Privatization And Liberalization: The Different Types Of Privatization

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After the decision has been taken to privatize, it must now be decided how to do so. Privatization is an umbrella term with many faces. Three forms are identified below:
1. “Privatization through operational measures without loss of ownership - This refers to a form of management privatization. Here the government reduces its control on the activities of the state entity in order to facilitate efficiency;
2. Privatization through organization measures - This is a compromise between total privatization and complete government ownership. Private management initiatives are employed in the management and operations of the public enterprises. It has four variants:
a. Introduction of competition: This involves the introduction of competition by deliberately breaking the monopolistic hold, which the public enterprises hitherto enjoyed in their area of operations. This is a form of deregulation and liberalization.
b. Unbundling: This is a process of breaking down public enterprises into functional units as a basis for commercial operations. This is specifically applied for the privatization of utilities that often operate in a condition of monopoly.
c. Corporatization: This is a transformation of the mandate of the public enterprises into a public joint, which is a stock company, for the purpose of operating as a commercial concern and motivated by market imperatives and profitability of operations.
d. Leasing: Government under this arrangement,

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