EGYPT: State Media Loses Billion Dollars, And Counting

By Adam Morrow Reprint | | Print |

Adam Morrow and Khaled Moussa al-Omrani

CAIRO, Feb 12 2007 (IPS) - Revelations in January that Egypt’s state-owned press institutions had accumulated vast government debts have ignited a torrent of speculation that privatisation of the industry is in the cards.

While government spokesmen deny such a move is under consideration, many in the state-owned print media sector suspect the reform-minded finance ministry is eager for a sell-off.

Last month saw the release of a long-awaited government report, which put the accumulated debts of the ten state-owned press institutions – including the internationally recognised al-Ahram publishing house – at more than a billion dollars.

On Jan. 11, an unscheduled meeting was called between the Prime Minister and the upper management of the Dar al-Tahrir publishing house, one of Egypt’s biggest state-owned print institutions and publisher of widely-distributed government daily al-Gomhouriya.

The presence at the meeting of finance minister Youssef Boutros-Ghali, an outspoken proponent of privatisation, fuelled speculation that the state’s print houses might be partially sold off in order to settle outstanding debts.

“There is talk of setting up a holding company…which suggests the financial restructuring of these organisations as a first step to their eventual privatisation,” a veteran journalist from the state press was quoted as saying in al-Ahram Weekly.

Within days of the meeting, Prime Minister Ahmed Nazif announced that the government was “dedicated to supporting national print media institutions.” Nevertheless, he went on to emphasise the “importance of taking practical steps…to deal with accumulated debts and arrive at a realistic solution.”

President Hosni Mubarak quickly reassured skittish employees of the state’s sprawling print-media sector – of whom there are roughly 60,000 – that he “would not privatise the national print press.”

In the Jan. 25 edition of flagship government daily al-Ahram, he stated his desire to “maintain (the state press) so it can continue to express the conscience of the nation and the interests of the citizen.”

Nevertheless, the issue appears to have revealed a fissure between the old guard of the ruling National Democratic Party (NDP), which has dominated Egyptian political life for decades and remains the unchallenged power behind most state institutions, and the party’s younger generation.

While reformers within the NDP’s so-called New Guard – personified by Gamal Mubarak, the President’s son and head of parliament’s influential Policies Committee – are said to be at least considering privatisation, members of the party’s older cadres have spoken out vigorously against the idea.

“We can’t table the notion of privatisation under pressure from the current failures of the (state press) institutions,” long time NDP stalwart Safwat el-Sherif, chairman of the Shura Council and head of the Higher Council for Journalism was quoted as saying in the independent press. “I’m sure that debt rescheduling, along with financial and structural reform, represent the best way forward.”

Dar al-Tahrir chairman Mohamed Abu Hadid told IPS that the only way to solve the problem was for the government to forgive the outstanding debts. “This would hardly be a novelty,” he said, pointing out that the government had forgiven the debts of numerous public companies in the past.

Finance ministry representatives, however, are adamant that the monies be paid.

“The finance ministry can’t afford to ignore these outstanding debts,” deputy finance minster Ashraf al-Arabi was quoted as saying. “We cannot neglect to collect these arrears, even if it means seizing the printing press itself.”

Members of the indebted print houses’ upper management, however, express exasperation with the government’s abrupt demand for payment in full.

“The government can’t just ignore these institutions for years – without subjecting them to any kind of financial oversight – and then demand repayment all at once,” al-Gomhouriya editor-in-chief Mohamed Ali Ibrahim wrote in a mid-January opinion piece.

Others within the state press establishment express vocal opposition to the idea of selling the print houses and their iconic national publications off to the private sector.

“We reject privatisation because these institutions represent the collective psyche of the nation,” said Dar al-Tahrir’s Abu Hadid. “How can we allow these institutions to be handed over to others who will manipulate society in the direction that they want?”

He added: “The journalistic institutions represent a strategic area that no one should be allowed to toy with.”

Some observers from the opposition press, meanwhile, say that the national print media sector is too vital a security asset to be sold off to private interests.

“Privatisation of state print institutions isn’t going to happen, because the state press is like the state security service – it’s devoted to protecting the interests of the regime,” Gamal Fahmy, member of the Journalists’ Syndicate and assistant editor-in-chief of Nasserist weekly al-Arabi, told IPS.

Privatisation is unlikely, he said, even if it is possible “that some members of (Gamal Mubarak’s) Policies Committee want to buy these institutions’ assets – for less than their real values – so they can use the national newspapers to promote their ideas.”