Privatization And Liberalization: The Different Types Of Privatization

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THE MANY FACES OF PRIVATIZATION
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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