WB expects increased privatization after temporarydecline

April 2010 -- A brief analysis produced by the World Bank's private sector development unit shows that the value of privatization transactions in developing countries fell by 70 per cent between 2007 and 2008. However the pro-privatization unit of the Bank notes with evident relief: "Concerns that the crisis would produce a wave of nationalizations appear to have been unfounded." It states that most government takeovers of collapsing banks and other firms were in industrialized countries and of a temporary nature. Furthermore, on the basis of preliminary data for 2009 the Bank believes that an upswing in privatization has already taken place: "The crisis itself has created pressures for privatization as increased government spending and declining revenues have led to growing budget deficits." In total value terms, 85 per cent of privatization transactions in 2008 were in the infrastructure and "competitive" sectors. Between 2007 and 2008, transport privatization fell by nearly half and water and sewerage by more than half. The sharpest declines in the value of privatization were in the financial sector, where there was a 98 per cent decline, and in the energy sector. Apparently only the extractive component, where the Bank did not register a single privatization in 2008, is included in the latter. The Bank did record several electricity and gas privatization transactions classified as infrastructures, and also notes an increase in telecom privatization. The World Bank's four-age analysis of "Privatization Trends" is available at: http://rru.worldbank.org/documents/publicpolicyjournal/322Kikeri_Perault.pdf SOURCE:
Peter Bakvis, ITUC/Global Unions - Washington Office E-mail: pbakvis@globalunions-us.org