Pros and Cons of Privatization Essay - 1136 Words

Privatisation means transferring the control of an enterprise from the government sector to the private sector. Generally, but not always, this also means transferring ownership of the Public sector enterprise as well as control. It can be accomplished by sale or lease. It can be accomplished by the government selling 100% of an enterprise, or selling 51%, or even by selling a minority stake - so long as the private sector is given full managerial control. Without transferring control to the private sector, the government can rise money by selling a smaller share, but that is not privatisation as such. PROS * Stops loss-making PSUs from adding to government debt; *†¦show more content†¦* No one worries about economizing when they spend government money, but everyone worries about spending his or her own private money. So private owners and their employees have a stronger incentive to make their own enterprise succeed; * Bureaucrats top concerns are obeying elected leaders, keeping peace with the unions, and other concerns which are essential in government. But these are not the main priorities of business. The priorities of business are cot-efficiency, competition, and satisfying the customers. So, compared to businesses, PSUs often suffer from interference or neglect. For private owners, the economic success of their enterprise is their top priority; * Even when a PSU is well-managed, cash-poor governments cannot give it the investment capital it needs for new equipment and staff-training. Private owners have better access to investment money to help the business grow. privatization change whole economies Privatisation can make poor economies richer, increasing development far beyond the immediate sectors being privatized. Basically, * It reduces the economically-crippling government debt; * It turns loss-making, tax-eating PSUs into profitable, tax-paying businesses, giving government more money to spend on infrastructure, schools and hospitals; * It provides goods and services more efficiently than under government management, generally resulting in better service andShow MoreRelatedComment on the pros and cons of privatization of social welfare services in Hong Kong society. Use the â€Å"LINK-REIT† as an example to illustrate your answer.4288 Words   |  18 PagesTOPIC 6: COMMENT ON THE PROS AND CONS OF PRIVATIZATION OF SOCIAL WELFARE SERVICES IN HONG KONG SOCIETY. USE THE LINK-REIT AS AN EXAMPLE TO ILLUSTRATE YOUR ANSWER. INTRODUCTION The Link-Reit (Real Estate Investment Trust) has long been a controversial issue ever since its launch. The issue in fact concerns the privatization of welfare services. 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