The recent World Bank study of privatization in four countries—the United Kingdom, Chile, Malaysia, and Mexico—offers compelling evidence of its benefits: in 11 of the 12 cases studied, privatization did indeed create wealth; on average, consumers gained; and employees as a group either were unaffected or actually profited, sometimes substantially. In Asian countries outside Japan there is enormous potential for creative mixes of public and private initiatives to support economic development. This article examines both the World Bank's endorsement of privatization and Asia's tentative response. It also suggests a potentially more robust framework for industry and enterprise transformation.
With privatization a priority for many governments worldwide, the World Bank's recently published privatization case studies and policy report are particularly timely.1 And their conclusion—that privatization improves performance, creates incremental wealth, and distributes benefits to investors, governments, and customers in a fairly equitable way—will presumably act as a further spur to privatization. The policy report certainly calls for large-scale and urgent divestiture.
Asian countries' frequently ambitious plans and rhetoric seem at odds with the reality of slow progress and hesitancy
Asia's prosperous and fast-growing economies, often heavily influenced by government control and state enterprise, would appear to be ideal candidates...