Private sector development: the creation of markets and transform lives
There is no denying the fact that today, privatization, established social fascination and curiosity fall largely imitated the task of the state in national economies, at the same time, the Committee adopted active measures to enhance the scope of private property and private sector development. Such a trend has developed twenty years. The increasing demands of privatization to take into account both the desire to design for small sand and credibility in the performance of private sector economic progress as a stream of principles.
1. Privatization: definitions and rationale
Track an economist in the world has defined privatization as follows:
"The increasing use of privatization as a set of strategies for restructuring the public sector is growing dissatisfaction with the organizational structure of public-sector. It is alleged that the letter Agency rejoinder Weberian bureaucracy usual approach serious problems of control and efficiency "
The meaning of privatization of public goods Alternative originate with the private sector in the preamble of management techniques in the private sector the public sector. Although awareness was raised both in the beautiful illustration of the first type of phenomena in the private sector and market making, including the sale of public enterprises, the largest type of privatization is the pursuit of internal reform in the public sector under the authority of private management style.
As for the expansion of private sector markets through the introduction of several products are of vital importance. In 1991, Hartley and Parker has done research on the private sector and privatization jointly defined in a broader view as follows:
"Privatization and denationalization of the state provides goods than it sells, deregulation, liberalization, competition, collectively with the introduction of private property and the market in socialist states. Eastern Europe and the USSR can be illustrated in wanted to address. "
Suffice it to say that privatization is the deliberate choice of the various plans to adjust the balance between sectors public and private.
The underlying principle of privatization, but very versatile, has been well summarized by Kylie, and Polidano Hume in 1998 in the following way.
"Increasingly, the private sector is considered to have management skills, flexibility and essential unity of competition for the efficient provision and effective for many activities previously considered in the prefecture of the public sector.
Thus, the disenchantment with public education launched privatization, noting that "In many countries the public sector has ceased to be the engine of national development in some countries there is even the main obstacle to development. "
2. Approaches to privatization
In 1988, Cook and Kirkpatrick have identified three main approaches to privatization:
Change in ownership of a company from public to private sector. Denationalization or assignment may be the means to achieve it.
Privatization through liberalization, deregulation, the entry into activities previously restricted to public sector enterprises. He held that the removal of restrictions is intended to enhance the role of competition in previously protected markets, a variant of privatization has taken place, although no transfer of ownership assets have been involved.
When the supply of a good or service is transferred to the private sector the public sector, while the government is ultimately responsible for the service delivery. The franchise, subcontracting, public services and rental of public assets to private sector industries are examples.
The privatization policy has partnered with several objectives. Introduction or expansion of market forces is reflected in the profit motive, competition, greater efficiency and innovation should benefit consumers. The privatization policy has also been linked to a desire to share ownership of more and create a system democratic ownership, while in some cases, the policy aims to cut the size of public sector denationalization.
"The proposals have prospects have also been made in some countries (eg the United Kingdom, Malaysia, China and South Africa), the real purpose of policy is to reduce the monopoly power of public sector unions. "But some of the above objectives can be contradictory. Shrink public sector by selling public assets may not be compatible with the objective of efficiency if it is simply to transfer the power of public sector monopoly the private sector without ensuring competition and rivalry. Maximize the number of shareholders can be achieved by the lowest price action, which is conflict with the objective of maximize the revenue of the treasury in accordance with the rules and the prospects of particular phenomena.
3. Privatization and economic efficiency
While privatization may be processed by one or all of these reasons, the central question revolves around privatization based business performance and efficiency. But the performance gains of increased efficiency arising from increased market competition as a change of ownership. "If the main objective privatization is to increase economic efficiency, policy priority should be to increase competition, not to transfer the production sector Private (Cook and Kirkpatrick, 1988).
A case study in Bangladesh in the analysis of intertemporal trade in fertilizer, before and after privatization has shown that deregulation helped launch the free-market forces and increased competition. It also increased the availability of fertilizers to farmers and improve efficiency and productivity (World Bank, 1996b). But change for the better in economic performance depends not only property but also in the competition and freedom management.
Besides the objective of efficiency, WFP has committed to privatization, for various reasons: to generate cash income, Instant to encourage specific types of industrial development, encourage foreign investment, improve or develop the capital markets, or applying a philosophy of economics free market and the development of cases of privatization is based on:
Public ownership is more widespread than can be justified in the context of economy mixed
In the performance of public enterprises is on the private business and
The intrinsic characteristics of public ownership – Such as excessive government intervention – are often the cause of inefficiency.
5. The limits of privatization
For developing countries, Turner and Hume (1997) have identified certain restrictions that limit the success of privatization. They are the lack of complex and specialized skills required to manage A program of privatization, lack of developed securities market, the lack of attention out as part of a comprehensive economic reform and the current political environment.
"The resistance to reform of public enterprises also trade unions. These can be well organized, numerically strong and good relations policies.
Thus, the success of reforms, including privatization, World Bank (1995), three conditions must satisfy the political
Reform must be politically desirable to the leadership and their constituencies; political benefits outweigh the political costs.
Reform must be politically viable: leaders must be able to overcome the opposition, or compensation or enforce the losers.
Reforms must be politically credible major stakeholders (eg employees, investors).
AND FOOD SECURITY: THE CENTRAL on prospects private sector
Definition and interpretation of food security, and reliable measure, forms were found valid and profitable research problems obstinate face and programs to monitor food security risks. "Malthusian specter of famine" has haunted responsible, in recent decades to adopt a comprehensive food security policy to avoid any crisis. Given its enormous importance in political life – saving of a democratic society, as such, Attempts have been made to define food security.
1. Food security: definitions
The sharp rise in global food prices in last two years of the World Food Conference in 1974 and fears that the global food system is running out of control, the UN focuses these concerns In its final report to speak clearly and fairly defines food security:
Availability at all times an adequate supply of food world-core staff to support a continued expansion of food consumption. To compensate for fluctuations and prices.
The main components of the most common definition of food security are summarized by Maxwell and Franken Berger (1992) as "secure access at all times to enough food for a healthy life," summarizes the literature theoretical food security and finally Maxell Berger Franken concluded:
"First," enough "food is defined. focusing on calories, and the requirements … .. For a healthy and active life rather than survival – although this assessment may be so subjective. Secondly, access to food is determined by the rights of foods derived from human capital and physical asset and supplies, access to common property resources and variety of social contracts at household, community and state. Third, the risk of default law determines the level of vulnerability and therefore the level of insecurity food, the risk is higher, the proportion of resources ….. dedicated the purchase of food. Finally, food insecurity can be permanently (Chronic) or temporary (transitional) or cycles.
A complete definition of food security which includes concepts to access, sufficiency, safety (or vulnerability), and sustainability.
Maxwell (1996) identified three important and overlapping changes paradigm in the history of food safety in mind from the World Food Conference in 1974. These changes are:
1. the global and national and individual home
2. view first meal at the prospect of living and
3. Objective indicators of subjective perception (ibid.).
It also identifies the development of food policy in a historical perspective and notes that "the term has been applied more recently a local level and has spread beyond notions of food supply to include elements of access, vulnerability and sustainability "
Food security, which, in the true sense, covers a vast landscape that involves
"The access of any person at all times to enough food for an active and healthy life "(World Bank, 1986, p. 1). But availability does not necessarily mean that access to food. Working on historical data, striped-Anderson and Pandya-Lorch (1999) showed that "increased availability of food has not been accompanied by access to relevant benefits" between access and availability drivers that influence their relative position. While the levels of other income and economic growth, human resource development and population growth and movements are the factors that influence access. Therefore, a complete security food policy must include the availability, access and use aspects. Unfortunately, in an underdeveloped economy, food security discussions and planning, it is often forgotten and have a close, an overemphasis on the estimated "Food gap, the difference between a target level of availability and domestic production. However, food analysis" gap "focuses availability of basic grains only, thus neglecting other foods. In addition, the emphasis on the food gap "is often misused care Other important aspects of food security: access and use.
Policy Options for Food Security
Thus, access and availability has established itself as the most important pillar of food security because of its importance can be rationalized in terms of stability of production. But a major characteristics of agricultural production is the production instability. Some of the main causes of this are climatic variations and reaction dynamics late for farmers to instability before or other impacts such as changes in government policy. In a market economy, the overall effects of instability production and lead to changes resulting from changes in prices and incomes in the product market directly affected and related markets for goods, services and resources. Are these changes in prices and / or income from the production instability that create problems for most groups in society. Similarly, the volatility price reduces the potential for investment by the private sector in marketing off-farm and processing facilities. "Consumers, in general, including will be directly affected by the instability of agricultural production through its effect on the availability and prices of foodstuffs. These impacts may be more severe in low-income economies, and low-income households, where food represents a significant part of total expenditure. In these circumstances, changes in the prices of food commodities and / or lead to changes in the availability of real income or purchasing power and food security in the sense that food access, availability or compromised. "Falcon (1987) commenting on food security, however, identified both supply and demand side policy options at national level. According to them, offering policy options include secondary national buffer stocks, imports, and even the use of futures markets, and domestic production has increased. policy options to the consumer include a series of direct measures to reach low-income consumers and, more recently, increasing attention to the importance of the pricing of food. This implies that supply-side policies are affected by the efficiency macroeconomic – the determination of all policies on global food security is the most efficient and therefore less costly to the economy. Moreover, consumption policies to maximize profits by implication – the acquisition of equity for disadvantaged consumers.
"The policy of food prices is the link between supply and consumption goals. "This also implies that to achieve food security, a policy prescription containing both the supply and options for implementation is necessary, and after Falcón et al (1987) policy on food prices, among others, prices stable foods play a key role in achieving food security. But Greenfield et al. (1996) argue that the task of stabilizing prices after the implementation the Uruguay Round Agreement on Agriculture should be smaller, for a benefit granted in the Uruguay Round reduced price instability.
4. Food safety and price stabilization
Although initially it was explained that the fall of "food availability" Hunger, Sen (1981) found that the absence of "right" is the cause. In examining the cause of the famine, he noted, "This is considered the result of its inability to establish the right to adequate food, the issue of physical availability of food is not directly involved. "Presenting the right of return", says relative prices are important in explaining the famine, especially a sharp rise in food prices and wages with the money given the right to food is reduced to a large margin. This also suggests, particularly in regard to food security, there is an intrinsic value of the price situation.
However, Smith (1997) attempts to link the price of food security by increasing supply. So, we introduce the concept of "territory" and arbitration "intertemporal." He said
"Of course, the stabilization of prices in the face food shortages do not guarantee the security food. However, in a particular area, price volatility can be reduced and improve food security, either by arbitration space, that is, moving supplies from surplus to deficit areas, or by intertemporal arbitrage, ie, storing supplies in times of plenty free in times of scarcity. "Arbitration however, is a costly exercise and these costs can be clearly identified but often ignored by governments. Many of the benefits of stabilization are related to producers, consumers and investors confidence that may have effects are not quantifiable but valuable in the growth of the economy.
Islamic and Thomas (1996), other hand, have identified the objectives of price stability is something greater than the reduction of the variability of real prices.
"This to guarantee a minimum price or an incentive for producers and a maximum price to protect consumers, especially consumers, increased or sudden high price of food, greater self-sufficiency in basic grains and the highest possible revenue for maintaining currency high and stable prices. Stabilization price itself, in the sense of reducing the variability of real prices of a certain percentage, was not the only objective.
Even the World Bank (1996a) commenting on the food security situation in Bangladesh, argues that lower domestic prices of rice which makes it more expensive
"This flexible approach is the most effective way to improve the welfare of poor households, and that, overall, most of these households are net consumers of rice instead of producers, and Rice dominates their food intake. Economist Benham said: "The test of food security affects the living standards of people and virtually provisionally"
Reasons for the creation of private sector in terms of market prospects of public sector
Timmer (1985), while justifying the role of government have argued that a dual market is a secondary market through the public distribution system and the private market through other phenomena of the distribution sector. Their point of argument is that if some poor people are excluded from the system (ie, deprived of cereals public distribution system of food), which are the most disadvantaged. Not only refused grain at low prices in ration shops, but the free market price is now much greater than it would have been in the absence of double price. But the justification for government intervention, in particular the role of pricing policy by the government, is a major issue and the ongoing debate. In this regard, Timmer (1989) identified a three-way debate in this field. The first author of this debate is the school of free market. This school, agricultural prices should reflect their opportunity costs at the border, regardless of the international market processes and price levels. This pricing strategy ensure maximum efficiency of resource allocation and minimum rent-seeking activity. The paradigm of border prices is the intellectual foundation of this approach. The defender on the other hand, the approach of structuralism, argues the paradigm of border price is wrong, at least for the determination of domestic food prices basic, since they have an important role in the Macro-economy and welfare of consumers. Elasticities of supply and demand for these products is very low, then the complaint triangular losses due to domestic prices do not equal the marginal cost is negligible. They argue that the marginal price is strongly influenced by large distortions in agricultural policies in the developed world and a poor indicator of the resources should be allocated in the long term.
"Consequently, prices should be established to promote the goals of income distribution on macroeconomic stability. "The third approach, the emergence" Stabilization of the school " competition "By tracking the movements of short-term price in international markets of the economy suffers a significant loss of efficiency, but the economy also leads to loss of efficiency by not following the long-term trends in international opportunity costs (what the market processes that determine). efficiency optimum therefore requires a degree of market intervention to stabilize prices in the short term, but should be sufficient flexibility to allow domestic prices to reflect changes in international prices. Rent seeking behavior is to limit or eliminate the use of competitive market players to complete most activities following phenomena private sector marketing, but within the price band set by the government. "
6. Food security: the role private sector
In developing countries, one of the factors that determine the legitimacy and survival a government is its ability to ensure food security of its citizens. Governments are engaged in a variety of forms, instability in production and resulting food insecurity. Governments should respond to concerns elections and the activities of pressure groups from a diverse set of stakeholders such as farmers, consumers, industry and above all, the rent-seekers. Therefore, in almost all countries, the government assumes a major responsibility to address the problems of instability in the production and supply of food security. However, Smith (1997) argues that while there are several reasons for government intervention to mitigate the effects of volatile production, many forms chosen in the past have been ineffective or costly ways to achieve this goal. He concludes that
"The private sector has enabled the free world trade prices with a little tweaking samples at the borders, can provide all Food security and stability that is necessary "
5. Function private sector in Bangladesh
Dorosh (1999a) demonstrated the theory and showed that imports of rice from the private sector have contributed to stabilize the market supply of rice consumers benefit and save the Government of Bangladesh, the cost of acquisition and distribution of imported rice. Needless to say, that helps the government to avoid a mini food crisis, and introduces a new dimension to the concept of food security in Bangladesh. Later Dorosh (1999b) found that the Trade liberalization has played a major role in the success of the private sector and concludes that "trade liberalization can improve food security national. By providing an automatic mechanism to increase domestic supply and stabilize prices, trade liberalization has helped Bangladesh to ensure availability of foodgrains and stabilize prices. "Although most of the food security can not be a primary objective of trade liberalization experience Bangladesh shows that the two, in fact, can be compatible.
8. Food Security: global strategies
The two extreme solutions for strategically supply may be:
sufficiency – Sufficiency
Implementation of the pure theory of comparative advantage
But Janvry (1987) considered both as unacceptable. Because In the first, the cost is too high, while in the second, the risks are too great and has negative effects on some groups that have very low incomes. Janvry finally concludes: "Most countries have been trying to formulate food security strategies that balance these two extremes. The main problem is, however, to formulate a national strategy optimal, but a strategy to ensure food security for all population groups "
Maxwell (1996b), based on the work of the World Bank (1988), Drèze and Sen (1989) and Maxwell (1992), provides a list of the consensus strategy for food security in Africa. Although Africa is notoriously prone to internal strife and civil war, chronic hunger, driven in large measure, the strategies, the exception of the events, two or three, are universally relevant.
One of the main suppliers on vulnerable people and households with secure access to food, the individual and household needs have priority over matters of national food self-sufficiency or autonomy.
The importance of poverty reduction to growth economic, urban and rural poor need to ensure sustainable livelihoods, with adequate income and reasonable buffer against poverty.
A balance between food and cash crops is likely to be the best route for food security, in accordance with the principle of comparative advantage in the long term rather than self-sufficiency itself.
Lastly, planning for food security should follow a process "in place as" blue print approach, with large-scale decentralization, a bias for action in planning, promoting risk taking and innovation, and promoting the role of crops task is multidisciplinary and multisectoral planning teams.
9. food preservation and policy change
In identification of the dynamics and politics of policy change "in the food sector Bangladesh, Chowdhury and Haggblade (1997) indicate that political reforms in the power sector is a long process and more political. They also identify the "two fundamental changes opened the way to a significant reduction in food aid programs in Bangladesh government ": First, high productivity has led to the production of grains and other foods, and equally important, is the disabling of the major groups of potential opposition. The first is to integrate food security policy sustainable agricultural development. The second, of course, has political connotations and requires a very careful and delicate maneuver in relation regarding the "alliance extraordinary – millers, rent seekers with food DG, and idealists who really distrust of private markets.
Given this it above, it is evident that through the integration of food security to sustainable development of agricultural policy, after Streeten (1987), described the dilemma "fundamental" food policy. Food prices high enough to encourage agricultural production as it is universally accepted that farmers are "sensitive prices "is clearly in contrast to the issue of food prices low enough to protect poor food buyers. Pinstrup-Anderson (1987) makes emphasize the obvious reality that policies aimed at strengthening incentives to increase food production through food prices can lead to lower revenues and serious difficulties for the poor. As noted above, private sector development: the creation of markets and processing life are the basic criteria for a complete change is possible to promote the standard of living of the people almost.
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