Government’s assets and management

تم نشره في Mon 7 April / Apr 2014. 06:09 PM - آخر تعديل في Tue 8 April / Apr 2014. 03:10 PM

By Jumana Ghunaimat

The general popular impression is that the government has sold all owned assets to the private sector during the years of privatization, and is currently left with nothing. But the figures say otherwise; government still owns assets here and there, and their value exceeds what was sold an era ago.

With an estimated value of 1.75 billion dinars for what was sold, which is the price of government stakes in 19 companies, the current shares of the government in companies and institutions, and until the end of the fiscal year 2013, is about two billion dinars.

According to the report of the Privatization Evaluation Committee, which devotes a special chapter to the value of those government shares, its assets include, in addition to corporate contributions, contributions to international institutions; including the International Monetary Fund, the Arab Monetary Fund, the Islamic Development Bank in Jeddah.

The largest and most important government investment today appears to be in the Arab Potash Company, in which owns the government own 627.8 million dinars; followed by the National Electric Power Company at 230 million dinars, Free Zones  with 181 million dinars, the Jordan Phosphate Mines Company  with 137.6 million dinars, Industrial Cities at 95.6 million dinars, and al-Abdali Investment with 91 million dinars.

After the previous experience in privatization, it seems like a good idea to maintain these assets, and increase revenues from this section, thereby achieving a source of income other than taxes and fees; assets, it provides real revenues from an investment.

The problem is that the management of these assets is, even today, taken lightly; members of boards of directors representing the government in these companies are, in most cases unfortunately, incompetent and unqualified.

Government is still considering memberships in these boards of directors as a way to appease former officials, without any consideration for expertise and knowledge, and without taking into account profits and losses, and its impact on the financial position of these companies.

After reviewing the criteria for the designation of representatives, government can develop practical plans to increase its contributions to these companies. Such a move does not mean going against the principles of the economy; the fact is that these companies have been privatized already, and they no longer operate with a “public sector” mentality, which brought many of them to a rickety financial position, and big losses, prompting the state to consider selling them to get rid of excess tonnage.

There are opportunities to expand the contribution base. For example, the government can increase its stake in the "phosphate" without paying a penny, by contributing land plots rich in phosphates that are owned by the treasury, since it cannot grant any party other than the “phosphate” mining rights, according to the agreement signed with the company which grants the later an exclusive to approve or reject licenses in that area, pending a constitutional “fatwa” in this regard.

Also, Jordan is on the verge of creating huge and strategic investments during the next few years, through partnerships with the private sector. This idea should not be marginal, but must be studied in depth so the treasury reaps real benefits from these partnerships.

In Jordan we have many forms of administrative distortions that must be repaired, especially that they have been diagnosed, and the causes of the problem are now known; whether the solution is going to be adopted or not depends on the will to reform, change, and transition to a new phase of work.



This article is an edited translation from the Arabic edition.