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Janusz J. Tomidajewicz
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Title: Janusz J. Tomidajewicz
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Janusz J. Tomidajewicz
- Privatization issues in Central Europe Countries
(the case of Poland)
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Introduction
- Particular features of privatization in countries
transforming their economy from central managed
into free market have resulted mainly from - Privatization and liberalization have been the
instrument of transition into free market
economy, therefore privatization became the goal
itself. - The issue and the scope of privatization was very
wide, it included privatization of the whole
production sector, financial services and large
part of institutions of culture, social services,
infrastructure, etc. - The process of privatization has reached serious
barriers of capital and social character. - Privatization has become the instrument of
employment rationalization. - National enterprises have had many social roles
before their privatization.
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- Such situation brought specific social and
economic problems connected with processes of
privatization. It had impact on the process, as
well as economic and social consequences of
privatization. - Present paper tend to analyze repercussions of
privatization process connected with - Institutional and organization aspects of process
of privatization. - Economic effects of privatization.
- Social effects of privatization.
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1. Factors of privatization in Central European
Countries
- Political and macroeconomic character of
privatization aims. - Scope, directions, rate and sequence of
privatization. - Capital barriers of privatization.
- Social barriers of privatization.
- Privatization as instrument of rationalization of
employment - Social functions of state enterprises.
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1.1 Political and macroeconomic character of
privatization aims.
- The economic policy stood up in the face of the
problem whether forming the market economy is
possible without simultaneous (or even earlier)
of replacing dominating state enterprises, by
private enterprises as dominating organizations
in the market. - Under the influence of the small and average
enterprises and different international
institutions in the practice of the economic
policy they assumed that increasing the scope of
the private sector in the economy was a basic
condition and at the same time expression of
going to the market economy. - In view of the fact that chances of the coming
into existence of the strong private sector on
the founding road are very little they recognized
that a privatization of current state enterprises
must become essential means of transforming the
economy. - In the process the privatization alone in itself
became the purpose of the economic policy and the
amount of privatized enterprises and the growing
participation of the private sector in producing
the GDP became basic indicators efficiency of the
transformation politics
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1.2. Scope, directions, rate and sequence of
privatization
- An assumption was made that, privatization to a
considerable degree independently of what
sectors, enterprises or fields it concerns and
with the help of what tools is a process
accomplishing purposes of the economic policy
realized. - Issue of the selection of directions and methods
of the privatization examined was above all from
a point of view of their effectiveness measured
with the amount and the pace of privatization.
However to a little extent here an economic and
social effectiveness of processes of the
privatization was being taken into consideration.
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- Essential problems of choice about methods of the
privatization concern - what rate of the privatization should be i.e.
whether to carry it out possibly quickly or to
spread this process in the time? - whether to privatize good enterprises at first,
whether than those having problems? - whether to privatize enterprises for which it is
possible to get the fair price on the capital
market or all enterprises too every (even clearly
lowered) price provided that to cause the
privatization? - In the practice of the economic policy they were
deciding for solutions allowing quickly to carry
the privatization out, independently of whether
privatized enterprises demonstrated the high or
low ability to be active in conditions of the
market economy and independently of the price
with which it was possible to get at their
privatization.
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1.3 Capital barriers of privatization
- According to estimation made before beginning the
transformation, in Poland all money supply of the
population and individuals of the unnationalized
economy constituted c 10.7 value of the
production wealth of the nationalized economy.
However donating even an entire one-month
workers' pay to the repurchase of shares in
privatized enterprises annually, would require in
order to 60 70 of years for buying out the
wealth of state enterprises by their workers, at
simultaneous backing up the entire operation with
credit tools. - Z. Fedorowicz, Obiektywne uwarunkowania czy
chciejstwo (Objective conditioning or the wishful
thinking) , Zycie Gospodarcze, nr 10/1988 - In the first years of the transformation, the
invited foreign capital came across the barrier
into forms of the high-risk assigned in this
period to investments carried out in countries of
Central Europe.
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1.4 Social barriers of privatization
- 1- anxiety of employees of privatized public
enterprises concerning employment, level of
remuneration and social benefits. - 2- existence of claims for managing enterprises
by workers (in companies where some
self-management experience appeared). - 3- anxiety of the society concerning foreign
capital.
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1.5 Privatization as instrument of
rationalization of employment
- Dr W.Dymarski will elaborate present subject more
widely in its paper. - Here we will mark only, that a phenomenon of the
exaggerated and ineffective employment became the
particular sympthom of the irrationality of the
socialist economy causing the hidden
unemployment. - In such situation the privatization was treated
as the tool of restructuring of both individual
enterprises and the economy as the whole,
including particularly the tool being supposed to
lead for eliminating the overemployment.
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1.6 Social functions of state enterprises.
- State enterprises, served social, enabling the
access for one's workers on preferential
conditions to cheap meals in the place of the
work, the health care, the care of the child,
holiday rest, the involvement in the culture,
etc. - From social activity a coming into existence of
the following problems caused the back-pedalling
of enterprises requiring to answer - deciding or cutting businesslike welfare security
benefits on the part of enterprises will be (and
if necessary in what stage) compensated by
appropriate raising monetary workers' profits, - whether and how to privatize current activity
social keeping enterprises object of this
activity, in which whereas step simply entirely
to close this activity down.
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2. Course and consequences of privatization in
conditions of transition
- 2.1 Institutional and organization aspects of
process of privatization - 2.2 Economic effects of privatization.
- 2.3 social consequences of privatization.
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2.1 Institutional and organization aspects of
process of privatization
- Significance of dispensing public enterprises and
non-equivalent methods of privatization, - Importance of public administration in process of
privatization and its character causing
corruption as a consequence of such state, - Significant dependency of capital market from the
process of privatization.
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2.2 Economic effects of privatization.
- Ownership structure national and foreign capital
- Capital as instrument of realizing development
aims and of ownership transition - Restructuring of sectors and enterprises
- Microeconomic efficiency of companies activity
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Percentage share of foreign capital in industry
and banks in 1999
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Use of capital
- Directing the considerable part of free funds to
take over meant ownerships of current state
enterprises, around these means weren't left
directed for developmental investments and
restructuring. The process of privatization was
connected with a specific crowding-out effect of
investment. the privatization through the
crowding-out effect became the factor influencing
for lowering the pace of the restructuring and
the development of privatized economies.
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2.3 Social consequences of privatization
- Distribution of benefits resulting from
privatization in the society - Impact of privatization on situation on labor
market - Impact of privatization on range and
accessibility of social benefits
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Conclusions
- Privatization has brought such economic
consequences, like - Foreign capital inflow
- Reduction of investment capacity in economy at
least in its preliminary stage - Structural changes expressed by development of
low capital capacity and services sectors - Increase of microeconomic efficiency of
enterprises with simultaneous liquidation of
significant number of non-efficient companies.
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- From the social part privatization has brought
- Significant benefits for foreign capital, part of
management of formerly national enterprises, part
of former and new private sector - Reduction of position of employees and trade
unions in enterprises and aggravation of labor
relations - Reduction of social benefits accessibility,
particularly for employees with low remuneration.
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