Home
Privatization and partnership, which is more beneficial?
Economical 10/07/2024
Yasser Al-Metwally
Which is more beneficial, privatization or partnership?
Privatization is a method within the capitalist system that aims to convert capital assets owned by the state into private ownership as a tool for treating loss-making government companies.
As a reminder, in the period after the change, specifically during the era of Iyad Allawi’s government in the year (2005), a privatization body was formed that included experienced businessmen and government officials with special and high levels, headed by a well-known businessman and with the membership of ministerial undersecretaries.
At that time, I was assigned to work as a media advisor to the Authority, and I accompanied its activities until the end.
The goal of forming this body is due to the fact that there are more than (190) companies, most of whose factories were loss-making, including companies that went bankrupt without any production, and among them were companies that did not meet their expenses and the salaries of their employees.
The body conducted statistics and surveys of companies and classified them according to their production capabilities and suitability for work.
But with the change of governments, the authority was neglected, abandoned, and abolished.
The opinions of economists are divided between supporters and opponents of privatization, and
given the large costs and burdens that these companies pose on the budget, attempts have been made to support these companies with the aim of activating them, but to no avail.
Experts agree in the end that Partnership is the ideal way to revitalize troubled companies, introduce them into the business market, and make them productive.
Partnership is a new method that enters into the attempts of those in charge of economic reform to address and recover losing companies, as partnership is considered a type of partial privatization in all cases.
What is meant by partnership is the partnership of the public sector and the private sector, provided that Handing over the management of companies to the private sector while keeping ownership constant for the state, based on the recognition that the mentality of the private sector focuses on profitability in order to maintain production with high efficiency without wasting productive resources.
It seems that the prevailing trend now is to adopt the partnership method in order to achieve the following goals (which are calculated from Advantages of partnership: foremost of which is maintaining ownership of capital assets without compromising them, as well as benefiting from the expertise of the private sector to make companies successful and make them profitable, thus eliminating the burden of large losses that they were incurring.
There may be several reasons behind the failure of public companies, the most important of which is corruption and public administrations’ lack of interest in losses because financing is guaranteed.
The most prominent reason is uncontrolled openness, which led to making public companies unable to compete due to high production costs and was a peg upon which some failed administrations relied.
Therefore, it is clear from the above analysis that the partnership is economically more beneficial, and this is what most economists around the world agree on, although it is not without flaws.
The question remains: What are the challenges facing the partnership in Iraq?
The first challenge is the opposition of public company administrations to concessions to the private sector, and therefore its reasons and motives are of a privileged nature.
Moreover, the culture of the totalitarian regime is still entrenched in the minds of many, which makes us really need time to achieve an equal partnership preceded by binding laws and procedures that do not allow the applicable laws to object to the new management of companies.
We need to create efficient management by applying the conditions and controls of governance in a way that paves the way for a successful partnership.
So we need time, and the important thing is to start.
[You must be registered and logged in to see this link.]
Economical 10/07/2024
Yasser Al-Metwally
Which is more beneficial, privatization or partnership?
Privatization is a method within the capitalist system that aims to convert capital assets owned by the state into private ownership as a tool for treating loss-making government companies.
As a reminder, in the period after the change, specifically during the era of Iyad Allawi’s government in the year (2005), a privatization body was formed that included experienced businessmen and government officials with special and high levels, headed by a well-known businessman and with the membership of ministerial undersecretaries.
At that time, I was assigned to work as a media advisor to the Authority, and I accompanied its activities until the end.
The goal of forming this body is due to the fact that there are more than (190) companies, most of whose factories were loss-making, including companies that went bankrupt without any production, and among them were companies that did not meet their expenses and the salaries of their employees.
The body conducted statistics and surveys of companies and classified them according to their production capabilities and suitability for work.
But with the change of governments, the authority was neglected, abandoned, and abolished.
The opinions of economists are divided between supporters and opponents of privatization, and
given the large costs and burdens that these companies pose on the budget, attempts have been made to support these companies with the aim of activating them, but to no avail.
Experts agree in the end that Partnership is the ideal way to revitalize troubled companies, introduce them into the business market, and make them productive.
Partnership is a new method that enters into the attempts of those in charge of economic reform to address and recover losing companies, as partnership is considered a type of partial privatization in all cases.
What is meant by partnership is the partnership of the public sector and the private sector, provided that Handing over the management of companies to the private sector while keeping ownership constant for the state, based on the recognition that the mentality of the private sector focuses on profitability in order to maintain production with high efficiency without wasting productive resources.
It seems that the prevailing trend now is to adopt the partnership method in order to achieve the following goals (which are calculated from Advantages of partnership: foremost of which is maintaining ownership of capital assets without compromising them, as well as benefiting from the expertise of the private sector to make companies successful and make them profitable, thus eliminating the burden of large losses that they were incurring.
There may be several reasons behind the failure of public companies, the most important of which is corruption and public administrations’ lack of interest in losses because financing is guaranteed.
The most prominent reason is uncontrolled openness, which led to making public companies unable to compete due to high production costs and was a peg upon which some failed administrations relied.
Therefore, it is clear from the above analysis that the partnership is economically more beneficial, and this is what most economists around the world agree on, although it is not without flaws.
The question remains: What are the challenges facing the partnership in Iraq?
The first challenge is the opposition of public company administrations to concessions to the private sector, and therefore its reasons and motives are of a privileged nature.
Moreover, the culture of the totalitarian regime is still entrenched in the minds of many, which makes us really need time to achieve an equal partnership preceded by binding laws and procedures that do not allow the applicable laws to object to the new management of companies.
We need to create efficient management by applying the conditions and controls of governance in a way that paves the way for a successful partnership.
So we need time, and the important thing is to start.
[You must be registered and logged in to see this link.]
