Group Discussions

Group B:

Discussion Outcomes

1.   Political Commitment

●  Clear Legal Basis

●  Executive Authority to Lead the Process

●  Transparency of Procedures

●  Evaluation of SOE Assets

●  Transparency in Use of Proceeds

2.   Property Rights

●  Right to Use Assets More Efficiently & Effectively

●  Freedom From Pressures that Will Reduce Value Assets

●  Economic Interest Vs Social Responsibility

3.   Social Effects

●  Clear Mechanism for Dealing with Social Effects

4.   Public Relation & Education

●  Educating Public About Benefits of Each Privatisation Project

●  Public Relation to Win Over Different Stakeholders

5.   Nature of Business

●  It does matter, but varies from country to country

●  Manufacturing, Telecommunication & Transport easy to privatise and should be

●  Other public utilities and SOEs with primacy of social objectives less suitable

●  Natural monopolies less suitable suitable for privatisation. Even if

    privatised, need for clear regulatory mechanisms to deal with pricing decisions

6.   Level of Competition

●  With higher level of competition industry, privatisation more likely to achieve its objectives

●  Careful consideration should be given to how privatisation will affect current & future competition

7.   Extent of Liberalisation in Sector

●  More liberalised the sector, easier to privatise SOEs within sector

8.   Size of Market

●  It does matter. Because, among other things market size

-  affects competition

-  fairness of pricing

-  ability of stakeholders, including consumers to monitor privatised enterprise

9.   Method of Ownership Transfer

●  Existence of well-functioning stock-market is important

●  Otherwise, possibility of mimicking its advantages is important

10.  Enabling Environment

●  Market efficiency of banking & financial sector

●  In some cases, existence of organised stakeholders, e.g. existing employees, to buy SOE

11.  Possibility for State to Step-in

●  Should be avoided unless when there is overriding need in the interest of larger public good

12.  Public-Private Partnership (PPP)

●  Even with extensive & successful privatisation programme, for some time to come SOEs will be there

●  Hence, need for developing appropriate PPP mechanisms

●  Sometimes, nature of business or need for streamlining government requires PPP

13.  Role of Local Government

●  More desirable to have social services and social infrastructures

    delivered through local government through polycentric mechanisms that are PPPs

●  Do not let local government do what central governments have failed to do