A sharp drop in initial public offerings of state-owned enterprises accounted for a significant part of the decline.
The decline was attributed primarily to the financial crisis, as well as political difficulties facing many developing countries. However, early signs for 2009 indicate a resumption of privatisation activity as global economic conditions improve and stock markets rebound.
Increases in government expenditure to boost growth in response to the financial crisis and the recession have also led to widening budget deficits in many developing countries, which have created more pressure to step up privatisation activity.
East Asia experienced the largest decline in the value of privatisations (85%), owing to a sharp drop in initial public offerings. Latin America was in second place with a decline of 77%, recording fewer privatisation opportunities and smaller transactions.
Europe and central Asia was in third place, with a decline of 60%, despite increases in the value of privatisation transactions for Turkey.
South Asia was the only region with an increase in the value of privatisations, owing to a stepping-up of transactions in India.
The biggest privatisers in terms of value among all developing countries were China, Russia and Turkey, which together accounted for about 85% of the total value of privatisation transactions in 2008. Among developing countries, Serbia accounted for one-third of all privatisations in terms of number of transactions.
By sector, finance experienced a massive decline in privatisations, while significant declines were also experienced by transport, water and other infrastructure sectors. Telecom was the only infrastructure sector to experience a small increase in privatisation values. Values in both primary and services sectors declined, but privatisation values nearly doubled in manufacturing.
- Indonesia’s PT Garuda airline is planning to delay its initial public offering due to a technical problem with its debt restructuring programme.
- Pakistan has privatised 167 state-owned enterprises since its inception in 1956, yielding $9bn in proceeds for the government.
- Belarus is planning to establish a new national investment and privatisation agency.
- Bulgaria has merged the Agency for Post-Privatisation Control with its Privatisation Agency.
- Hungary’s Ministry of Finance has announced the renationalisation of the airline Malev, because its privatisation has not been judged successful.
- Poland is intensifying its efforts to privatise more than 300 state-owned enterprises by the end of 2011.
- Turkey has issued various privatisation tenders in the energy and electricity sectors.
- Ukraine has slated several state-owned enterprises for sale.
Middle East and Africa
- Nigeria is set to privatise three of the Power Holding Company of Nigeria successor companies by the end of 2010.