Privatisation

Throughout the past couple of decades, privatisation has become a symbol of modern trend in the global economy. Privatisation is a transfer of property or responsibility from the public sector (government) to the private sector (business). The terms can be referred to partial or complete transfer of any property or responsibility hold by the government. Several developed and under developed nations have privatised their government authorities in order to trounce numerous short term obstacles. For an instance, the Conservative Government in the nineteen eighty’s and ninety’s in United Kingdom followed a large scale privatisation programmes. British Airways, Cable and Wireless, British Gas, Jaguar, and Rolls-Royce were among the major organisations and industries which were transferred to the private sector. However, certain state authorities are inefficient to handle their responsibilities; those establishments should not be privatised due to many reasons.

The Government is known as a “father like figure” in the economy and it provides therefore what is best for the nation. The prime objective of these state controlled authorities is the public welfare. As a result, various services for instance public libraries, street lighting etc, are provided free of charge. Hence, government authorities constantly attempt to attain a maximum amount of social benefits rather than individual profits. However, if these services are privatised, the private sector may not be able to encounter adequate finance to provide them. Consequently, these services would not be appropriately supplied and even if those services are provided consumers would suffocate by paying a higher price unnecessarily.

Essential industries such as education, health care and defense etc, should be controlled under the state authorities’. The above mentioned establishments are identified as strategic services in any economy. Furthermore, these industries require a lot of financial and professional guidance from the government in order to provide an improved service to the nation. Establishments like these are inexpensive and constantly appropriately monitored. Given that, these services are controlled and owned by the government the community would be benefited immensely. For instance, education in Sri Lanka is provided by the government free of charge and in return, it provides a vital service to the nation. As a result, Sri Lanka holds a literacy rate of almost ninety percent that is one of the highest in the Asian region.

On account of these nationalised establishments, the government should be able to triumph over several long term economical tribulations. Unemployment, inflation, balance of trade etc are the major macro economic issues that exist in the global economy. Unemployment has caused various difficulties to several countries in numerous ways. Consequently, many government authorities are inclined to remain in control of their establishments in order to provide many employment opportunities to the local community. However, if theses authorities are privatised, many of the employees would be redundant from their occupations since the private sector is extremely profit aggravated. As a result, private sector would cut down the labour in order to reduce the annual overheads.

A further argument for having a large sector of the economy directly under government control is that it can be used as a powerful lever to control the economy. For instance, during a recession, the investment programmes of the nationalised industries could be increased. Recession is defined as a fall in the total national production of a nation over two or more successive quarters. More over, government can also be restricted the price increases as means of reducing inflation.

When the government establishments are privatised, private monopolies said to exist. A monopoly is a market structure dominated by an individual organisation. In this case, all the natural resources would be owned and controlled by the private sector. As a result, private organistions may consume these valuable resources wastefully in order to trounce the short term financial benefits. Additionally, to the fact that these monopolies are extremely profit aggravated and the opponents would claim that these kinds of market structures are unproductive due to lack of affordability and quality of service provided to the society.

Therefore, as a dependable government, the national establishments should not transfer their properties or the responsibilities to the private sector. Certain authorities would be inefficient in different circumstances since the state authorities do not emphasis in profits. Even though, in the short run, privatisation provides immediate solutions to many financial tribulations nevertheless, it might cause many difficulties in the long run. The economic issues like unemployment, expensive and poor quality products and services, exploitation of labour and resources are some of the difficulties. Furthermore, privatisation would not be produced improved results to any economy. Therefore it is evident that privatisation is a mechanism of tribulation era.

Consequently, improving the prevailing state establishments would be the ultimate solution. As a result, many national authorities would be under state control. In addition, national assets would not be sold or misused for private decisions and more over the consumer needs would also be satisfied with the minimum of commotion. Furthermore, many of the natural resource and human labour would be efficiently utilised in order to provide an improved service to the consumers. Therefore, I strongly believe that privatisation is not the accurate solution for the inefficiency of certain government authorities and improvement in prevailing establishments would provide improved results in the long run.