Why a Privatization Web?
Editorial by the Technical Secretariat of the
Latin American and Caribbean Privatization Network
When words find their way into everyday language they are generally imbued with connotations and stereotypes. Privatization is one such word. Since the early 90s, it has become a common term in the economic and political spheres, and continues to give rise to heated debate between supporters and adversaries. For many countries it is perhaps too early to measure the results of the privatizations carried out; punctual evaluations would certainly prove more relevant, limiting these to specific operations or selected sectors.
But as the debate remains open, privatization continues to lunge forward, mobilizing huge flows of national and foreign capital, transforming business and financial structures, changing patterns of internal and external competition. Any attempt to hide or even overshadow its importance can be compared to an ostrich with its head hidden deep in the sand. In all the developing countries privatization forms an integral part of development strategies (and it should be pointed out that Latin America and the Caribbean has a leadership position in this field). The quality of the process per se needs to be a main concern, which is just as important as the results attained. Thus, we need to center our attention on the process from the moment it is formulated and place it within the context of the long-term economic plans of a society, incorporating the decision that the private sector will perform best in carrying out any given activity, including its subsequent supervision and regulation when the sale is completed, which is crucial when public services are at stake.
Privatization is more than the transfer of property from the State to private enterprises. The process involves all levels of State responsibilities. This activity must be in accordance with quality criteria and development objectives and its purpose should not be curtailed to resolving fiscal emergencies. Moreover, privatization provides an important tool that can be used to restructure the relationship between the public and private sector and a new distribution of tasks between them. At present this process of redefining roles is under way in all the countries involved, in both developing and industrialized countries alike, based on their individual needs and circumstances.
A formula has yet to be found that can guarantee an entirely successful privatization, and even more difficult would be a formula applicable to different national situations. However, one thing can be said about the privatizations carried out worldwide, namely that much more can be learned in connection with the government’s management of privatization policy and the behavior of private enterprises participating in said process.
The notion of a Latin American and Caribbean Network for privatization arose in 1996 together with the need to learn more about this process, exchange experiences, and recognize its importance as a means for the State to spur development. The Latin American Economic System (SELA), - which serves as the Technical Secretariat for the Network, -has turned its energies, since its creation in 1975, to supporting the governments of its 27 SELA Member States in the formulation and the implementation of their economic policies. When the initiative was launched to set up the regional network as a tool to buttress cooperation among government levels in charge of privatization, the World Bank also decided to support the endeavor. The World Bank has been accumulating ample experience in the area "in situ" of privatization and across the globe since the emergence of this process. Spanish authorities, through the International Cooperation Agency of Spain (AECI), have also demonstrated an interest in the initiative, and have offered their invaluable financial and technical support for all the activities of the Network.
What is the Network? Essentially it is a club whose main concern is to meet its members’ needs, basically: provide a venue for encounters, dialogue, forum for exchanging experiences, information and making contacts. Who would be its members? Above all, for the 27 Member States of SELA, through their respective agencies or government authorities in charge of privatization, in addition to the authorities of the Government of Spain. Academic institutions, private enterprises, experts, and consultants, non-governmental organizations and international and regional organizations that participate in or have an interest in learning about the privatization process will also be welcome to this club. To join this group no membership quota is required: the only requisite is that the member truly be interested in participating and contributing with information or suggestions for the Network.
The philosophy of this Network is quite simple, and is easily perceived throughout its organization as well as in its activities and web page: to learn from each others’ experiences and apply the lessons learned to individual cases. A dynamic "quid pro quo": informing and being informed. Provide support and hold dialogues with colleagues. The Network is not set up to churn out standard recipes but instead to extend the horizons for knowledge and contacts.
This web page provides information on the activities that have already been carried out and those scheduled under the framework of the Network: regional and sectoral meetings, training courses, dissemination of studies, contacts with networks similar to those of other regions of the world. The most significant facet of the Network is, however, that it allows direct contacts and interaction with users, and at the same time, the Network will grow as new data is provided. The bottom line will be determined by each of the participants: by the energy and enthusiasm dedicated by all of you. We look forward to hearing from you soon.
Manuela Tortora
Director, Economic Relations
SELA