"Egypt is preparing legislation that would give citizens a stake in dozens of public sector companies in a move designed to address popular misgivings about the state's privatisation programme. [The proposal is that] all Egyptians above the age of 21 would receive a certificate of ownership of shares in a range of companies owned by the state. In a country with a socialist legacy from the 60s and with widening income disparities in recent years, privatisation has come to acquire a bad name, and there are frequent accusations that state companies are being sold off to government cronies and foreigners at bargain-basement prices. Analysts say that by transferring ownership of the assets to the general public, the government will make privatisation more popular. "This will push privatisation much further because it will eliminate all the problems and accusations that companies are being sold cheaply," said Aladdin Saba, chairman of Beltone Financial, an investment bank. "A foreign investor who wants to buy will have to make a tender offer in the stock exchange. There will be no issue over price or accusations that anyone took a bribe or that public assets are being under valued."There's some precedent for this kind of thing, including the Alaska Permanent Fund dispersing oil income on a per-capita basis to state residents, and Voucher Privatization in Russia and Eastern Europe (with mixed results). But there is dramatically more opportunity here for what I call Percapitization, the per-capita privatization of state and common assets -- including land, mineral rights, state-owned enterprises, and more. Imagine the percapitization of organizations like PEMEX in Mexico, thus distributing the ownership of this vast business among all the peoples of the country -- unlike prior privatizations, for instance Telmex.
11 November 2008
Percapitization ~ Bold Egyptian Privatization Move
Very exciting to read today's FT story by Heba Saleh in Cairo that Egypt to hand out stakes in state assets. This means: