Egyptian Investment Minister Mahmoud Mohieldin after nearly two decades of selling off state-owned assets, Egypt's controversial privatization program is slowing down and shifting its focus
In an interview with The Wall Street Journal, Mr. Mohieldin denied the privatization campaign was being abandoned. Instead, he said, the state would focus on managing and reforming the remaining companies it had offered up for privatization under what Mr. Mohieldin called an "asset-management program for state-owned enterprises."
At stake are 149 remaining state-owned companies, some of which Mr. Mohieldin said are in no condition to attract interest from private investors.
"There are companies that are in trouble, and no private-sector company can handle the cost of restructuring them," Mr. Mohieldin said.
In recent years, Egypt touted its privatization drive as one of its key strategies for revitalizing its lumbering, centrally controlled economy. But that effort largely foundered amid public worry over job losses caused by selling off state industries to private investors.
A British-educated economist who has headed the ministry of investment since it was created in 2004, Mr. Mohieldin is one of the original architects of Egypt's shift from a centralized, state-focused economy to a more free-market model. When Egypt first launched its privatization push in the 1990s, high-value companies such as state cement manufacturers prompted dramatic international bidding wars.
But the pace has slowed in recent years after the most attractive and profitable firms were sold off. Many Egyptian workers have come to view the process with open suspicion.
"The strategy of the past—selling 'lame ducks' to strategic investors—didn't really prove recently that this is the best way," Mr. Mohieldin said. "There is a great deal of social cost associated with it. There are concerns with the required action by any efficient private sector in terms of making many workers redundant or (putting) new discipline in the workplace that could really cause some trouble."
As the public face of the privatization push, Mr. Mohieldin admitted that his policies have become deeply unpopular here.
"Even in some of the developed capitalist countries, the issue of privatization was never popular," he said. "I didn't really see any demonstrations with people raising banners or wearing t-shirts that say, 'I love privatization,' or 'I love Mrs. Thatcher,' because of what she did in the U.K."