Global FDI declined by 39% to just over $1040bn, while direct investment into developing countries and transition economies fell by 35% and 39%, respectively, according to United Nations Conference on Trade and Development (Unctad) estimates. A modest recovery is expected this year, but a stronger rebound is not anticipated until 2011.
The impact of the crisis on privatisation proceeds was felt the most by the biggest privatising countries. In Turkey, one of the most active privatisers in recent years, revenues from privatisation in 2009 were $2.3bn, less than half of the $6.3bn recorded in 2008. The sharp decline was also reflected in FDI received by Turkey, which declined by an estimated 56% to $8bn in 2009, according to Unctad estimates.
The picture for privatisation revenues in 2010 appears to be mixed. Some countries, including Poland, Russia and other nations in eastern Europe, are boosting their privatisation programmes, aiming for stronger revenues to help them bridge fiscal deficits in the aftermath of the crisis.
Russia anticipates revenues of $2.4bn
in 2010 through the sale of its shares in 450 state-owned enterprises slated for privatisation, a target which is much higher than
in previous years. In Poland, where privatisation revenues were about 7bn zlotys ($2.35bn) in 2009, a new push this year to sell government stakes in public enterprises is aimed at boosting revenues further. Other countries, such as Ukraine, expect privatisation proceeds in the post-crisis period to
The new face of privatisation promises greater benefits for all – including a better distribution of risks and eventual turnover of operations to the country hosting the investment, along with the requisite
infrastructure and technological know-
how needed to sustain the investment.
Bangladesh aims to pass a new policy over the coming months on private-public partnerships (PPPs) to promote private investment for infrastructure development.
India reported that foreign equity participation in PPPs has been very small; only 22 of its 300 PPP projects have had equity participation by multinational enterprises.
Pakistan is proceeding with the privatisation of 23 state-owned enterprises, including the Pakistan Post Office Department, Faisalabad Electric Supply Company, Hyderabad Electric supply Company and Peshawar Electric Supply Company.
Vietnam is planning to privatise Petrolimex and VNSteel, but will retain stakes of at least 75% and 65%, respectively.
The Russian Federation is planning to divest at least 25% of Sovcomflot, the
country’s biggest shipping company.
Poland has sold 10% of KGHM, Europe’s second largest copper miner, for $720m.
Middle East and Africa
In Iran’s new privatisation plan for 2010, 55% of the companies slated for sale are
in the oil sector.
Tunisia is planning to privatise 12
companies this year.
Zambia has accepted four bids in the privatisation sale of a controlling stake in Zambia Telecommunications Co, in which the government will retain a 25% stake.
This privatisation news is provided by the FDI.net Privatisation Alert (www.fdi.net/privatizationalert). FDI.net is a web portal
from the Multilateral Investment Guarantee agency, a member of the World Bank Group, that offers free, on-demand country analysis
and information on issues related to foreign investment in 175 countries.