints. The above scenario almost took place this year. Just one day ahead of the end of the parliamentary session on 16 June, the assembly's Economic Committee voted in favour of rejecting a bill aimed at tightening the government's grip on monopolistic practices. The bill, an amendment of 2005's law regulating competition practices known as the anti-trust law and proposed by 20 MPs belonging to leftist and Islamist forces, aimed at toughening penalties on producers and industrialists convicted of violating competition practices. The amendment proposed that offenders should face a fine from a minimum LE1 million to a maximum LE1 billion instead of between LE100,000 to LE300 million at present. The amendment also exempted offenders who take the initiative of providing the CPA with information on monopolistic practices from facing penalties. When the MPs' bill came up for discussion on 15 June, officials of the Ministry of Trade and Industry (MTI) surprised the assembly's Economic Committee by approving it. MTI's Undersecretary Hisham Ragab said the amendments go in favour of the ministry's policy of prohibiting monopolistic practices and ensuring fair competition in the market. He said there is a pressing need to stem the tide of burgeoning monopolies, especially in the cement and iron sectors, and that toughening penalties is an effective means for achieving this goal. Ragab recalled that the intervention of businessmen last year rendered MTI's amendments of the anti- trust law "meaningless". Minister of Trade and Industry Rachid Mohamed Rachid threatened last year that he would resign in objection to Ezz's rejection of toughening the penalties of the anti-trust law. Mustafa El-Said, chairman of the Economic Committee, joined forces by supporting the proposed amendments, arguing that they do not violate market economy principles. When the amendments were put to a vote, however, the majority of NDP MPs strongly objected to them. NDP MP Mahmoud Khamis, a business tycoon, described El-Said as a "narrow-minded economist who belongs to the socialist age". Khamis, a textile magnate, warned that the opposition MPs' amendments of the anti- trust law would discourage investors from expanding on their businesses at a time the country faces chronic problems of unemployment. "Egypt is in need for large- scale export-led industries competing on world market rather than a tougher trust- busting law that would pose a big threat to investments," said Khamis. NDP MP Mustafa El-Sallab, deputy chairman of the Economic Committee and another business tycoon, argued that by no means is this the right time to toughen penalties on monopolistic practices. "This is a time of a global financial crisis and what we need now is that businessmen and investors have greater access to facilities and incentives rather than face tougher penalties," said El-Sallab. He also strongly warned that the amendments could open the door for businessmen and industrialists to exchange malicious reports about each other. "These amendments would open the gates of hell against businessmen at a time they should rather be encouraged to expand on their businesses," El-Sallab said. For their part, opposition MPs stood up to the NDP's business tycoons, accusing them of voting under orders from Ahmed Ezz. Mustafa Bakri, a leftist MP, said Ezz personally intervened last year to disrupt the government's amendments of the anti-trust law. "In this year," charged Bakri, "Ezz exploited his influential position as the ruling party's secretary for organisational affairs to block the approval of MPs' amendments in parliament." Bakri went to the extent of accusing the government of Prime Minister Ahmed Nazif of spoiling NDP businessmen, doing its best to serve their needs even if this policy proved harmful to other sectors and came at the expense of fair competition in the market. Economist Mustafa El-Said argued that most Western capitalist countries were keen that monopolistic practices face tougher penalties. "We all saw how America, the leader of the capitalist world, intervened to break up the monopoly of Microsoft," argued El-Said. He urged the government of Nazif to stop spoiling monopolisers who sow the seeds of social discontent and widen the gap between the rich and the poor.
