CAIRO // As governments throughout the world intervene in private markets with costly bailouts, Egyptian economists and politicians are debating a controversial privatisation plan that would distribute state assets for free to each adult citizen.
Proponents of the Egyptian Citizenship Ownership Programme, which was introduced in November but remains under debate in parliament, hope that their proposal will finally, after nearly 18 years of stop-and-go debate, privatise the government-owned industries that have dominated the Egyptian economy since its period of centralisation in the 1950s and 1960s.
But opponents say the programme's populist pretences - it would effectively give each Egyptian over the age of 21 a "bundle" of stocks in more than 80 state-owned companies - are deceiving and amount to nothing more than a backhanded attempt to put government-owned infrastructure into the hands of wealthy investors.
"Eventually you'll end up in a situation where the ownership of the assets will be concentrated into the hands of a wealthy few," said Gouda Abdel-Khalek, chair of the Tagammu party's economic affairs committee and an economics professor at Cairo University. "Now is this just? I say definitely not. Is it efficient? Absolutely not."
The plan's designers say that nearly 18 years after Egypt first embarked on its economic reform programme in 1991 on the advice of the International Monetary Fund, the Egyptian government has managed to part with only 15 companies out of a total of 314. Such a slow rate of privatisation for nearly two decades prompted a shift in thinking among Egypt's top economic minds, said Bill Megginson, an expert on privatisation and a finance professor at the University of Oklahoma. Prof Megginson consulted briefly on the project with the Egyptian government two months ago.
"They've privatised only 15 companies in 18 years, each one of which has been a battle, each one of which has opened the government of the day to criticism," said Prof Megginson. "They've worked, the privatised companies have improved performance, but each has been its own mini-drama."
The stated need for privatisation is never quite as controversial as the act of privatising itself, Prof Megginson said. Regardless of the economic or political circumstances and despite the preponderance of research extolling the benefits of private enterprise, the sale of publicly owned property "is always a battle", he said. "When it has been successful, the results have been positive. But they've privatised only a fraction of the state sector."
Despite details of the latest plans not being released to the public, Prof Megginson said Egypt's latest method of privatisation just might work. One merit of the programme, he said, is that Egypt's proposal improves on the failures of the privatisation strategies used by Central and Eastern European countries in the early 1990s, many of which undersold their state-owned enterprises to oligarchical investors.
Unlike those plans, each Egyptian citizen will be entitled to identical bundles of stocks from more than 85 companies. However, the amount of public shares will vary between the state-owned firms, with the government retaining larger numbers of shares in strategic sectors such as pharmaceuticals, steel and aluminium.
By maintaining government ownership in all of the companies for a provisional period, the Egyptian plan hopes to avoid the kind of ownership vacuums that caused the value of privatising companies in Eastern Europe to plummet. Analysts say the fact that Egypt has always had a market-based economy and stock is likely to make the programme more successful than previous privatisation experiments in Poland and the Czech Republic.
Yet many Egyptian politicians who are not in the ruling National Democratic Party (NDP) remain sceptical. Besides the cloud of secrecy that has hung over the plan since the early days of its development three years ago, many experts have a hard time imagining the Egyptian public as stock owners. In a country where more than 40 per cent of the population is illiterate and 20 per cent live on less than US$1 (Dh3.67) each day, it is hard to imagine Egyptians doing anything else but selling their "bundle" immediately.
"They are trying to make the people who will take shares, to treat them as a machine to make the transition of these shares to the businessmen," said Ahmed El-Naggar, the editor of the Strategic Economic Directions report by the semi-official Al Ahram Center for Political and Strategic Studies. "They will give the public sector to the people and they will sell it to the businessmen. Then they will blame the people."
Responding to such criticism, one of the plan's drafters said the terms of the proposal will prevent individuals or institutions from purchasing entire companies cheaply during the early period of open market sales. No one will be allowed to purchase more than five per cent of a previously state-owned company without special permission from the government.
"I know the Egyptian people will understand the value of these bundles. They will be very careful before they give away these shares to others," said Mohammed Omran, the deputy to the chairman of the Egyptian stock market and one of the new plan's designers. "We are telling them, this is your asset, this is your ownership, you are rational enough, you are mature enough, you understand your needs."
But if the government's plan is as uniquely democratic as its proponents say, its critics wonder aloud why the government has insisted on keeping the details of the proposal - such as which companies are slated to be privatised - a secret.
"The lack of public transparency ... the fact that the government unilaterally decides what is to be done with no national debate about the issue - all of this is increasing opposition to the programme," said Mr Abdel-Khalek
mbradley@thenational.ae
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TOURNAMENT INFO
Fixtures
Sunday January 5 - Oman v UAE
Monday January 6 - UAE v Namibia
Wednesday January 8 - Oman v Namibia
Thursday January 9 - Oman v UAE
Saturday January 11 - UAE v Namibia
Sunday January 12 – Oman v Namibia
UAE squad
Ahmed Raza (captain), Rohan Mustafa, Mohammed Usman, CP Rizwan, Waheed Ahmed, Zawar Farid, Darius D’Silva, Karthik Meiyappan, Jonathan Figy, Vriitya Aravind, Zahoor Khan, Junaid Siddique, Basil Hameed, Chirag Suri
End of free parking
- paid-for parking will be rolled across Abu Dhabi island on August 18
- drivers will have three working weeks leeway before fines are issued
- areas that are currently free to park - around Sheikh Zayed Bridge, Maqta Bridge, Mussaffah Bridge and the Corniche - will now require a ticket
- villa residents will need a permit to park outside their home. One vehicle is Dh800 and a second is Dh1,200.
- The penalty for failing to pay for a ticket after 10 minutes will be Dh200
- Parking on a patch of sand will incur a fine of Dh300
The specs: 2018 Genesis G70
Price, base / as tested: Dh155,000 / Dh205,000
Engine: 3.3-litre, turbocharged V6
Gearbox: Eight-speed automatic
Power: 370hp @ 6,000rpm
Torque: 510Nm @ 1,300rpm
Fuel economy, combined: 10.6L / 100km
Banned items
Dubai Police has also issued a list of banned items at the ground on Sunday. These include:
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Political flags or banners
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Bikes, skateboards or scooters
COMPANY PROFILE
Name: Xpanceo
Started: 2018
Founders: Roman Axelrod, Valentyn Volkov
Based: Dubai, UAE
Industry: Smart contact lenses, augmented/virtual reality
Funding: $40 million
Investor: Opportunity Venture (Asia)
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UAE currency: the story behind the money in your pockets
PAKISTAN SQUAD
Abid Ali, Fakhar Zaman, Imam-ul-Haq, Shan Masood, Azhar Ali (test captain), Babar Azam (T20 captain), Asad Shafiq, Fawad Alam, Haider Ali, Iftikhar Ahmad, Khushdil Shah, Mohammad Hafeez, Shoaib Malik, Mohammad Rizwan (wicketkeeper), Sarfaraz Ahmed (wicketkeeper), Faheem Ashraf, Haris Rauf, Imran Khan, Mohammad Abbas, Mohammad Hasnain, Naseem Shah, Shaheen Afridi, Sohail Khan, Usman Shinwari, Wahab Riaz, Imad Wasim, Kashif Bhatti, Shadab Khan and Yasir Shah.
Ms Yang's top tips for parents new to the UAE
- Join parent networks
- Look beyond school fees
- Keep an open mind
Other promotions
- Deliveroo will team up with Pineapple Express to offer customers near JLT a special treat: free banana caramel dessert with all orders on January 26
- Jones the Grocer will have their limited edition Australia Day menu available until the end of the month (January 31)
- Australian Vet in Abu Dhabi (with locations in Khalifa City A and Reem Island) will have a 15 per cent off all store items (excluding medications)
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
KILLING OF QASSEM SULEIMANI
Best Foreign Language Film nominees
Capernaum (Lebanon)
Cold War (Poland)
Never Look Away (Germany)
Roma (Mexico)
Shoplifters (Japan)
MATCH INFO
Uefa Champions League semi-final, first leg
Bayern Munich v Real Madrid
When: April 25, 10.45pm kick-off (UAE)
Where: Allianz Arena, Munich
Live: BeIN Sports HD
Second leg: May 1, Santiago Bernabeu, Madrid
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MATCH INFO
Inter Milan v Juventus
Saturday, 10.45pm (UAE)
Watch the match on BeIN Sports
At a glance
Global events: Much of the UK’s economic woes were blamed on “increased global uncertainty”, which can be interpreted as the economic impact of the Ukraine war and the uncertainty over Donald Trump’s tariffs.
Growth forecasts: Cut for 2025 from 2 per cent to 1 per cent. The OBR watchdog also estimated inflation will average 3.2 per cent this year
Welfare: Universal credit health element cut by 50 per cent and frozen for new claimants, building on cuts to the disability and incapacity bill set out earlier this month
Spending cuts: Overall day-to day-spending across government cut by £6.1bn in 2029-30
Tax evasion: Steps to crack down on tax evasion to raise “£6.5bn per year” for the public purse
Defence: New high-tech weaponry, upgrading HM Naval Base in Portsmouth
Housing: Housebuilding to reach its highest in 40 years, with planning reforms helping generate an extra £3.4bn for public finances
Election pledges on migration
CDU: "Now is the time to control the German borders and enforce strict border rejections"
SPD: "Border closures and blanket rejections at internal borders contradict the spirit of a common area of freedom"
COMPANY PROFILE
● Company: Bidzi
● Started: 2024
● Founders: Akshay Dosaj and Asif Rashid
● Based: Dubai, UAE
● Industry: M&A
● Funding size: Bootstrapped
● No of employees: Nine
MATCH INFO
Uefa Champions League semi-final, second leg result:
Ajax 2-3 Tottenham
Tottenham advance on away goals rule after tie ends 3-3 on aggregate
Final: June 1, Madrid
Mia Man’s tips for fermentation
- Start with a simple recipe such as yogurt or sauerkraut
- Keep your hands and kitchen tools clean. Sanitize knives, cutting boards, tongs and storage jars with boiling water before you start.
- Mold is bad: the colour pink is a sign of mold. If yogurt turns pink as it ferments, you need to discard it and start again. For kraut, if you remove the top leaves and see any sign of mold, you should discard the batch.
- Always use clean, closed, airtight lids and containers such as mason jars when fermenting yogurt and kraut. Keep the lid closed to prevent insects and contaminants from getting in.
Real estate tokenisation project
Dubai launched the pilot phase of its real estate tokenisation project last month.
The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.
Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.
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