by Fahed Fanek | Feb 12,2012 | 22:53

A heated dialogue of the deaf is currently taking place, not only in the papers, electronic media and political salons, but also in the street, starting at the Grand Husseini Mosque and ending at the Nakheel Square every Friday.

The claim is that previous governments sold off the country’s strategic mining potash and phosphate companies to foreign investors at very low and unrealistic prices, and that the Jordanian public sector has all but disappeared.

The fact is that these two important companies are still Jordanian, not only in a sovereign sense, being located in Jordan and subject to the Jordanian laws and Jordanian authorities, nor only in an economic sense, in that their employees and labourers are Jordanians and they contribute to the Jordanian gross domestic product and to the growth of the economy and exports, but also from the direct ownership of shares point of view.

A Jordanian government institution, the Ministry of Finance, a semi-governmental institution, the Social Security Corporation, Jordanian banks and Jordanian citizens own some 53.7 per cent of the capital shares of Jordan Phosphate Mines Co. The foreign investors’ share is limited to a 37 per cent minority. The remaining shares are held by Arab investors, governments and banks.

As far as Arab Potash Company is concerned, the above mentioned Jordanian interests still own 34.2 per cent of the company shares. Ownership of the foreign investor makes up just below 28 per cent of the shares. The rest is owned by Arab governments and funds, some of them among the founders of the company half a century ago.

Yes, only 37 per cent of phosphate shares and 28 per cent of potash shares were subject to privatisation. The balance is held by Jordanian and Arab owners.

In this respect, even the critics of privatisation admit that those two companies were poorly managed before privatisation. However, they point out the fact that privatisation as such does not necessarily mean only selling off the assets, it may mean contracting management while maintaining ownership. This is true, but it is effectively what happened: the real achievements of the privatisation in these two cases were better performance and more efficient production.

Foreign investors were attracted for their good management, modern technology and effective world marketing. In practice, the two companies achieved benefits, including higher competence in production and marketing. They scored high exports rates. They are making profits and declaring high dividends, which caused the price of their shares at the Amman Stock Exchange to soar.

The last criticism is that privatisation deprived the Treasury of the revenue that was generated by these companies before privatisation. This is false. It is evident that revenues accruing to the Treasury after privatisation in the form of dividends, taxes and fees exceed the volume of revenue before privatisation, when employment in these companies depended on connection (wasta) and the running of the business was left to appointed chairmen and directors, mostly ex-ministers and retired officials with no experience in production, managing companies and world markets. Their attention was concentrated on the personal benefits their positions entitled them to enjoy.

Several reports by independent institutions were issued to evaluate the privatisation programme. They all indicated success and quantified results in every respect. Previous governments acted within their legal authority and according to the provisions of the law.

The noise against privatisation will not lead us anywhere.