Privatisation in Egypt: Management and welfare implications for employees

摘要

There is a growing tenor to privatise among both developed and developing countries. This trend has stimulated research that aimed to evaluate privatisation. Most of the previous research has focused on evaluating the financial impact of privatisation. Less attention was paid to the impact of privatisation on employees. The previous research that attempted to analyse the impact of privatisation on employees has concluded that employees' welfare improved as a result of privatisation. Such conclusion, however, was reached as the research has focused on a limited number of economic variables. The previous research has also implicitly hypothesised employees to be one homogeneous group regardless of their management and skill levels. The present study is an attempt to evaluate the impact of privatisation on employees' welfare in Egypt. The study attempts to assess the effects of privatisation on the employees in two privatisation cases in two different sectors. The first case is the Egyptian Bottling Company which is a case of a private sale to an anchor investor. The second case is the Shepheard Hotel, a case of a lease arrangement. The research uses economic as well as non-economic factors in order to evaluate the welfare implications of privatisation on employees. The findings of the research suggest that employees' welfare is affected differently according to the method of privatisation; according to the type of investor; and according to the way in which the privatised enterprise is being managed. The research findings suggest that privatisation will have positive economic and non-economic welfare impacts on employees in the case of a lease arrangement while employees' welfare will be adversely affected in the case of a private sale. The research findings also suggest that the economic impact of privatisation on employees will vary among employees with different skill and/or management levels.