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Al-Ahram Weekly 14 - 20 September 2000 Issue No. 499 
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Published in Cairo by AL-AHRAM established in 1875 |
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Al-Ahram Weekly 14 - 20 September 2000 Issue No. 499
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| Published in Cairo by AL-AHRAM established in 1875 |
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Egypt Region Interview International Economy Opinion Culture Travel Living Sports Profile People Time Out Chronicles Cartoons Letters Bat bat, ping-pong
By Aziza Sami
With political tensions between the US and Egypt riding high the one question on the lips of administration officials in Washington tends to be a variant of "what possible use is Egypt to the US when it is not performing in the Middle East peace process to America's satisfaction?" The government has decided that consumer cooperatives should once again fall under the supervision of the Ministry of Public Enterprise after a brief period during which they had been administered by the Ministry of Supply. The move follows a court verdict absolving Edge, the private sector company that had leased 51 consumer cooperatives from the Ministry of Supply, from accusations of financial shenanigans involving the drawing up of contracts with the ministry, charges that had the support of the current minister, Hassan Khedr.
The rationale behind the leasing deal was simple: the private sector was invited to run these co-operative stores in a manner that would ensure that basic food commodities would be provided to low income groups at a reasonable cost. The whole scheme was the brainchild of the previous government, and was initiated by the then minister of internal trade and supply, Ahmed Guweili. But what, then, are we to make of the current manoeuvring around the Ahram 2000 chain, as the leased co-ops came to be known?
The issue, in the end, should not really concern which ministry oversees the co-ops but the manner in which they are to be run. The initiative to upgrade the government owned network of cooperative shops to meet the increasingly competitive demands of the retail market was the brainchild of Guweili, a minister who retained, throughout his time in office, a degree of social vision and who appeared keen to use his position to devise means of implementing that vision. The plan was simple enough -- upgrade the cooperatives affiliated to the Holding Company for Food Industries by using foreign assistance funds and by leasing such operations, where appropriate, to the private sector.
Edge, jointly owned by Sainsbury's and the Nasharti group, whose policy of discount pricing shook the market to the core last year through the Sainsbury's chain, had bid successfully to operate 51 of these government stores.
The experiment, though, followed a period of quite astonishing mismanagement of the cooperatives' assets by the holding company affiliated to the ministry of public enterprise. It was, then, essential that the cooperatives undergo intensive financial restructuring, which is precisely what Guweili, as minister of supply, was doing when he leased the co-ops from the Ministry of Public Enterprise. It was a process, though, that came to an abrupt end when Guweili was excluded from government in last October's reshuffle. The new minister, Hassan Khedr, had little if any enthusiasm for the Ahram 2000 experiment. Accusations of irregularities in the drawing up of the leasing contracts began to emerge, and losses spiralled to LE200 million for last year alone.
And now the cooperatives have been returned to the ministry of public enterprise, which is likely to be a first step towards their eventual privatisation although, predictably, this has not been clearly spelt out. Nor is anyone telling what the fate of the Ahram 2000 chain will be.
It would, though, be a compounding of previous mismanagement if the cooperatives were to become yet another victim of the ping pong policy reversals that have come to characterise the performance of the present cabinet. The truth is, though, that following the cabinet reshuffle neither the ministries of public enterprise, nor of supply, have come up with a commercially viable plan for the co-ops. For whether they are privatised, or left to the government to run, restructuring and a reevaluation of the assets and losses of the Holding Company for Food Industries is an urgent priority.The as yet short history of Ahram 2000 has shown that it provides a potentially valuable service, particularly in its targeting of lower income groups. The experiment, in which the private sector and the government have joined hands to provide the ordinary public with decent service at a price it can afford, and the principle that this denotes, are well-worth upholding. Let us hope they do not become another casualty of inter-ministerial administrative wranglings.
