Privatization grows amid battle for funds<\/p>\n
SINGAPORE (AFP): Asia's feverish pace of privatizing public
\nenterprises has been undeterred by economic difficulties but the
\nregion will have to compete harder for investment capital,
\nexperts at a World Bank-sponsored conference said Monday.<\/p>\n
\"The economic turmoil has heightened financial pressures on
\ngovernments and, therefore, one of the key drivers of
\nprivatization which is proceeds maximization is now very much in
\nfocus Asia-wide,\" said Richard Orders, chairman of Dutch bank
\nABN-AMRO Asia Corporate Finance Ltd.<\/p>\n
But Orders said the regional economic crisis triggered by
\nrapid currency depreciations since mid-1997 had forced
\ngovernments to market their privatization bids more aggressively
\nbecause of competition from Eastern Europe and Latin America.<\/p>\n
\"Price and quality are now much more in emphasis than they
\nwere ever before,\" Orders told reporters on the sidelines of the
\nWorld Bank-Asia-Pacific Privatization Network (APN) Convention.
\nThe APN, established with help from the World Bank in 1995, is an
\ninformal association of ministers and other senior officials
\ncharged with implementing privatization plans in Asia.<\/p>\n
Orders said potential investors in Asia's privatization
\nexercises would scrutinize the region's regulatory environment,
\nquality of management and market position of companies much more
\nclosely than before.<\/p>\n
\"Price and quality are now much more in emphasis than they
\nwere ever before,\" said Orders, whose bank actively raises funds
\nfor private infrastructure in Asia.<\/p>\n
Kevin Young, manager of the World Bank's privatization
\nservices group, told AFP that Asian economies were \"pushing very
\nhard\" to expand privatization programs.<\/p>\n
\"I don't know of any country that is reducing the program
\nbecause of the turmoil,\" he said, citing Thailand, Indonesia and
\nSouth Korea -- the worst affected by the crisis -- to be among
\nthe most keen in privatization.<\/p>\n
Young said that China and India, which have probably the
\nlargest number of state sectors left in the world, had also
\nproposed expansion of their privatization programs.<\/p>\n
\"What Asian governments are seeing is that privatization is
\nthe kind of reform they need to get out of their difficulties --
\nthis is part of the solution not part of the problem,\" he said.<\/p>\n
Young said the \"two very big issues\" facing privatization in
\nAsia were how to deal with labor in state enterprises farmed out
\nto the private sector, and how to market privatization exercises
\nmore effectively.<\/p>\n
Last year, the World Bank estimated that about 13 billion
\ndollars' worth of state enterprises were privatized in Asia, with
\na large portion in China.<\/p>\n
\"I think the trend is up so far this year,\" Young said.
\nLondon-based publication Privatization International said in a
\nreport circulated at the conference that on a global scale,
\nprivate investment in infrastructure was estimated at
\napproximately $60 billion a year.<\/p>\n
It said power and telecoms dominated private infrastructure
\ninvestment, followed by transport and then water and waste
\nprojects.<\/p>\n
Orders of ABN-AMRO Bank said initial public offers (IPOs)
\nwould be the main driver of privatization in Asia but trade sales
\n-- in which governments allow strategic stakes in key industries
\nto go to particular investors -- would gain momentum because of
\nthe regional economic crisis.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/privatization-grows-amid-battle-for-funds-1447893297",
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"sponsor_url": "https:\/\/okusiassociates.com"
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