Advantages And Disadvantages Of Privatization
Disadvantages of privatization
1. The problem of monopoly
The first drawback will be a potential of monopoly by big companies. Although there are oppositions argue that privatization can introduce market forces and competitions which can motivate the improvement of services and performance, there is still a possibility for monopoly by the big companies which will dominate the markets and hinder the freedom of economic market. As the LINK is a private sector, their ultimate goal is always profit maximization, they will collect higher rent when comparing to the Housing Authority. Those small individual tenants are forced to close down as they cannot afford the increasing land rent, the shops remained will be those big-chain shops. Small business can hardly survive as they are not as competitive with ParknShop or Manning which can pay for the high rent. The variety of shops decrease and only limited choices are provided, this creates the problem of monopoly. Moreover, the sense of community will also be weakened as all of the small tenants usually have close relationships between neighborhood shopkeepers. This will also lose a lot of local culture and shops with their own characteristics. The shops in the mall are no longer reflecting the public desires or expects but the one who can afford the high rent. The accumulation of condemns and discontents towards the replacement of big chain shop may lead to the problem of social stratification.
2. The nature of service changed
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