CAIRO: In 2008, Egypt was labeled by the World Bank as “the world's top reformer” and was praised for an unprecedented wave of economic liberalization under supervision of former Prime Minister Ahmed Nazif. However, as the old regime of former President Hosni Mubarak fell, the shady practices involved in this privatization process becomes increasingly visible. More than a dozen former associates of the Mubarak regime are now facing trial for their involvement in corruption that went along with the privatization of formerly state-owned companies. The scandals extend beyond Egypt's boundaries. International banks as well as the International Monetary Fund (IMF), the World Bank, and USAID are accused of being involved in the “sell-out of the Egyptian public sector.” The British-based HSBC bank is the most important European investment bank in Egypt. Among the leading members of the old government accused of corruption are former investment minister Mahmound Mohieldin and ex-trade minister Rachid Mohamed Rachid. Both were former directors of the Egyptian board of HSBC. at the height of the privatization policies under former Prime Minister Nazif, both Rachid and Mohieldin supervised a series of land sales and privatizations. According to the Bureau of Investigative Journalism, HSBC raised more than £450 million for Egypt's two most important real estate developers. It was for Palm Hills Development, one of Egypt's most important real estate agencies. The company bought up formerly state-owned land that was grossly undervalued. In 2006, Palm Hills Development bought up 960,000 square meters of formerly state-owned real estate below market price. The deal was supervised by former housing minister Ahmed El-Maghrabi, who happened to be a shareholder in a Palm Hills parent company. El-Maghrabi's cousin, ex-transport minister Mohamed Mansour, is also a shareholder in Palm Hills' parent company, while Mansour's brother is Palm Hills' chairman. Maghrabi is now in custody awaiting trial. The involvement of HSBC in the Egyptian corruption scandals is not an isolated phenomenon. The driving forces behind the privatization process are the World Bank, the International Monetary Funds as well as USAID. The current investigations have shed an unfavorable light on these institutions. The World Bank, the African Development Bank and USAID supervised the restructuring of Egypt's financial sector, which led to a total loss of 8.7 billion US dollars. Last month, Egypt´s general prosecutor Abdel Meguid Mahmoud froze the assets of leading politicians involved in the privatization programs. All of them had closely cooperated with the World Bank, the IMF and USAID. Criminal investigations have been opened against former Finance Minister Youssef Boutros-Ghali, who oversaw the implementation of Egypt's economic reform. Ghali was also head of the International Monetary and Financial Committee of the IMF. Another person under investigation is former investment minister Mohieldin. He happens to be the World Bank managing director. Both, Boutros-Ghali and Mohieldin are currently out of the country. The involvement of leading international financial institutions in the Egyptian corruption scandals raises questions on their accountability. While individual Egyptians might be punished, the institutions involved in the sell out of the Egyptian public sector seem to escape the public eye. BM
