Despite official reassurances, the Egyptian parliament’s approval of a “fund belonging to the Suez Canal Authority” has caused a stir in Egypt, causing controversy among a backer who sees this as a “new step on the road to investment” and an opponent who refers to “a new tendency by the government to sell off state assets”. Egyptian”.
“controversial” fund.
In Monday’s session, the Egyptian parliament approved all the articles of a bill presented by the government amending some provisions of law no. 30 of 1975 which regulates the Suez Canal Authority.
The bill aims to “establish a fund owned by the Suez Canal Authority”, through which it seeks to increase its ability to contribute to the sustainable economic development of the Authority’s structures.
🛑 The objectives of the Ddl Fondo Canale di Suez pic.twitter.com/r9SPo6GMTw
— Shorouk News (@Shorouk_News) December 19, 2022
The fund aims to help enable the Suez Canal Authority to deal with crises and emergencies that arise as a result of exceptional circumstances, force majeure or bad economic conditions.
It also aims to enable the Suez Canal Authority to carry out all economic and investment activities, including the contribution of the fund, alone or with others, to the formation of companies, capital increases and investment in securities.Masrawy“.
The amendments allow the fund to “buy, sell, rent, lease, exploit and benefit from fixed and movable assets”.
The session of the Egyptian Parliament saw a state of debate between deputies on the “articles of the law”, between supporters and opponents.
For his part, the president of the Egyptian parliament, Hanafi Jabali, confirmed that the bill presented by the government “does not include any provisions concerning the canal or its sale”, noting at the same time that the state is obliged to protect, develop it and preserve it as an international waterway.
During the plenary session on Tuesday, Jabali said that “the sale, lease or investment in the Canal Fund corresponds to the nature of the funds and does not affect the Canal itself in any way, and that the Suez Canal is public money which cannot be overlooked”.
He stressed that “the Egyptian parliament is doing its best to examine the laws to preserve the country and the citizen, especially the Suez Canal Fund.”
However, some deputies, including a member of parliament, Abdel Moneim Imam, have announced their rejection of the draft law amending the “Suez Canal Authority” law in principle.
During a session on Monday, the MP said: “We are talking about 120,000 Egyptians who gave their lives to dig the Suez Canal, and we are talking about the largest source of foreign exchange, $7 billion in the general state budget, and it already has a deficit of £560 billion.”
And he continued: “How can I get to set up a fund that takes a percentage of this income to put it in the fund? It’s not enough, we have 7,000 private funds in Egypt (..)”.
#Urgent Representative Abdel Moneim Imam We are talking about 120,000 Egyptians who gave their lives to dig the Suez Canal. He asks, are we talking about the largest source of foreign exchange, $7 billion in the country’s general budget, which has a deficit of £560 billion! How do I go about setting up a fund that takes a percentage of this income to put into the fund? Not enough, we have 7,000 private funds in Egypt. Take the winning bodies, and in the budget create funds for them without the authority of Parliament to supervise their work, and leave the losing bodies to us alone! Accordingly, I register my rejection of the bill amending the law on the Suez Canal Authority in principle.
Posted by Abdelmonem Emam – Abdelmonem Emam Monday 19 December 2022
The controversy moved to social media, where activists said the amendments to the law were “a prelude to the sale of state assets”.
= Do not believe Khaled Refaat, as he spreads poison and does not see the results.. = Believe the respected Egyptian People’s Assembly, which is currently debating an amendment …
Published by Khaled Refat Saleh Up Monday 19 December 2022
The accident happened. A sad day in the history of Egypt. (The defeat passes in silence).
Published by Anwar ElHawary Up Monday 19 December 2022
A member of Egypt’s Presidential Pardon Committee, lawyer Tariq Al-Awadi, said in a post on his Facebook account, “The assets of the state belong to past generations, the current generation and future generations,” adding that “the present generation does not have (the right) to dispose of them.”
State assets belong to past generations and to the current generation and to future generations, and the current generation has no right to dispose of them.. We just have to manage them, reap the benefits and develop them..
Published by Tarek Elawady Up Monday 19 December 2022
Others believe that the fund aims to benefit from the resources of the Suez Canal and organize a new phase of investment in the country, refusing to speak of a “sale of state assets”.
🔴 Regarding the Suez Canal, before explaining, the first thing like that, talking to some, you want to consider it a threat, like a good thing is really a threat and a warning, period…
Published by Seif Mahmud Up Tuesday 20 December 2022
Sale of state property or investment?
The Egyptian writer and political analyst, Magdi Hamdan, believes that the amended articles of the law contain many “manipulations and vague and unclear sentences” that could establish “the sale of state assets or the lease of the navigation corridor of the Suez Canal” .
Speaking to the Al-Hurra website, he believes the establishment of the new fund establishes a new phase in the ‘sale of Egyptian state assets’, saying: ‘The sale of the Suez Canal is very similar to the sale of the pyramids, which it is something that everyone in Egypt rejects”.
Hamdan says, “There is a government plan to lease the Suez Canal or sell its assets, and there are directives to cover it up and not reveal the circumstances or details,” he said.
Walid Gaballah, member of the Egyptian Society for Economics, Statistics and Legislation, confirms instead that the new fund adds “to the investment arm of the Egyptian state in light of Egypt’s tendency to increase the private sector’s contribution to the process development.”
In his interview with the Al-Hurra website, he points out that there is “ambiguity and confusion” between the Suez Canal as an authority and its “fund”, which the amendments state “has the right to lease and sell its assets , not the assets of the institution”.
Gaballah says, “The new fund doesn’t control the assets of the Suez Canal, but it does control the assets to be attached to it,” he said.
What is the income of the International Monetary Fund?
In her speech, Magdy Hamdan linked the amendments to the law to the International Monetary Fund’s approval to grant Egypt a $3 billion financial aid package over a 46-month period, citing a “paragraph of the fund’s statement”.
On Friday, the Executive Committee of the Fund announced the approval of a 46-month agreement with Egypt under the “Extended Fund Facility” for a value of 2,350.17 million units of Special Drawing Rights, equal to 115 4% of the Fund’s membership fee, or about $3 billion, according to the statement. for a statementInternational Monetary Fund“.
The fund said it expects the EFF to encourage the availability of around $14 billion in additional funding for Egypt from its international and regional partners, including new funding from GCC countries and other partners through “continued sales of state assets and funding channels. traditional bilateral and multilateral creditors.
Gulf countries have deposited at least $13 billion with Egypt’s central bank since the beginning of this year to support Egypt’s economy, which brings total Gulf deposits to $28 billion, according to Reuters.
Hamdan refers to the paragraph on the “sale of state assets,” linking the parliament’s approval of amendments to the Suez Canal Authority law to the fund’s revealed direction, as he said.
But Jaballah denounces that link and says the IMF statement “determines a reality and does not create a new issue,” describing the link as “unchecked.”
“The Egyptian state has been pulling out of some sectors for years, to be replaced by the private sector, which is a trend that Egypt was gradually adopting before the Corona pandemic came to slow those steps,” according to Gaballah.
According to him, the launch of the new fund takes place in the context of “the state’s exit from a series of sectors to be replaced by private sectors”, with the aim of guiding investors after criticisms aimed at the state as “interference in the economic.”
He says: “It has nothing to do with the order to sell state assets, nor with the agreement with the International Monetary Fund”.
New box..why?
In Egypt the poverty rate, according to official data, is 30 percent of the total population of about 104 million people, according to “Agence France Presse”.
Egyptians are facing a difficult economic situation in light of the high cost of living, and the Egyptian pound has lost more than half its value against the US dollar since the beginning of this year, after the Central Bank of Egypt recently decided to adopt a floating exchange rate.
Therefore, Hamdan denounces the idea of setting up a “new fund” in light of the existence of over 7,000 private funds that nobody knows about and which contain billions of pounds and are not included in the state budget and there is no supervision over them, he said.
Hamdan says: “Every party in the country currently has a special fund, and there is no country in the world with this amount or number of funds,” considering that “there is a lot of distrust and suspicion about the new fund.”
And in 2021 the newspaper “on the seventh dayHe indicated that the number of registered private insurance funds totals 764 funds, of which the worker has reached 694 funds, as well as 70 funds in liquidation, but there are no “official final statistics for the number of private funds”. effective”.
Gaballah points out that “all funds in Egypt are supervised by the Central Auditing Agency, and a percentage of their profits and earnings is included in the general state budget.”
The success of the new fund depends on “selecting the appropriate resources and managing them appropriately to increase the revenue of the Suez Canal without affecting the shipping route or the state’s revenue in this regard,” according to Jaballah’s statement.
In remarks on Monday, Osama Rabie, head of Egypt’s Suez Canal Authority, expected the canal’s revenue to reach $8 billion in the current fiscal year, which runs from July 1 to June 30, according to Reuters.
However, Hamdan indicates that there is a real popular fear of “giving up or leasing the Suez Canal corridor” and says: “What is happening is a very dangerous issue that harms future generations, and the Egyptian government or authorities they have no right to dispose of these national assets.”
According to him, “the Egyptian authorities are paving the way for other steps to sell, grant and lease new assets to the state”, believing that “a new policy for the Egyptian government after the difficult economic situation”.
Egypt is one of five countries in the world threatened by the impossibility of paying the installments of its foreign debt which amounts to over 150 billion dollars, according to Moody’s, quoted by “Agence France Presse”.
Last August, Goldman Sachs said Egypt needed about $15 billion to pay off its debts.
