Abdel Rahman Mohamed - Cairo
A few days ago, the Egyptian government adopted fundamental amendments to the Egyptian Sovereign Law, to fortify the contracts concluded by the Fund against judicial appeals from a third party.
The amendments introduced by the government to the draft law establishing the sovereign fund last Thursday stipulated that lawsuits for the invalidity of contracts concluded from the fund, as well as decisions or actions taken on the basis of those contracts, should be filed only by the contracting parties and not others.
These amendments also specify in detail that only the fund and the owner alone are entitled to appeal the decision of the President of the Republic to transfer ownership of public assets to the sovereign fund, or the measures taken based on this decision.
According to economic experts, it is with these amendments that the state’s sovereign fund has become fully immune to accountability, official and popular oversight, and legal prosecution, which they considered a fatal mistake that opens the door to suspicions of corruption and wasting public money.
In mid-2018, the Egyptian Parliament had passed legislation to establish a sovereign fund in the name of the "Egypt Fund", with the aim of exploiting the country's assets and cooperating with Arab and international institutions and funds.
This legislation gives the Egyptian President Abdel Fattah El-Sisi the right to transfer the ownership of any of the untapped assets owned by the state to the fund or any of the funds that he establishes.
According to official statements and local reports, the target capital of the fund is 200 billion pounds (12.5 billion dollars), of which 5 billion pounds (312 million dollars) is paid, while Sisi predicted in his statements that the size of the fund will reach unprecedented numbers, reaching trillions of Pounds.
Tight fist
The economist Abdel Hafez Al-Sawy considers that the sovereignty of the sovereign fund against accountability and appeals comes within the framework of the authority's insistence to tighten its grip on economic capabilities.
In the context of talking about the fund, its nature and its objectives, Al-Sawy sees in his talk to Al-Jazeera Net that there is a state of lack of transparency surrounding the position. The sovereign funds usually come in the context of a financial surplus, through which the state seeks to achieve its interests abroad, but Egypt does not have those financial surpluses .
He pointed out that Egypt suffers from a financing gap in its public budget, amounting to 438 billion pounds (24.5 billion dollars), which is collected through borrowing from home and abroad, as well as a cumulative public debt, amounting to 3.4 trillion pounds at the local level and 92.1 billion dollars at the external level. .
He pointed out that the fears of this legislation are a precedent to the amendments that strengthened his immunization, as merely establishing it with a special law despite the presence of thousands of funds and special accounts established within the framework of existing laws, indicates his privacy, based on an exception to government regulations and laws, and exceeds the control of the House of Representatives.
Article 5 of the Fund Law gives the right to seize the assets of public companies and institutions owned by the state privately, whether those assets are exploited or unexploited, as the article states that the President of the Republic may transfer ownership of those assets to the fund.
Great misfortune
In turn, sees the establishment of this fund is another form of privatization and the destruction of the public sector in Egypt by selling its facilities.
In his speech to Al-Jazeera Net, Shaheen considers that fortifying the President’s decisions regarding this fund is a “great calamity” that cuts the way for any popular interaction with the judiciary, as he previously got to stand before the state selling to Omar Effendi and others when citizens complained and obtained provisions stopping state efforts.
The economist adds, "Sisi wants to manage the economy in his own way as he wishes without interference, control or accountability, and these amendments open the doors of corruption wide and portend a greater deterioration of the country's economy, and it is not possible to expect a positive return to it, the role of the state is to attract investments and provide the necessary environment for that, not sell Origins of the state. "
As for the fund’s sources, the economic journalist, Amr Khalifa, confirms that there is no clear information on this, saying that it is possible for the government to depend on the returns expected from the launch of 23 public sector companies on the stock exchange, which the government announced more than a year ago.
Khalifa said in his interview with Al-Jazeera Net that what was announced from the estimates of the issued capital of the fund (equivalent to $ 312 million) and the target (equivalent to $ 12 billion) is a weak amount among the current sovereign funds that reach about $ 800 billion in the Abu Dhabi Fund and $ 600 billion fund Sovereign Kuwait.
Khalifa believes that the purpose of launching the new fund is to expand support for the implementation of new projects for companies affiliated with the Egyptian armed forces by direct order, to expand the hegemony over the Egyptian economy without supervision or accountability.
Continued oversight
On the other hand, the economist Abdel Nabi Abdel-Muttalib believes that the importance of the Egyptian sovereign fund depends on its statute and its work rules, as it aims to assemble the management of all untapped Egyptian resources, as well as state-owned and untapped enterprises, or placed under the possession of some citizens without a legal basis .
In his interview with Al-Jazeera Net, Abdul-Muttalib believes that the fund may be able to recover the assets of the country it seized from some without a legal basis, as well as collecting the state's dues in exchange for the usufruct granted to some as a result of the exploitation of mines, quarries and others.
The economist expects that the fund will be a magnet for some major investments in the fields of asset management and achieve better returns for the state’s resources, excluding that the recent amendments to its law will lead to lifting all forms of oversight of its business and decisions.