16 March, 2009

The Shebeen el-Kom drama continues

Al-Badeel and al-Dostour both reported yesterday that Indorama Group asked during negotiations on Saturday to return the Shebeen al-Kom spinning factory to the government in return for a refund, claiming that the numerous work stoppages and strikes in the factory since the take-over has contributed to the losses. Upon hearing the news, striking workers apparently rejoiced and prepared signs calling on president Mubarak to re-nationalize the factory.

If the reports are accurate the owner and the workers both want the state to take over. How likely is it that this would happen? Taking back one failing privatized factory would create a powerful precedent and might unleash a wave of similar demands from other companies with similar problems. On the other hand if the government doesn't do anything the strikes and protests in the textile sector might continue to spread. From the point of view of the government, a convenient short-term "solution" would be some kind of bailout where the state temporarily steps in to help the company to pay the demanded bonuses. According to previous media reports the ministry of manpower has already been discussing plans to use emergency funds to help failing companies pay wages - which is of course very controversial since it would entail bailing out private investors without giving the state a share in those companies.

More speculation then: From the point of view of Indorama, asking to have the factory returned to state ownership would be an excellent negotiation strategy to achieve some kind of bailout, since they know that re-nationalization is something the regime wants to avoid...

In any case, it is clear that the strike at Shebeen el-Kom will have huge implications, since it raises doubts around the economic polices of the state, threatening further privatization schemes in the textile industry in particular. Whatever the outcome, the experience of Shebeen el-Kom is likely to further strenghten resistance to privatization among workers in other state owned factories.

No comments:

Post a Comment