Privatization: A Blessing Or Curse?

For years, the global community has witnessed the rise of various corporate groups that have managed to influence the global community, even by influencing various government systems, especially those of the periphery nations. Since the late 20th century, many nations around the globe, even the United States, have seen the necessity of transferring the ownership of various government services and assets from the public sector (government-owned) to the private sector (corporate-owned).  This transfer of ownership is what people started calling “privatization” of government-owned assets and services.

In the United States alone, various public services once under the state or federal government have been privatized, including airport operations, vehicle maintenance, technological development, water and wastewater utilities, waste collection, and especially the production of national defense assets. Even in South Africa, there is a trend of significant growth in private security firms operating alongside government-owned police, highlighting the likely case of a near-future privatization of law enforcement. Mainly due to the fact that the South African police force has faced problems over the years with rising criminal activities becoming a burden for the underfunded local police, which has led to the local communities hiring private security firms for security purposes.

The purpose of privatization, according to experts, is often the idea that private corporations have the ability to improve services by increasing efficiency, and innovation, and reducing government spending, which is viable for many cash-strapped national governments around the globe. There are various methods for privatizing national assets, including selling shares of state-owned enterprises through an initial public offering (IPO), outright sale to a private corporation, or concession agreements where private companies operate a public service for a set period of time. For example, in the 1980s, state-owned British Airways was privatized, and even in the latest developments, state-owned airlines such as PIA are also being targeted for privatization where the national government aims to fast-track sales to the private sector. In recent years, several state-owned telecommunications companies have been put on sale by national governments around the globe in order to enhance services and reduce the burden on the national budget.

For many years, such developments have created mixed public reactions, with some supporting the initiative since they believe that it will help the government maintain its budget and utilize the finances for much more important matters. Yet there are some who have generated negative views against privatization over the years; to them, this initiative is allowing various corporate entities to influence government policies on both a local and national scale. The extensive privatization of government services will eventually lead to corporate entities effectively replacing the government. The matter related to privatization and its impact is overall complex and requires extensive research on its long-term effects. There are potential benefits and drawbacks to privatization, but strong government regulations and developing an extensive policy to contain private corporate entities at certain levels will help create a stable environment for the mass public. The problem eventually is the regulation of corporate entities; a strong regulation established by the government is necessary to control the quality of services and prices. The extensive privatization of healthcare facilities and the pharmaceutical sector in nations such as the United States has created a scenario where healthcare-related expenses are unaffordable for many without insurance. Even with insurance, there is still a significant amount that needs to be paid. As compared to the United States, health care in Canada is affordable, including prescription drugs made by pharmaceutical companies, which are much cheaper in Canada compared to the United States. This is mainly because of strong government regulations and extensive work done in formulating an effective and viable policy related to the privatization of health care.