Source: alborsaanews

Dr. Ibrahim Mustafa

Chairman of the Investment Committee

Within the framework of the current state policy towards restructuring its economic entities, which number 59 diverse entities, this is a commendable and desirable approach, in order to raise efficiency rates and increase their contribution to the GDP, which is a priority for the government, in order to determine the fate of each entity, according to a number of alternatives that include: either keeping this economic entity, or converting it into a public entity, or merging entities together, or dividing the entity into smaller entities.

Whereas the initial studies of this issue were conducted by the committee formed for this purpose and after completing the procedures and steps for examining and studying 40 entities, it was agreed to keep 29 economic entities, liquidate and cancel one entity, merge 3 entities into other entities, and convert 7 entities from economic entities to public entities for a number of considerations, noting that it is expected that the examination and study of the remaining 19 entities will be completed, and the final report of the study will be prepared, in preparation for its presentation to the Council of Ministers.

The restructuring of economic bodies must achieve the desired goal of rationalizing spending, re-raising the efficiency of the bodies’ work and functions, and avoiding overlaps in jurisdictions. This requires considering several criteria to achieve the positive aspects of restructuring:

The nature and functions of each authority, and therefore the importance of merging authorities with each other that have similar specializations, such as authorities related to investment, as the presence of an investment authority, an industrial development authority, and an economic zone authority disperses efforts to simplify the investment environment and promote investment opportunities, despite their connection to each other.

Maintaining, merging and liquidating… How will the government deal with economic entities?

When the capital market, insurance and real estate finance authorities were merged into a unified financial regulatory authority and all non-banking financial services were unified into a single entity that regulates these activities under the name of the General Authority for Financial Supervision, in line with leading international experiences, this increased the efficiency of the non-banking financial services market and unified dealings with a single entity.

Therefore, merging the General Authority for Investment, the General Authority for the Economic Zone (for the Suez Canal Zone and the Golden Triangle), and the General Authority for Industrial Development into one entity will have a significant impact on efforts to attract investment, promote investment opportunities, and discuss investment opportunities with one entity. It will reduce coordination efforts under many different entities to one entity that deals with investors. It will reduce external spending on promoting investment through one entity only, without multiple trips by the heads of all these entities to discuss investment opportunities or efforts to simplify procedures, which must be one and simple. There should be actual deputies for the new unified authority.

When merging, it is important to have the institutional structure, wages and employees similar or to rehabilitate them to suit the merger processes, because the internal institutional structure of the new authority will then change, and here comes the importance of coordination with the Central Agency for Organization and Administration and consulting companies to establish the best position after the merger, especially since it happened before in clear examples when the Financial Regulatory Authority was established, and when the Companies Authority was merged into the Investment Authority many years ago.

There will also be a unified budget for all these entities instead of multiple budgets and duplication of spending on similar activities. Then, it will be possible to maneuver in spending on activities by unifying the resources of these entities and the proceeds of the lands they own, while they invest their assets and funds to maximize the return on their own in a way that enhances their resources away from the state budget as a source of funding. Rather, it will also be a good source of funding for the state budget from the resources of these unified entities.

This unified body will be able to use the headquarters of the merged bodies to expand the services that have been assigned to it in all branches spread across the various governorates, while developing the desired mechanization efforts, in light of the existence of a unified body that addresses its service recipients, exercises unified powers, and spends on developing these services from its resources. The bodies that did not have a self-resource merged into a unified body that achieved this for them and benefited from the bodies that have self-resources and are similar to them in the same activities.

The importance of implementing early retirement, filtering out efficient elements, and injecting new blood after assessing the shortage of required cadres at all job levels, in order to achieve the desired goals, and keeping pace with new developments with the data of the era of modern technology, modern human development, and the status of global competitiveness in light of the challenges and opportunities created by the international political economy regionally and globally, and affected by local economies, as the world has become intertwined and its events are accelerating significantly at various levels.

In the end, the issue is not the number of bodies, but the efficiency of performance. A few bodies with advanced competencies and systems may be sufficient to carry out the required tasks and with advanced smart means, and achieve accomplishments efficiently and effectively, which will bring great benefit to the state and save it effort and costs that it can do without and are wasted in light of the multiplicity and overlapping of specializations and the bloated bureaucratic apparatus to no avail.