difference between privatization in brazil and mexico

8/6/2019 Difference Between Privatization in Brazil and Mexico

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DIFFERENCE BETWEEN PRIVATIZATION IN

BRAZIL AND MEXICO

Presented by:Sarang Gaikwad

ESSCA BSP 2010


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CONTENTS

Brazil

Trade Liberalization

Components

Sector-wise privatization FDI Inflows

Mexico

Trade Liberalization

Components

Conclusion


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BRAZIL

Introduction

From the early 1990s through 2007, Brazils

privatizations realized USD 87.9 billion in sales

revenue and another USD 18.1 billion in debttransfer.

Foreign investment has played a significant role

in Brazils privatization programs.

Foreign investment accounted for about USD 42.0

billion, or 48 percent of the total.


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OBJECTIVES

To redefine states role from supplier to regulator

To create a competitive environment by granting

public service commissions.

To direct federal governments efforts andresources to

Health Education, housing, public security and

R & D


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COMPONENTS

The Brazilian privatization program has three

components:

(a) the federal National Program of Destatization

(NPD), which started in 1991;(b) similar programs at the state level, which began

in 1996; and

(c) the privatization program of the

telecommunications industry


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RESTRUCTURING THE STATES

Modernization of tax collection systems and

expenditure Controls

Downsizing of civil servant contingent

Privatization and public services concessions Agreement to a targeted fiscal revenue

Reduction or spreading out of states indebtedness


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SECTORS PRIVATIZED

Stage I:

Industry Steel

Petrochemicals

Fertilizers

Mining (CVRD - 1997)

Stage II:

Infrastructure Railroads

Telecommunications

The major privatization: Vale do Rio Doce(1997);EMBRAER(1994); Telebras(1998)

a


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SECTOR-WISE DISTRIBUTION OF AUCTIONS


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FDI AS % OF GDP


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MEXICO

Economic crisis of 1982 due to external debt

Had to leave behind domestic interest and tight

Foreign investment

Began with nationalization of bank

Securities investment boom an offspring of crisis

Mexico stood 4th in world in the amount of

revenues gained from sale of public enterprises


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PRIVATIZATION PROGRAM

Three points of Mexicos privatization program were:

(1) The withdrawal of the federal government from

production of goods and services;

(2) The effect of privatization on the federalgovernments financial affairs; and

(3) The speed at which privatization was carried out.


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SECTORS PRIVATIZED

Stage I

Banks

Airlines

Energy Telecommunications

Sugar

Stage II

Steel

Railway

a


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FDI INFLOWS


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CONCLUSION

The condition for the privatization were different

in both the countries

The long-term benefits of these privatization

endeavors have far outweighed any costs incurred Unable to attain full potential of privatization.

Latin American people view privatization of

industries as at least a partial failure.

Temporary reduction in employment levels--the

typical short-term cost of privatization--

aggravates citizens' negative feelings.


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difference between privatization in brazil and mexico

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