By using this, which I call "centre-periphery" or "distance from the state" thesis one could argue that "the poorest of the poor" are the lest affected by the negative effects of these programmes simply because they have not been benefiting from the public sector and SOEs to start with. In fact this argument was advanced in relation to the impacts of SAPs on the poor. The other school of thoughts, which I am among them, though agreeing with the analysis of Naggar and Löfgren on who is going to be hurt from privatisation, they see the poor both urban and rural as well as women and lower strata in employment structure are the groups who are hardhit by the hardship inflicted on them by privatization and liberalization.
This second school of thoughts agrees that the groups identified by Naggar and Löfgren might or will oppose and work to delay or derail privatisation, nevertheless these managers, state bureaucrats, well connected private industrialists, and high ranking government officials are least vulnerable among the various strata in the employment structure. This group of "state eliets" includes variety of large number of politically, socially, professionally, or economically influential and powerful individuals who can use their influence to extract concessions from the state and make use of privatisation programmes as pretext to legitimize private rent-seeking, tribute making-taking, and other forms of similar acts.
Numerous evidences and examples from many Arab countries do support this assertion.
When many of the light industries were privatized in Iraq from 1988 onwards, it was "often with former managers retaining a key role"30 In Egypt, many senior officials and politicians are directly or indirectly large landowners and controllers of other economic assets.31 In Iraq, as another example, it was deliberate party policies to provide its senior member with free of charge of good and best located agricultural land/plot since mid 1980s and many have developed agricultural and poultry projects with sufficient and subsidized state financing. Some of the very senior party, army, security members had even used soldiers, para military and junior party members to work for the development of such project without payment.
The "state eliets" also use their influence to enrich their families and relatives; Many of the privatised, through long term leasing, petrol stations in Baghdad area were awarded to family members of senior officials at the Ministry of Oil.
This type of personal relationship between state eliets and vested interest is not peculiar to the privatized enterprises or emerged as new phenomena in consequence to privatization. Not at all. This relationship has manifested itself in many popular terms in almost all the Middle Eastern societies. Such as "supply Maffia" and "al-munfatihun" in Egypt, "commission entrepreneurs" in Saudi Arabia, "wasta"32 in Iraq, Syria and many Arab countries, and even a state created "detachment formal" in Tunisia.33
Professionally, it is the public sector and SOEs who are endowed with and recruited over the decades the administrative, managerial, technical, technological, legal, financial, and other expertise. Obviously the private sector can attract such expertise with least difficulties and cost within the general atmosphere of privatization.
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In conclusion, though hypothetically as well as empirically, the state eliets might be affected by privatization, they nevertheless are well placed, properly connected and professionally equipped to minimize such impacts upon them and capable to turned out to be among the few beneficiaries from such programmes. After all, they are the ones who implement such programmes; evaluate the assets, conclude the necessary contractual and financial requirements and documentations, supervision etc. It is rather naïve to assume they will sign their own redundancy notes quickly, willingly, and without safeguarding their own interest.
Going back to our balance sheet, broadly speaking the impact on employment visualise itself on many issues such those related to job security, labour retrenchment, working conditions, labour relations, trade union and workers associations, fringe benefit, and wages.
Income inequality, wealth distribution, and property concentration dimensions of privatization depends largely on to whom the SOE is sold/transferred, at what price, how the deal was concluded etc. The impacts of privatization on poverty levels and vulnerable groups is a combination of the above cited impacts plus the effect on consumer welfare which is expressed in terms of prices, access to secure supply, quality of the goods and services, and, as far as absolute poverty is concerns, food security. Issues related to compensatory and protective measures against possible adverse impacts of privatization includes various forms of SSNs: Social Safety Nets such as SAP: Social Action Programmes, ESF: Emergency Social Funds, and SIF: Social Investment Funds.35 In the following pages I will address the major social aspects of adjustment and privatisation programmes.
Undoubtedly, the national concerted efforts in many Arab countries to put the affairs of their economies in order by implementing economic reforms, stabilization, structural adjustments and privatization programmes had led to some positive results and improvement in may macro economic variables. However, these results were not impressive, lower than anticipated and hoped for, and probably unsustainable. Budgetary deficit, for example, in most adjusting countries have been on the decline between 1988 and 1991 from US$17.8 billion to US$3.7 billion, but this trend was reversed a year later when it increased to US$9.5 billion in 1992 and to more than US$15 billion in 1993.36 International indebtedness of the Arab countries had been eased in 1990 when it was reduced from US$159.2 billion in 1989 to US$154.8 in 1990, mostly due to Egyptian debt forgiveness, but increased again in the following to US$155.4.37 Trade balances for all adjusting countries are still in the red and the aggregate has been on the rise from US$12.9 in 1989 to US$18.5 billion in 1993.38
In spite of any improvements which might have taken place in the economies of the Arab countries as consequence of these programmes, the growing body of evidence suggest that little, if any at all, has been done to revers these impacts and protect the poor and most vulnerable from the hardship created by the same programmes. To this I shall turn in the following pages.
