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Fight for factories: Egypt's textile workers challenge privatization
Published in Bikya Masr on 20 - 04 - 2011

SHEBEEN AL-KOM, Egypt: Dozens of angry workers gathered yesterday in front of the court building in Shebeen el-Kom where a case on the re-nationalization of the factory took place. They were heard chanting, “With our spirit and with our blood we will fight for our factory!”
The factory had been privatized in 2007 and sold to the Indonesian Investment Group Indorama. Since then, approximately 50 percent of the companies more than 4,000 workers have been laid off while production increased. Last month, the workers in Shebeen el-Kom held a 35-day long sit-in strike in order to demand that the workers that have been laid off would be rehired, higher wages tied to the rising inflation and the discharge of five NDP-affiliated managers accused of corruption and intimidation.
During these protests, the workers have been intimidated by the army, which threatened to fire live ammunition on them. Nevertheless, the workers remained and managed to get concessions on parts of their demands such as a payment increase.
Yesterday's case has been another step to challenge the corruption involved in the privatization process of state-owned factories. Since the early 1990's, the Mubarak government had pursued a policy of increased economic liberalization, pressured by the International Monetary Fund (IMF). Hundreds of formerly state-owned companies have been privatized, with devastating consequences for the country's economy.
Ahmad El-Sayed El Naggar, an economist at the Al-Ahram Center for Political and Strategic Studies, describes how American rating agencies have grossly undervalued public companies. For example, the formerly state-owned Egyptian Bottling Company was sold in 1994. The American rating agency Coopers & Lybrand estimated its value at 76 million Egyptian pounds. In the same year, Pepsi Cola International bought 77 percent of the company from the new owners for 1.340 billion Egyptian pounds.
This is just one example of the corruption involved in the privatization process. The new owners made massive profits from their sale to Pepsi. The main victims of these privatization processes have been the workers employed in these factories. The privatization of the Shebeen el-Kom textile factory had devastating consequences for the entire village, the livelihoods of hundreds of families being threatened.
However, the Shebeen el-Kom workers refuse to accept their fate and are challenging the decision to privatize the Shebeen el-Kom company in court. They are supported and encouraged by textile workers from other cities such as from Mahalla el-Kubra.
‘The workers from Mahalla and Shebeen-el Kom are united!' is one of the slogans chanted by the crowd in front of the court building. Minutes before the beginning of the court-case, dozens of workers stormed the entrance of the building in order to attend the case. A group of about officers tried unsuccessfully to restrict the entrance to the court-room, being overrun by the angry crowds. The atmosphere in the courtroom was emotional, an older woman had tears in her eyes, men were arguing angrily with the soldiers.
At that moment, a decision would be taken that could save the livelihood of hundreds of citizens of Shebeen el-Kom. However, the hearing ended before it began, and the judge decided to postpone the decision due to lack of adequate information until May 10.
While this leaves the people of Shebeen el-Kom with uncertainty for at least another month, there was a sense of relief. The audience in the courtroom was well aware of the importance of the coming decision. The re-nationalization of Shebeen el-Kom could have crucial consequences for the economic policies in post-Mubarak Egypt.
“There are many more movements for re-nationalization,” explained Ahmed Shalaby, member of the Democratic Workers party. “The re-nationalization of Shebeen el-Kom would be an important precedent for other companies.”
The Democratic Workers Party has been following the case of Shebeen el-Kom actively. Re-nationalization of privatized factories is one of its key demands. This raises a critical question about the economic policy after Mubarak. Under the Nasser's rule, Egypt had been dominated by a largely state-owned economy, which is often perceived as the root of the current corruption. How could re-nationalization be achieved without falling again the corruption-trap?
For Kamal Khalil, representative of the Democratic Workers Party, the key difference with Nasser's economic policy should be the democratic control over state-owned companies. Whereas Nasser appointed the heads of factories, making it effectively a state-capitalist regime, the new management of state-owned factories should be appointed by the workers of these factories. So far these visions of economic democracy remain only one of the countless ideas raised in post-Mubarak Egypt. While the fate of Shebeen el-Kom remains uncertain, the workers outside the court are shouting ambitious slogans towards the factory owners: “You want us to kiss our shoes, tomorrow you will be under our shoes.”

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