Abdel-Fattah Al-Jabali reads to you: The document “State Ownership Policy” (2)

A reading of the document “State Ownership Policy” (2)

Abdul-Fattah Al-Jabali

To supplement the discussion on the state ownership document that the government presented for public discussion, and after we have clarified the development of the concept of public ownership and the role of the state. The question becomes the map of public ownership in Egypt, and here the law distinguishes between state-owned assets as private property, and those owned by public property.

This property is acquired by law or by ministerial or republican decisions. Therefore, section 32 of the Constitution stipulates that public property may not be disposed of. As far as state-owned assets are concerned, it is private property, which, like individuals, is governed by the rules of civil law, while being protected from infringement. So if we want to have a public asset, it must first be stripped of its public domain. character and transferred to private property, and here it is permissible to dispose of it with all kinds of disposal, similar to the private.

From this point of view, public ownership in Egypt is large and manifold, varying between economic authorities (55 agencies) and companies in the public business sector subject to Act No. 203 of 1991, which counts 21 holding companies, including 8 holding companies operating under the umbrella. of the Ministry of Public Business Sector, followed by 119 companies.And 13 holding companies affiliated with various ministries such as aviation, petroleum, transportation, catering, irrigation, agriculture … etc.

In addition to the 43 companies subject to Act 97 of 1983, most of which are affiliated with economic authorities and some ministries and specific holding companies affiliated with ministries (14 companies followed by 91 subsidiaries), companies are subject to the provisions of Act 159 of 1981, many of which and diverse, public sector banks, development and agricultural credit, as well as Companies subject to some economic bodies, such as the Petroleum Authority, with 12 companies, the Suez Canal, with 7 companies, Military Production, with 19 companies, and others.

Not to mention the joint projects and companies, and despite the absence of an exact score of them, at the end of 2013 they reached 704 companies with a capital of 683 billion, and the public money share in it £ 64.4 billion, spread across all sectors of the national economy. In addition to the above, the economic projects in the governorates are estimated at around 2,300 projects working in many fields, including transport, services and food security.

In addition to land, real estate, buildings and intellectual property rights over thousands of works of art, books and others, not to mention the natural resources God has bestowed on our dear Egypt, as the desert, which accounts for about 94% of the country’s area, enjoys many and multiple mineral richness and has comparative advantages in terms of abundance and quality. Whether it is gold, silver, iron, manganese and phosphates, or black sand, high quality white sand and many other ores that are used in most of the technological, chemical, thermal and building materials industries..etc.

All of these are assets that can generate values ​​and cash flow that help fund the state’s budget deficit.

And given that these entities are regarded as independent entities with legal personality and have their financial and administrative independence as they are of an economic nature in accordance with the laws they regulate. The relationship between it and the state’s general budget is an ownership relationship focused on business results. And a financing relationship focused on contribution and lending. These parties were supposed to achieve the goal of their independence and to be managed on an economic and commercial basis that would enable them to achieve financial surpluses, or at least contribute to self-financing.

It therefore reduces the burden on the public budget, but it has not been achieved at all for a large number of them. These parties have rather continued to accumulate losses over the years, which has led to the intervention to refinance them with very large sums. On the other hand, the surpluses that have been transferred from some of these parties to the state’s general budget is no longer in line with the funds invested in it on the one hand, and with which the budget contributes On the other hand, these entities.

Here, the statistics point to the meager returns generated by this wealth, the non-collection of debts on these assets, the accumulation of arrears and the lack of optimal exploitation. Despite the improvements made in fiscal policy, it did not lead to increases in the state’s public revenue. On the contrary, we note that the domestic revenue of the domestic product decreased from 21% in 2013/2014 to 16% in 2020/2021.

As is well known, this income comes from taxes, allowances and other income, with a view to a structural decrease in the contribution of other income components (which comes mainly from the profits of companies, public banks, economic authorities, etc.) .

Here we note that the profits transferred to the public budget decreased from the shares of these entities from £ 71.6 billion in 2014/2015 to around £ 55 billion in 2020/2021, while revenue from the public business sector and the public sector has increased. from 3.2 billion to 11.1 billion during the same period. Mining and quarrying revenues (including gold royalties) fell from £ 1.2 billion to £ 921 million.

Here are several questions, the mechanisms of which are primarily to transfer state-owned assets to private ownership, in other words, what is the transfer mechanism and will it be done in exchange for the debt of these entities to institutions? Here arises an important issue related to the nature of these assets in terms of within the framework of the private domain of the state, as these are assets owned by the state and represented in this field by the Ministry of Finance, which manages these funds for the state’s account, and then the proceeds from the exploitation of these assets must enter the public treasury as a resource from State resources, and any deviation therefrom contradicts the principles of public finance, especially unity and comprehensiveness .


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