Privatization Assignment
INDEX
Privatisation
Subject Page Number
Worksheet
Section 1 3
Section 2 3
Section 3 4
Section 4 5
Section 5 5
Analysis of article on privatisation 6
Bibliography 7
Privatisation
1. What is your understanding of privatisation?
Privatisation is the transfer of government resources and tasks to the private sector. This can include government assets, deregulation of industries, and outsourcing of government services and lastly, giving the consumer the option to purchase services on the open market with coupons or vouchers. (Hayden, 1997, pp.250-253)
2. Why would a country support Privatisation? What are the advantages of such a policy? And the disadvantages?
Privatisation can be used to restructure a troubled economy and stimulate productive use of recourses. Privatisation will protect private property rights and stimulate competition. Although the initial purpose of privatisation in South Africa was to enhance the free market system, recent developments emphasize the upliftment of disadvantaged communities. (Von Keyserlingk, C 1994)
Advantages of privatisation include:
Through privatisation companies earn more profits because of higher efficiency.
It enhances the free market system and reduces the public tax burden and through privatisation the government’s income base increases.
Allows members of the community to participate in the economical system. Lastly and especially in the South African context, the redistribution of wealth and upliftment of previously disadvantaged people remains one of the biggest advantages of privatisation. (Hayden, 1999, pp.250-253)
Disadvantages of privatisation include:
Government assets selected for privatisation are fixed and once sold the transaction is irreversible and the government loses control over its assets. Because of the private sectors endeavours of efficiency, unemployment can increase. Previous government employees
Privatisation
Subject Page Number
Worksheet
Section 1 3
Section 2 3
Section 3 4
Section 4 5
Section 5 5
Analysis of article on privatisation 6
Bibliography 7
Privatisation
1. What is your understanding of privatisation?
Privatisation is the transfer of government resources and tasks to the private sector. This can include government assets, deregulation of industries, and outsourcing of government services and lastly, giving the consumer the option to purchase services on the open market with coupons or vouchers. (Hayden, 1997, pp.250-253)
2. Why would a country support Privatisation? What are the advantages of such a policy? And the disadvantages?
Privatisation can be used to restructure a troubled economy and stimulate productive use of recourses. Privatisation will protect private property rights and stimulate competition. Although the initial purpose of privatisation in South Africa was to enhance the free market system, recent developments emphasize the upliftment of disadvantaged communities. (Von Keyserlingk, C 1994)
Advantages of privatisation include:
Through privatisation companies earn more profits because of higher efficiency.
It enhances the free market system and reduces the public tax burden and through privatisation the government’s income base increases.
Allows members of the community to participate in the economical system. Lastly and especially in the South African context, the redistribution of wealth and upliftment of previously disadvantaged people remains one of the biggest advantages of privatisation. (Hayden, 1999, pp.250-253)
Disadvantages of privatisation include:
Government assets selected for privatisation are fixed and once sold the transaction is irreversible and the government loses control over its assets. Because of the private sectors endeavours of efficiency, unemployment can increase. Previous government employees
Bibliography: Haydam N E, 1997, Principles of Microeconomics, Van Schaick Publishers 2nd edition, Pretoria. Kitching K, 2005/2006, BML Programme, ENM 113, University of the Free State Press, Bloemfontein. Saayman, J N P 1989, Privatisering: Implikasies vir bestuur, Nagraadse Bestuurskool, Universiteit van Pretoria, Pretoria. Die Volksblad, 2002, “Telkom – Privatisering”, Die Volksblad, 3 Oktober, p.3. Beeld, 2007, “Slae vir Mittal”, Beeld, 28 Maart, p.16. Privatisation, [online]. Available from: http://www.bized.co.uk [2 April 2008] Von Keyserlingk, C 1994. Privatisering sal HOP en staatskas so help. Sake Beeld, 17 Julie.