What Is Privatisation? Briefly Discuss The Three Forms Adopted For Privatizing Public Sector Enterprises?


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What are  the types of privatisation for Agriculture within the Pacific Region?

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Privatization is the incidence or process of transferring ownership of a business, enterprise, agency or public service from the public sector (government) to the private sector(business). In a broader sense, privatization refers to transfer of any government function to the private sector including governmental functions like revenue collection and law enforcement.

Types of privatization
There are three main methods of privatisation:

2.ASSET SALES PRIVATISATION - selling the entire firm or part of it to a strategic investor, usually by AUCTION or using the TREUHAND model

3.VOUCHER PRIVATISATION - shares of ownership are distributed to all citizens, usually for free or at a very low price.

Share issue privatisation is the most common type of privatisation.
Share issues can broaden and deepen domestic capital markets, boosting liquidity and potentially economic growth , but if the capital markets are insufficiently developed it may be difficult to find enough buyers, and transaction costs (e.g. Underpricing required) may be higher. For this reason, many governments elect for listings in the more developed and liquid markets, for example LONDON. NEW YORK, HONG KONG ETC STOCK EXCHANGES.

2.As a result of higher political and currency risk deterring foreign investors, asset sales are more common in DEVELOPING COUNTRIES.

3.Voucher privatisation has mainly been used in the TRANSITION ECONOMIES of Central and Eastern Europe, such as RUSSIA, POLAND, CZECH ETC.
A substantial benefit of share or asset sale privatisations is that bidders compete to offer the highest price, creating income for the state in addition to tax revenues. Voucher privatisations, on the other hand, could be a genuine transfer of assets to the general population, creating a real sense of participation and inclusion. If the transfer of vouchers is permitted, a market in vouchers could be created, with companies offering to pay money for them.

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