Privatisation : an economic necessity with a social impact

Abstract

This dissertation is intended to be a study of the effects of privatisation on the economy and the likely social impacts that it may entail. The main focus of this discussion will be Malta but I will make use of examples from other countries for comparative purposes. I will explore the privatisation process together with its costs and benefits on the following terms: o Why are governments all around the world (from developed countries to developing countries) rolling back the state? o If the normal mechanism of exchange is through the market, what are the possible functions of government? Is it true that countries with high levels of government activity or high rates of increase in the levels of government activity would have lower growth rates? What proportion of the total resources of society should be consumed or invested by governments and how much should be left to private choice? What percentage of the workforce could or should be employed in the public sector? How has the Maltese Public Sector evolved over the last two decades? What is the present role of government in the Maltese economy? o What are the main reasons behind the privatization movement, as seen from the point of view of those in its favour? Is privatisation the cure for all ills? What are the possible negative impacts of such movement? o What are the important factors in determining the strategy and influencing the outcomes of privatisation for economic efficiency and consumer welfare? These determinants of success, above all, include country, market and institutional conditions. o How has the Maltese Telecommunications Sector been liberalized and modernized to meet the needs of today's consumer markets? Did liberalisation of the telecommunications sector bring the promised benefits to consumers? Will Maltacom p.l.c. remain enjoying a fixed telephony monopoly and if not is there room in the local market for another player? What type of regulators does Maltacom p.l.c. have to assure a good and fair service offered to consumers? o Do Trade Unions have an important role to play in the privatisation process? Should they be consulted and have their voice heard or are they simply there to distract government and lengthen the policy process? What are the views of the Federation of Industries' regarding the privatisation process? o Why are developing countries rolling back the state? Is privatisation the road to economic success? Here I will consider the case of Pakistan and briefly discuss the impact of privatisation in this country?