Well privatisation does not mean the Government has to sell the entire
stake to private investors but it can part sell and diversify its equity
, for eg if the government owns 100 % in Power Trans mission and
Distribution , it can sell 49 percent stake to private players and keep
the 51 % as majority holders or do it vice or verse.
Most of the time that merely results in foreign interests owning large portions of your most profitable companies for a reduced return.
Sell off non strategic non infrastructural assets of course, but market forces have proved to be unreliable because the focus is making a profit and most of that profit heads overseas.
In practical terms privatisation means selling off assets for a short term gain... and considering the price of oil at the moment that is not really necessary.
That would help government raise money and improve its performance in
such organisation by bringing in competition , sure people would be
fired because they could be over staffed or not working to its full
So the government gains a small amount of short term revenue at the cost of an increase in unemployment.
Why not just reduce the number of jobs themselves and make remaining workers work harder or smarter?
If you replace government with the head of the family does it make sense to sell off assets that are generating income just because times are tough?
It is time to prioritise and reduce spending where it is being wasted, not time to sell assets that are generating funds or are considered in the national interest.
Here in NZ the government sold the railways... including rails and all. Recently they bought them back at an enormous loss because the (foreign) company that bought them that was going to fix everything didn't and rail as a transport option pretty much killed itself here.
There is no guarantee that privatisation improves things.... it is a gamble... and why gamble when you don't have to?
I can tell you from my experience in India privitisation has done
wonders , I remember a time when all banks were government owned and
depositing money in a bank or withdrawing it would be half a day job
with long queues and poor work ethics.
The banks in Russia are pretty rubbish, the government has little business in banking... except perhaps one national bank for those Russians that don't want all the profits from their business to go overseas.
Here in NZ 90% of banks are Australian owned with only a few Kiwi owned banks. They screw us and we ask for more.
these days you could get a phone within a day and get connected. thanks to privatisation that made the change.
And is privatisation really the only solution or could reforms result in similar changes?
Personally I don't like the idea of foreigners controlling such things... the only criteria is that they are prepared to pay what the asset is being sold for.
Do you think such people care about their customers other than as a revenue source?
Russia too would have its own experience with its drive , as long as its
done via competitive bidding process and fair play .Russia and Russian
people in general in the long run would gain more from it and loose
Hahahahahaha.... you believe such things are fair? Really?
I always believed Government should do pump in money where it should
like infrastructure , education , health care and some strategic sectors
for the rest they can be completely privately owned by many players or
jointly owned by government and private players.
I am beginning to think they should put some of the money into gold and silver reserves and spend the rest where it is needed the most... certainly health and education and infrastructure, but also into electronics and alternative energy.
It should also set up a LNG plant because EU rules will eventually demand that the Russian companies can't sell oil and gas and also own the pipelines they are delivered through.
This means that the Russian companies will have to sign contracts for delivery of energy yet not have control of the pipelines that deliver it, so the potential for problems with changing costs of using pipes and of course potential for lack of maintainence leading to problems makes delivering it in gas form might become untenable and they will have to deliver it as a liquid for a higher price by ship.
All because Europe is afraid of a monopoly the Russians and Soviets have had for decades yet have never once used it as political leverage.
Let me just say that I think it is rather criminal that a short distance from where I live in a place called McRaes Flat an Australian mineral company is extracting billions of dollars of gold every year from the ground.
The New Zealand government earns some tax and a few people get jobs, but the vast majority of the wealth goes to Australia.
Don't tell me life is fair.