Turning back the tide of state ownership of business, utilities
The postwar tide toward state ownership of business activity in the non-communist world has been reversed. For some 40 years after World War II nationalization of private companies was probably more common than denationalization. Now the reverse is true. In the last few years, dozens of governments have been talking of ``privatization'' - and many have been acting:
United States: President Reagan will propose for the next fiscal year the sale of Amtrak's Northeast passenger line, serving Boston, New York, and Washington. The government also is preparing to sell its 85 percent interest in Conrail. It hopes to raise $1.7 billion or more to help reduce the federal deficit.
Britain: The government of Prime Minister Margaret Thatcher has conducted the world's largest-ever sale of state assets, aiming to make Britain a land of ``people's capitalism.''
The latest sale was of British Gas PLC on Dec. 8 for about $9 billion, becoming the world's biggest share flotation. Previously, it had profitably unloaded more than a dozen companies, including British Telecommunications, Britoil, Cable & Wireless, British Aerospace, Enterprise Oil, Jaguar, and Associated British Ports.
Companies slated for sale in the next couple of years include water authorities, British Airways, British Airports Authority, Rolls-Royce, and National Bus.
France: In the next five years, the government aims to transfer 65 companies worth $30 billion to $40 billion to the private sector. These include the nation's seven major banking groups. Cie. Financiere de Paribas, the investment banking group, is due to be offered for sale to the public towards the end of January. In November, the government sold some 70 percent of Saint-Gobain SA, a major glass and construction material manufacturer, raising some $1.2 billion. Earlier in the fall, the government sold 11 percent of its stake in Elf Aquitaine, the state oil group.
Chile: Affected by the Chicago school of free market economics, the military government of General Augusto Pinochet has moved further and faster with privatization than any other Latin American nation. Some 350 small and medium-sized companies were turned back to their original owners between 1973 and 1975. Another 86 companies and 11 banks were sold for a total of $916 million between 1975 and 1983. Many of these companies sharply reduced their payrolls after privatization. This year and next the government expects to sell shares in 23 companies, raising some $500 million. These companies include a telecommunications group, Entel; the national telephone company, CTC; the electrical concern, Endesa; the computer company, Ecom; and Lan Chile, one of two national airlines.
West Germany: The government plans next year to sell its holdings in two of the nation's largest corporations - 19.4 percent of Volkswagen AG and 25.6 percent of Veba AG, an energy company. The sale could bring in more than $2 billion to government coffers.
Quebec: This Canadian province, like the federal government, has been unloading crown holdings. It sold a sugar refinery, Quebecair, and a package of gold mines (Cambior) earlier this year. In January, it expects to sell its 28 percent of the stock of Domtar, a pulp and paper, building materials, and specialty chemicals concern based in Montreal, and 56 percent of the shares of Donohue, a large lumber, pulp, and newsprint producer based in Quebec City. It hopes to realize between $600 million and $700 million (US$500 million) from these sales, bringing it a net gain after debt payments of between $150 million and $200 million. Also up for sale is a fisheries company on the Isles de la Madeleine at the mouth of the St. Lawrence River.
Philippines: The government of President Coraon Aquino has ambitions to sell 163 state-owned companies to raise $7 billion over the next five years. These concerns include banks, coconut-oil mills, hotels, food manufacturing companies, and trading companies.
Mexico: The government has reduced the number of state-owned companies from 1,155 in 1982 to less than 700. It has sold the Nacional Hetelera chain of five-star hotels and withdrawn from the automobile industry with the sale of Vehiculos Automotores Mexicanos and Renault de Mexico.