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Home > Privatization Alert - January 2010
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Privatization Alert - January 2010
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Focus: Revenues from privatization declined in 2009
The financial crisis and economic recession took a toll on sales of state-owned assets in emerging markets in 2009. Global foreign direct investment declined by 39 percent to just over $1,040 billion, while direct investment into developing countries and transition economies fell by 35 percent and 39 percent, respectively (UNCTAD estimates). A modest recovery is expected this year, but a stronger rebound is not anticipated until next year.
The impact of the crisis on privatization proceeds was felt the most by the biggest privatizing countries. In Turkey, one of the most active privatizers in recent years, revenues from privatization in 2009 were less than half of those in 2008 (US$2.3 billion in 2009 compared with US$6.3 billion in 2008). The sharp decline in privatization revenues was also reflected in foreign direct investment received by Turkey, which declined by an estimated 56 percent to $8 billion in 2009 (UNCTAD estimates).
The picture for privatization revenues in 2010 appears to be mixed. Some countries (Poland, Russia and other countries in Eastern Europe) are boosting their privatization programs, aiming for stronger revenues to help them bridge fiscal deficits in the aftermath of the crisis. Russia anticipates revenues of $2.4 billion in 2010 through the sale of its shares in 450 state-owned enterprises slated for privatization, a target which is much higher than in previous years. In Poland, where privatization revenues were around 7 billion zloty in 2009, a new push this year to sell government stakes in public enterprises is aimed at further boosting revenues. Others (Ukraine) expect privatization proceeds in the post-crisis period to be small.
Status and upcoming transactions
Europe and Central Asia:
The Russian Federation is planning to divest at least 25 percent of Sovkomflot, the country's biggest shipping company. Poland has sold 10 percent of KGHM, Europe's second largest copper miner for US$720 million.
>> Complete list of regional project opportunities
>> Detailed country analysis by region
Sub-Saharan Africa:
Zambia has accepted four bids in the privatization sale of a controlling stake in Zambia Telecommunications Co., in which the government will retain at least a 25 percent stake.
>> Complete list of regional project opportunities
>> Detailed country analysis by region
East and South East Asia: Vietnam is planning to privatize Petrolimex and Vnsteel, but retain a stake of at least 75 percent in the former and 65 percent in the latter.
>> Complete list of regional project opportunities
>> Detailed country analysis by region
South Asia:
India reported that foreign equity participation in public-private partnerships (PPPs) has been very small; only 22 PPP projects have had equity participation by multinational enterprises out of 300 PPP projects. Pakistan is proceeding with the privatization of 23 state-owned enterprises, including the Pakistan Post Office Department, Faisalabad Electric Supply Company, Hyderabad Electric supply Company and Peshawar Electric Supply Company. Bangladesh is looking to approve a new policy on PPP's over the coming months to promote private investment for infrastructure development.
>> Complete list of regional project opportunities
>> Detailed country analysis by region
North Africa and the Middle East:
Tunisia is planning to privatize twelve companies this year. In Iran’s new privatization plan for this year, 55 percent of all companies slated for sale are in the oil sector.
>> Complete list of regional project opportunities
>> Detailed country analysis by region
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