El Sisi to pri­va­tise and list com­pa­nies run by mil­i­tary on Cairo stock mar­ket

The National - News - - NEWS - HAMZA HENDAWI

Egypt’s plans to pri­va­tise com­pa­nies owned and run by the mil­i­tary could put to rest per­sis­tent ques­tions about their trans­parency, op­er­at­ing rev­enue and prof­its.

But ex­perts and Pres­i­dent Ab­del Fat­tah El Sisi agree that it is likely to take years for them to be listed and traded on Cairo’s stock mar­ket.

Mr El Sisi an­nounced the pri­vati­sa­tion de­ci­sion in tele­vised com­ments on Thurs­day.

“These com­pa­nies must be listed on the bourse and of­fer Egyp­tians a chance to own shares in them,” the pres­i­dent said.

He sug­gested that the process might take some time. His five years in of­fice have wit­nessed stag­ger­ing growth in the mil­i­tary’s eco­nomic ac­tiv­ity, with sig­nif­i­cant for­ays into ar­eas such as ad­ver­tis­ing, film pro­duc­tion and im­ports.

Mr El Sisi, a for­mer army chief, sought to re­as­sure his na­tion of 100 mil­lion peo­ple that the mil­i­tary’s role in the econ­omy was not in­tended to side­line or weaken the pri­vate sec­tor, and re­newed his call for busi­ness­men to come for­ward and part­ner in projects with the mil­i­tary.

The pres­i­dent’s com­ments come af­ter al­le­ga­tions of cor­rup­tion against the mil­i­tary by a busi­ness­man liv­ing in self-im­posed ex­ile in Spain who posted a series of video mes­sages on­line that went vi­ral. Mr El Sisi de­nied the al­le­ga­tions in tele­vised com­ments to the na­tion in Septem­ber.

There has been a flurry of of­fi­cial as­sur­ances since then that the coun­try is on track to achieve pros­per­ity af­ter years of po­lit­i­cal tur­moil and vi­o­lence that came af­ter a 2011 pop­u­lar upris­ing that top­pled long­time ruler Hosni Mubarak. Crit­i­cism of govern­ment poli­cies and se­ri­ous probes into claims of cor­rup­tion or mis­man­age­ment have also been en­cour­aged.

“We are not per­fect,” Mr El Sisi de­clared on Thurs­day, urg­ing the staunchly pro-govern­ment par­lia­ment to thor­oughly in­ves­ti­gate cor­rup­tion al­le­ga­tions and pub­li­cise their find­ings.

The Egyp­tian mil­i­tary’s eco­nomic ac­tiv­ity can be traced back to the mid-1950s when fac­to­ries were built to pro­duce mu­ni­tions and ba­sic firearms. The in­dus­try be­gan to di­ver­sify and ex­pand un­der the late pres­i­dent An­war Sa­dat who sought to make the mil­i­tary eco­nom­i­cally self-suf­fi­cient. The mil­i­tary built an eco­nomic em­pire dur­ing Mr Mubarak’s 29 years in of­fice.

In 1997, Mr Mubarak placed the mil­i­tary in charge of all un­used land in Egypt.

But the big­gest and quick­est ex­pan­sion of the mil­i­tary’s eco­nomic ac­tiv­ity came af­ter Mr El Sisi took of­fice in 2014, a year af­ter he led its re­moval of an elected but di­vi­sive pres­i­dent, Mo­hammed Morsi of the banned Mus­lim Broth­er­hood.

Mr El Sisi said in De­cem­ber 2016 that the mil­i­tary ac­counted for up to 2 per cent of the coun­try’s GDP, a fig­ure widely thought to be too low. Egypt’s

GDP that year was $336 bil­lion (Dh1.234 tril­lion), the World Bank said.

How­ever, the mil­i­tary’s eco­nomic role was big enough to prompt a warn­ing in 2017 from the In­ter­na­tional Mon­e­tary Fund, which said the de­vel­op­ment of the pri­vate sec­tor and job cre­ation “might be hin­dered by the in­volve­ment of en­ti­ties un­der the Min­istry of De­fence”.

Mr El Sisi has said re­peat­edly that mil­i­tary-owned busi­nesses pro­vided hun­dreds of thou­sands of jobs.

Pub­lic list­ing of mil­i­tary com­pa­nies might prove a lengthy and com­plex propo­si­tion, said Ab­del-Qader Ra­madan, head of eco­nomic re­port­ing at Mas­rawy, a news web­site.

“In prin­ci­ple, the idea of list­ing mil­i­tary-owned com­pa­nies is a good one. But it’s a dream that will take a long time to come true,” Mr Ra­madan said.

Some ques­tion whether mil­i­tary-owned com­pa­nies can go pub­lic. “Will there re­ally be any trans­parency re­gard­ing their bud­get?” po­lit­i­cal and me­dia an­a­lyst Hisham Qas­sim, a critic of the govern­ment’s poli­cies, wrote in a Face­book post.

His five years in of­fice have wit­nessed stag­ger­ing growth in the mil­i­tary’s eco­nomic ac­tiv­ity

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