Out of Control Policy Blog

Privatization in the Arab World

A welcome read on privatization in the Arab world from the Lebanon's Daily Star:

    Liberalization and privatization have become familiar phrases in the Arab world over the past 10 years. After decades of socialist-oriented economies, several Arab countries have decided to jump on the bandwagon of freewheeling business thinking, opting to sell some of their government controlled assets to the private sector.

    Morocco and Egypt are the best examples of countries in the Middle East that have aggressively pushed for economic liberalization programs. But very few people realize that privatizing companies will not happen at the push of a button. There are certain prerequisites for privatization, such as new laws and regulations - and a serious liberalization program.

    International and regional consulting firms were set up to provide assistance and advice to governments determined to privatize their state-owned assets. Kamal Shehadi, who obtained his Ph.D. from Columbia University, is an economist who has decided to use his broad experience - acquired from prestigious research institutes - to set up a consultant company that specializes in privatization and regulation of telecommunication, post, transport and energy in the Arab world.

    [...]

    Shehadi firmly believes that the region will not move forward economically if the liberalization of most state-owned institutes is not implemented. "Liberalization and privatization will bring investments into the countries and create jobs for the educated youth."

    Liberalization and privatization of the telecom sector is at the core of Shehadi's thinking, as he believes the IT sector has a very promising future in the region.

    [...]

    Shehadi recalls that most Arab states looked with suspicion at calls for liberalization and privatization because they feared the loss of the infrastructure. "Some of the Arab states were under the impression that liberalization and privatization only worked in Europe and North America." He added that Arab states were not even aware of the developments that took place in South American, East Asia and some countries in Africa. "Some of the Arab states were reluctant in the beginning to push for liberalization because they wanted to protect their vested interests in some institutions."

Read the full article here.

Leonard Gilroy is Director of Government Reform


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