Re: privatization in the third world (was NEWS: Genoa riots)

From: Carlos Gonzalia (
Date: Sun Jul 22 2001 - 14:22:36 MDT

>This kind of thing has come up in several recent "privatizing" countries,
>OTTOMH, Russia, Peru, and Argentina. Something is wrong, or incomplete,
>about the privatization procedure. Corruption requires discretionary power
>on the part of the government; no power, no corruption.
>Privatization should reduce corruption, by reducing what's there to corrupt;
>the fact that it doesn't indicates the IMF isn't privatizing the right things.

Corruption in the privatized companies, now in the hands of private capitals,
has certainly been reduced a lot. The privatization process itself was
what gave the Menem administration a golden opportunity to get huge bribes,
benefit their friends with monopolistic contracts, and divert a good share
of the funds obtained by the privatizations to their own pockets (or to
political election-year-projects, wasting tons of money in ensuring their
re-election to office). IMHO, the IMF's mistake was their incredible
naivete in thinking these guys would carry on a clean and sensible
transfer process. On top of the utterly tainted nature of the process,
you have to add also the incompetence with which some of the contracts
were granted, as witnessed by the banruptcy, closure and/or dismantling
of some of the companies sold.


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