Privatisation refers to the process of transferring ownership or control of a public or government-owned entity to private individuals or organizations. It involves converting a state-owned enterprise, such as a company, industry, or service, into privately owned and operated entities. This shift typically entails selling a portion or the entirety of the government's stake in the enterprise to private investors or issuing shares to the public through an initial public offering (IPO).
The objective of privatisation is to introduce market forces and enhance efficiency, competition, innovation, and profitability within the previously public sector. It is often done to encourage economic growth, achieve cost savings, reduce the burden on government finances, and stimulate entrepreneurship by allowing the private sector to deliver services that were previously provided by the government.
Privatisation can have various forms and degrees, ranging from full ownership transfer to joint ventures, concession agreements, or public-private partnerships (PPP) where both the government and private sector share ownership and responsibilities. It can be applied to various sectors such as transportation, utilities, telecommunications, healthcare, education, and financial services.
Critics argue that privatisation can result in job losses, reduced access to essential services for marginalized populations, increased inequality, and lack of accountability. Supporters, on the other hand, contend that privatisation can lead to better management practices, increased productivity, improved customer service, and overall economic growth.
