How to Privatize Successfully – Part I
Changing the economic system is not an easy task. And, of course, it is more complex when carried out half-heartedly. As privatisation is only a part of this process, it may not succeed if done in an isolated manner. It needs certain other changes and a competitive environment to bear fruit.
… A case in point is Czechoslovakia. It provides us with a very good learning experience to see how after the fall of a collectivist state the gigantic task of changing the economic system was handled.
Presently, Dr Vaclav Klaus is President of the Czech Republic. He was Prime Minister from 1992 to 1997. Dr Klaus was one of the key members of a movement, Velvet Revolution, which overthrew communism in Czechoslovakia and one of the founders of the Czechoslovak Civic Forum Movement, the leading political organisation following the Velvet Revolution
Poor show
The credit for any reduction in poverty in the country goes to privatisation, de-regulation and liberalisation, not to the so called pro-poor expenditures.
Over a period of five years between 1999-2004, the government of Pakistan spent Rs.1 trillion on poverty reduction. According to the Finance Ministry, Poverty Reduction Special Programme included budgetary and non-budgetary expenditures both by the federal and provincial governments.
Now, the ‘Labour Force Survey 2005’ (first two quarters) reports that over the last five years, the government has spent a hefty amount of Rs.1332 billion on poverty-related and social sector programmes to help the poor and vulnerable sections of the society. The PRSP expenditures — budgetary and non-budgetary — during 2001-05 stood at Rs.1124 billion; the budgetary expenditures averaged 4.1 per cent of the GDP for the period. Of this, the government spent Rs.316.2 billion on pro-poor sectors exceeding the targeted Rs.278 billion by Rs.38 billion. And,
Renaissance for Reforms – Introducing a new book
Here is the Introduction by the authors:
The recipe for growth is well-known. Most economists would agree that lower taxes and less regulation can encourage entrepreneurship and job creation. Yet, many governments are unwilling to introduce such reforms. An important reason is concern over a voter backlash. Jean-Claude Juncker, a likely candidate for the EU-presidency after two decades as Luxemburg’s Prime Minister, famously lamented “We all know what to do, we just don’t know how to get re-elected after we’ve done it.” Based on an analysis of 109 governments in developed countries, we would suggest that Juncker’s view is mistakenly gloomy. Although market-oriented reforms may initially meet fierce resistance, governments that introduce them are more often than not rewarded by voters.
In our new book “Renaissance for Reforms” we look at the pace and direction of reforms in 29 OECD governments