CAIRO: Several leading economists attacked the Ministry of Investment s (MOI) privatization program during a round table discussion Tuesday, claiming sales of government assets have lacked transparency and have yet to be proven beneficial to the economy.
In the seminar organized by the Development Partners Center, Ahmed El Naggar, senior economist at Al-Ahram Center for Political and Strategic Studies, said it remains unclear just how much privatizationhas added to the Egyptian economy. Privatization proceeds are calculated by MOI as part of the over all foreign direct investment (FDI) figure, but little information is available about the performance of companies after their sales.
According to MOI, privatization revenues accounted for about 15 percent of the $6.1 billion (LE 35 billion) in FDI recorded in FY 2005-6.
El Naggar also criticized the declining supervisory role of the Central Agency for Public Mobilization and Statistics (Capmas) due to its lack of independence.
MOI ran into heavy public criticism in 2006 for its role in finalizing several transactions including the LE 589 million sale of Omar Effendi to Saudi Arabia s Anwal and the LE 9.2 billion sale of Bank of Alexandria to Italy s Sanpaolo IMI Group.
Speaking on behalf of MOI, Senior Privatization Advisor Mohamed Hassouna said controversy arose regarding the sales of about 15 companies out of 250 transactions in 2006, adding the number shows the program has been run under strict transparency guidelines.
Hassouna said each sale conducted or facilitated by the ministry requires the participation of governmental and independent valuation committees alongside the Ministry of Finance and Capmas.
In late January (MOI) denied news reports of its plans to privatize 100 fully and partially state-owned companies in 2007 including Eastern Tobacco, North Cairo Mills, Delta Fertilizers and Heliopolis Housing. In a statement, Minister of Investment Mahmoud Moheiddin said privatization announcements are issued only after companies are prepared individually.
Ghali: inflation rate to decline within a few months
Minister of Finance Youssef Boutros Ghali blamed the continuing rise in the inflation rate on the rise in global energy prices, adding he expected the down trend to begin within a few months.
Ghali s comments came during his meeting this week with the newly-formed Egyptian-American Business Association. The inflation rate reached 12.4 percent at the end of December, up 0.2 percent from November. Another increase in January s number would mark the 10th consecutive month the rate has risen.
Regarding the consistently low ranking of Egypt s economic climate by global organizations such as the World Bank, Ghali said the reports hold little credibility because they are based on standards set on paper and not the actual implementation of reforms. Ghali criticized Egypt s 165 ranking out of 175 countries on the World Bank s Ease of Doing Business Report, coming in behind less stable countries such as Iraq at 145, Sudan at 154 and Afghanistan at 162.