Telecommunications and Privatization in Asia

Privatization viewed as a panacea for the most pressing problems besetting the modernization and development of telecommunications has become, in recent years, a widely accepted part of orthodox thinking. Wellenius, Stern, Nulty and Stern (1989) illustrate the point.How should privatization be defined?’ asks the International Finance Corporation (IFC, 1995). ‘A generous stance would admit any transfer of ownership or control from public to private sector. A more exacting definition would require that the transfer be enough to give the private operators substantive independent power.’ Hence, by privatization is usually meant the transfer of state-owned assets to private sector ownership, management and control typified by the sale of part or all of the shares of a state owned (and operated) telecommunications enterprise (SOTE). This paper argues that the ‘more exacting definition’ is exactly appropriate for the experience of Western economies from which it originates, while it is too narrow, too precise, insufficiently ‘generous’ to capture the less clearly defined lines of demarcation between public and private capital in the context of Asian telecommunications. The paper argues that this is because the delineation between state (political society) and civil society is less well developed in Asia, certainly less well articulated in law, and unevenly developed even within single large Asian countries.

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