Trends and benefits of AID"s privatization program

This report reviews A.I.D."s privatization program, with emphasis on its rationale as detailed in A.I.D. policy guidance, and summarizes the program"s implementation through mid-1989. General program trends are described in regard to policy dialogue, technical and financial assistance, political action, the rural focus in Africa, and divestiture. The longest section of the report presents case studies of privatization programs in Latin America (the Dominican Republic, Costa Rica, Honduras, Jamaica), Asia/Near East (Bangladesh, Egypt, the Philippines), and Africa (Cameroon, The Gambia, and Malawi). The report concludes that the programs have been successful, both in achieving greater acceptance for the concept of privatization and in completed privatizations. Jamaica may represent the most impressive performer, having sold most of its hotels, most of its cement company, a major commercial bank, a portion of the telephone company, and several agriculture estates. Although some countries did not make actual divestitures, they have developed detailed, comprehensive strategies for divesting many of their state-owned enterprises. On the other hand, more information is needed to estimate the real measure of program success -- the improved performance and lower costs expected from the replacement of inefficient, government-managed monopolies by competitively driven and entrepreneurially managed enterprises. Recommendations to improve A.I.D."s privatization program are presented in conclusion.