Increasing Privatization Globally
July 20, 2000
Countries throughout the world are increasingly selling off their stakes in corporations, according to a report from the Organization for Economic Cooperation and Development. A variety of factors is propelling the trend, according to the report.
- The value of privatizations worldwide last year was 10 percent higher than the year before, yielding $145 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.
- Privatization has earned France about $10 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 liberalization and globalization 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 privatizations. Of these, Poland was the most active last year, raising $3 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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