Establishing privatization fund
Description
Establishing a privatization fund involves creating a dedicated financial mechanism to manage and allocate proceeds from the sale of state-owned assets. Its core purpose is to ensure transparent, efficient use of privatization revenues, supporting economic restructuring, debt reduction, or social programs. This strategy addresses issues of mismanagement and lack of accountability in asset sales, providing a structured approach to reinvestment and fostering public trust in the privatization process.
Context
In developing countries, privatization is often hindered by the absence of a well-developed private sector, limited absorptive capacity in local capital markets and a reluctance to sell public assets to foreigners.
Implementation
A Commonwealth Privatization Fund is proposed to be set up, as a commercial investment fund to buy shares in privatized companies. The fund will target investment opportunities in Commonwealth developing countries. It is anticipated that the Fund, acting as a minority shareholder, could provide a demand for privatized assets and bring in foreign exchange as well as knowledge and skills in financial services without seeking a controlling or managing role. Managed on commercial lines, the fund of around US$50 million would be comprised of resources raised from the market, without seeking finance or guarantees from governments.
Broader
Facilitates
Value
Metadata
Database
Global strategies
Type
(D) Detailed strategies
Subject
Content quality
Yet to rate
Language
English
1A4N
J3073
DOCID
12030730
D7NID
224296
Editing link
Official link
Last update
Dec 3, 2024