Worldwide increase in privatisation
Countries throughout the world are increasingly selling off their shares in state industries, according to a report from the Organisation for Economic Co-operation and Development. A variety of factors is propelling the trend, according to the report. The value of privatisations world wide last year was 10 percent higher than the year before, yielding $145 billion (R1,000 billion)to governments.
The world's largest sale yet occurred in Italy, where the government sold a 34,5 percent stake in the country's largest electricity producer, ENEL, for $14 billion (R96,5 billion).
Privatisation has earned France about $10 billion (R69 billion) a year since the 1997 legislative elections.
The sale of a second slice of Deutsche Telekom yielded $10 billion to the German government last year.
Reasons for the sales include budget restrictions, the need to attract investment, technological progress and the liberalisation and globalisation of world markets and products.
In countries using the common European currency, the euro, the most visible factor was the commitment of governments to meet strict fiscal objectives, as well as a need to satisfy European Union directives on open markets.
OECD member states in transition to market economies - Poland, Hungary and the Czech Republic - have also stepped up privatisations. Of these, Poland was the most active last year, raising $3 billion (R20 billion) from the banking sector alone.
Source: Agence France-Presse, "Global Assets Go into Private Hands at a Lively Pace," Washington Times, July 20, 2000.
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Publish date: 30 August 2000
The views expressed in the article are the author’s and are not necessarily shared by the members of the Foundation.