Why do developed countries insist that LDCs should privatise their state owned enterprises ?

Question

Yet control of these enterprises(SOEs) gives the state the power and authority to control their economies and cater or the walfare ots people thru monitoring what goes on? These SOEs are not profit motivated but if they do make profits they shared by the nationals. Uder privatisation its the individuals to benefit at the expense of the poor masses. What is the motive? Recolonisation? Advanced & disguised capitalism? Americanisatio&Europeanisation? or what????

Answer 1

The developed countries all have some form of market economy. This means that, for the most part, private individuals control the majority of the economy. It is a decentralization of power that, for all its faults, can only be achieved through individual private enterprise.

This preference for a market economuy is not an exercise in altruism. These developed countries want to see a return on their investment if they are going to put money into the LDCs. Public companies are rife with corruption, because governments are not productive enterprises, they are force-weilding institutions. They stifle competition through the use of force, either through tarriffs, taxes, subsidies, or regulation. This kills any incentive for production and allows the government to produce substandard goods without worrying that someone else will do it better and for less money.

More important, when you let the government control the means of production, then the government controls who gets the finished product, and there is nothing to stop them from making this determination for political reasons. For example, the Cuban government can limit (or eliminate)access to health care for anyone who does not toe the Communist party line. So a market economy is the only way to assure fair access to goods and services, and the best way to protect human rights.

Look at it this way: look at the governments that have relatively free markets. They have the best human rights records. They have the highest standards of living for their people. They do not fight wars against each other, because it is better to compete in the marketplace for both countries. In Thomas L. Friedman's 1999 book The Lexus and the Olive Tree the following theory was presented: "No two countries that both had McDonald's had fought a war against each other since each got its McDonald's". While that statement was somewhat tongue-in-cheek, his point was that due to globalization, countries that have made strong economic ties with one another have too much to lose to ever go to war with one another. You can quibble with the details of the claim, but the point is well taken.

So I disagree with your assumption: under a market economy, the individuals do not benefit "at the expense of the poor masses," but rather, to the benefit of the masses. That is why we insist on a return to a market economy: it is the only way to get the aid money to the hands of the people instead of just into the hands of the ruling elite.

Answer 2

I am afraid that your question is not very clear...at least for me.

From my own investigation and observations, the countries that do best are those that are least involved in business.

I don't agree that a government has a duty to control their economies. Governments do have duties and responsibilities, but that isn't one of them.

Private enterprise and the ability of business to operate unhindered generates economies where the vast majority of people live in very excellent conditions.

I know there are poor in there, but for the most part, free economies produce the highest standard of living for the most people.

It is overwhelmingly the very best way to allow the people the freedom to determine their own future economic stability.

That is my opinion about state owned enterprises. Why, right here in America, the state owns Social Security and look what a mess that it has become partly from the government looting from SS and partly from the very foundation upon which it is established.

No, I don't trust governments to do what is my responsibility to do.