Egypt’s President Mohamed Morsi said Tuesday his government will no longer privatise state firms, in a break with a policy launched in the 1990s by his ousted predecessor Hosni Mubarak’s regime.
There will be “no more sale of the public sector, that is finished… and we will no longer do away with workers,” he said in a televised May Day speech before workers in Helwan, south of Cairo.
“Encouraging the private sector and private investments does not mean an alternative to the public sector, which must be developed,” said the Islamist president who was elected last June.
“The public and private sectors complement each other,” he said, vowing to inject investments and a “new vision” to state enterprises.
A privatisation programme launched in the 1990s resulted in large scale job losses. The courts returned some of the firms to the state following alleged corruption in sales operations.
A halt to privatisation raises fears over foreign investments, which have already collapsed due to insecurity in the wake of the 2011 revolution which toppled Mubarak.
In economic crisis, Egypt’s foreign currency reserves have plunged to $13.5 billion from $36 billion in the past two years, key tourism revenues have declined and the budget deficit has widened.
Talks between the International Monetary Fund and Egypt on a $4.8 billion financing programme have bogged down, with the global crisis lender saying Cairo has to show its commitment to a broader reform plan.