Message-ID: <9605021852.AA15169@orchid.tc.pw.com> Date: Thu, 2 May 1996 14:37:43 EDT From: Tina Pham <mailto:Tina_Pham@NOTES.PW.COM> Subject: Privatization and Development Scenario Papers To: Multiple recipients of list DEVEL-L <mailto:DEVEL-L@AMERICAN.EDU>
Privatization in the 21st Century: Strategic Management Implications for StakeholdersVirtual Discussion Sessions over the Internet
The scenario papers are available at the following URL address: http://www.pw.com/us/ipgnet.htm
Readers are requested to submit comments to the following e-mail address: mailto:Contact_IPG_Training@notes.pw.com
The 1980s and 1990s have been unprecedented in terms of privatization activity:
- Since 1984, 54 countries have privatized more than 286 infrastructure companies. At least 272 private greenfield projects are currently underway in some 52 countries. Revenues from privatization transactions and new investments by 1994 stood at $22 billion.
- Despite the traditional resistance of governments to private participation in the resources sector, exploitation regimes for oil and other minerals have led to an unprecedented level of private involvement in extractive industries. Since 1990, there have been over 150 transactions leading to greater private involvement in mining, oil and gas, worth over $15 billion.
- In other industry, the World Bank recorded over 1,400 privatization transactions between 1988 and 1994, 15 times larger than the total number of transactions between 1978 and 1987. Adding mass privatization, one of the more important innovations in the field of privatization, the total number of such transactions increases to over 20,000.
- Private involvement in the agricultural sector has also increased significantly over the same time period. Marketing boards throughout Africa and Asia are being dismantled and or privatized, important agribusinesses are being sold to strategic investors, and even collective farms are being restructured to allow for greater individual initiative and drive.
- In health and education, the private/public mix used to finance and provide these services has changed considerably. In Chile, privately owned and operated health insurance funds, and a voucher program to reduce the cost differential between public and private providers, were introduced in the late 1970s and early 1980s. Several countries are contracting with private providers for particular services: Namibia is providing surgical care in rural areas using teams of private practitioners under contract to the Ministry of Health. In Zimbabwe, the government has contracted private mine hospitals to provide services to selected populations.
What ideological, political, financial, and technological trends have accounted for the rapid acceleration of the privatization process around the world over the last ten years? What can we expect to see over the next ten years if these trends continue? What events may serve to derail the process of effective public/private involvement in a wide range of industry segments? How should stakeholders (governments, enterprises, privatization practitioners, international investors) and donors prepare and react?
These are just a few of the questions that are raised in a series of five papers prepared by Price Waterhouses International Privatization Group under the auspices of USAIDs Privatization and Development project. The scenario papers:
- take stock of key accomplishments of privatization in infrastructure, extractive industries, manufacturing and other industry, agriculture/agribusiness, and social services (health/education and municipal services) over the last ten years;
- illustrate the spectrum of modalities used to allocate risk between private and public sectors, and the key factors driving or inhibiting the privatization process;
- identify key drivers and uncertainties affecting the future of privatization; and
- develop a series of scenarios designed to encourage the reader to envision the future of the privatization process within a given set of circumstances and to act as decision maker.
Readers' feedback is encouraged, both on the usefulness of the papers in general, as well as the consistency of the scenarios. Comments from readers will be used to maintain a dialog over the future direction for privatization. In particular, we want readers to think about what privatization means for them as stakeholders, and to think strategically as to how they may respond to alternative events which shape the path privatization takes over the next decade.