BPE October 18, 2018

What should be the essential role of the government in making privatisation work?

The government must devise sectoral policies that introduce competition and promote private sector development.

1. It must establish and maintain a strong regulatory framework for the remaining monopolies, public and private, to ensure that fair business practices are adhered to, keep prices down, and generally oversee the particular sector;
2. It must maintain transparency in transactions and convince investors that their investments are secure;
3. The government must negotiate, monitor, and enforce contracts with private suppliers of management and finances;
4. It must ensure that resources from privatisation sales are put to productive uses; and
5. Importantly, it must manage the inevitable political and social tensions that arise and ensure that enterprise reforms are implemented, with special attention to the issues of foreign ownership and labour layoff.