State Owned Enterprises
-
Upload
galenbepler -
Category
Documents
-
view
363 -
download
7
description
Transcript of State Owned Enterprises
Poland, China, USA
Galen BeplerNovember 19, 2009
This presentation provides examples of the limits and heights of enterprise privatization
PBS documentary, “Commanding Heights”: industries that control and support others, like oil, railroads, banking, steel◦ 0.00 to 2.22
Utilities: energy, communications, water Transportation: railways and aviation Banking : insurance & financial services Strategic sectors: steel, petrol, agriculture
Social and commercial ◦ Social welfare: job security, housing & education
subsidies, generous pensions◦ Commercial prowess
Soft-budget constraints Government appointments Negative productivity growth
Economists say…. Inefficient Low productivity Low profitability Stifles economic growth
4 banks in China Bank of China China construction bank Industrial and commercial bank of China Agricultural bank of China
General Motors◦ Became state owned on July 10, 2009◦ IPO will be issued in 2010
CNOOC, China National Offshore Oil Corporation◦ Shares traded in Hong Kong and New York
“Iron rice bowl” confronts WTO commitments◦ Unfair competition
“Commercialization” or stock distribution
“privatization through liquidation” or management/employee buyout
“Spontaneous privatization” or Auction or Tender
Will never please everyone
◦ Other methods: Negotiated Sale Stock flotation or Initial Public Offering Voucher or coupon privatization still in vogue ? Joint venture how foreigners must do business in
China Build-own-operate-transfer: BOOT agreements
infrastructure projects Leasing Management contract market reform in China
We are talking about property rights or ownership schemes
Which comes first? ◦ Privatization◦ OR◦ Property Rights regime
State ownership, a result of:◦ Historical randomness ◦ Systematic policy ◦ Specific, “commanding heights” industries◦ National financial crises, “nationalizations”
100% to 51% state ownership = SOE◦ OR, state ownership < 50% = private, but may still
confer the state with 49% management influence
Privatization has best results when part of a larger development strategy
World of corporate ownership is dynamic & hostile ! ◦ 0.30 – 2.05
◦ Hostile takeovers ◦ Corporate raids◦ Activist shareholding◦ Leveraged buyouts
Investment banks Speculators Portfolio managers Individual investors, like you & me. Entrepreneurs Consultancy firms, employees like you ? Government consul from US commercial
officers Employees & managers of corporations
Do you think privatization of SOE efficiently finances development ?◦ Which privatization method do you find “best”?◦ Pitfalls to certain privatization methods ?