After Seventeen Years of Privatization on the Nile, Are We Heading Toward A New Privatization Scheme?

After 17 years of conventional privatization, Egypt is changing course. Recently, the government proposed a new privatization scheme called the Egyptian Citizenship Ownership Program (ECOP), aimed at speeding up the privatization program, widening equity ownership, and improving firm performance. The proposed program is different¾in design, proposed implementation, institutional settings, and macroeconomic environment¾-than those implemented in transition economies during the early and mid-1990s. We argue that the ECOP is designed to solve a specific problem, the need to rapidly privatize a large number of firms in circumstances where only a few potential buyers had sufficient funds to purchase. The ECOP also provides a means of transferring these assets to the population at large, and hence it is politically acceptable and renders a practical solution to accelerating privatization of the entire enterprise sector. By giving firms to the public for free or at a nominal fee, the process is designed to give individual citizens a greater stake in the new economic system by making them owners of the assets of the country, so it also addresses the issue of economic justice.