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  • Comparison of Public and Private Enterprises and Nonprofit Institutions; Privatization; Contracting Out x
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Mr. Saíd El-Naggar

Abstract

One of the most distinctive features of the economic situation in developing countries is the predominant role of the public sector in the production structure. While the specific reason for the phenomenon varies from one country to another, the ubiquitous presence of the public sector is a common feature. This is particularly true of countries which passed through a stage of socialist development. Through a variety of measures which included nationalization and establishment of new enterprises, the public sector came to dominate all aspects of economic life. Most of the manufacturing sector passed into the hands of the government. The same is true of mining, foreign trade, banking, insurance, construction, public utilities, transport, and a multitude of firms in the service sectors. The private sector was reduced to a subsidiary role, and central planning displaced the market system as the driving force in the allocation of resources. A major exception to the takeover by the public sector is agriculture where ownership of land continued—for practical considerations—to be in private hands. However, even in the agricultural sector, the market mechanism is hardly allowed to operate. Prices of the principal crops are state controlled while marketing and supplies of fertilizers, pesticides, and credit are firmly in the hands of public enterprises. Among the Arab countries this pattern of development is more or less characteristic of the situation in Algeria, Egypt, Iraq, Sudan, the Syrian Arab Republic, and the People’s Democratic Republic of Yemen.

Alan Walters

Abstract

In this paper my main purpose is to examine the principles, practices, and record of the deregulation and privatization movements of the 1980s. No such survey could be comprehensive without straining the reader’s patience beyond breaking point. Consequently, I shall be selective. I shall try to choose to discuss and illustrate those issues which, I conjecture, are most instructive and applicable over a wide area. Of course, I do lean rather heavily on British experience, primarily because the United Kingdom has been, and still is, in the vanguard of this movement. (And, a not inconsiderate matter, I was directly involved in the process.) Although the U.K. economy and financial system differ very much from those of the Arab countries, the British example can be mined for many golden nuggets of advice, information, and even wisdom on the issues that arise in the Middle East. But to make the lessons more relevant, I shall discuss the experience of certain other countries, particularly Chile and on occasion Turkey, Argentina, and even Bangladesh, where the sophistication of the financial system and capital markets is perhaps more comparable to that of Arab countries.

Mr. Peter S. Heller

Abstract

One major factor leading governments to consider a privatization program is the belief that it may be of benefit to the government’s finances. The fiscal impact of privatizing a public enterprise, however, depends on a number of factors, including the nature and the magnitude of the financial interactions between the government and the public enterprise concerned, the effect of privatization on the financial performance of the enterprise, and the impact of other relevant policy decisions of the government, in particular those that lead to the enterprise being more exposed to the pressure of competition. The time perspective is also important, since privatization not only affects the government’s budget in the period when the sale of assets takes place, but also in subsequent periods (for example, loss of profit remittances); it is necessary to trace not only the various channels of impact but also their associated timing.

David Gill

Abstract

“Privatization,” unlike most other popular concepts where there is usually more talk than action, has become a major activity in many countries, with well over $300 billion worth of shares of state enterprises already sold to private investors.

Ibrahim Helmy Abdel-Rahman

Abstract

Recent economic developments in many developed and developing countries have led to a critical review of current policies and practices, known as readjustment, or restructuring. One of the major questions invariably raised in such an exercise is the role of public and private sectors in the economy. This may be closely related to the general question of government intervention as regulator and manager of the economy, and as owner of productive enterprises.

Mohammed F. Khatrawi

Abstract

Since its inception in 1981, the Gulf Cooperation Council (GCC) has repeatedly emphasized the importance of regional joint ventures as an effective approach to foster cooperation and integration of the six member states economies. In fact, a number of regional joint ventures, both public and private, were undertaken long before the formal formation of the GCC, but the presence of the GCC should presumably have stimulated this trend. However, with the recent drastic decline in oil revenues, the private sectors in the GCC states are being called upon not only to take the lead and the initiative in developing new intra-GCC joint ventures, but also to acquire partially or totally public sector interests in the intra-GCC public joint venture enterprises already existing.

Jawad Anani

Abstract

Privatization has acquired an increasing degree of importance in Jordan since 1985. It is considered a part and an indicator of the “new economic direction.” Since its inception, it has been at the center of public attention. The institutions targeted for privatization were the Telecommunications Corporation, the Public Transport Corporation, and the Royal Jordanian Airline. Most of the debate in the media did not deal in depth with the issue of privatization as such, but basically revolved around the merits and demerits of privatizing those particular institutions. However, by extrapolating from what had actually surfaced in the media, the idea of privatization was accepted and in many cases welcomed as a sign of a freer economy. This paper will elaborate on the rationale for privatization in the light of an assessment of the extent of the public sector in the country. It will evaluate the performance of public enterprises and discuss constraints on their successful operation. Finally, after a brief account of problems encountered in privatization, a privatization plan will be recommended.

Mohamed Bouaouaja

Abstract

With the advent of Tunisian independence, it became apparent that direct state intervention in companies was imperative. On the eve of independence, the country’s economy was characterized by the predominance of the colonial private sector and a lack of sufficient national private capital and experience in most branches of economic activity—with the exception of traditional agriculture, trade, and craftsmanship. When the colonists left for good, their companies and firms could therefore only be taken over by the young Tunisian state, which mobilized its available managerial manpower and financial means to this end. This takeover took the shape of nationalization, especially of public service companies in fields such as transport, and the strategic mining and energy sectors. These takeovers were followed by a restructuring and reinforcing of the newly transformed entities, where necessary, into companies according to Tunisian law. State intervention in the productive sectors was again reinforced following the nationalization of land in 1964.