This is partly in response to consumer pressure for better services at a lower cost, but also in response to private companies, which are demanding a level playing field when competing with state-owned firms. As state-owned enterprises themselves venture abroad, governance, transparency and disclosure practices become especially important.

Aiming to promote good governance of state-owned enterprises, the Organisation for Economic Co-operation and Development (OECD) issued in 2005 the Guidelines on Corporate Governance of State-Owned Enterprises.

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The guidelines are a voluntary tool to help both industrialised and developing countries introduce appropriate governance reforms of state-owned enterprises. Among other things, the guidelines address the need for a legal and regulatory framework that ensures a level playing field with the private sector by limiting distortions; the need to establish a clear and consistent ownership policy; transparency and accountability in governance with high standards of accounting; and recognition of the rights of all shareholders.

OECD has also set up a Global Network on Privatisation and Corporate Governance of State-Owned Assets, comprising OECD member and non-member countries, which aims to promote dialogue and exchanges in support of improvements in the governance of state-owned enterprises and in support of governments seeking to privatise effectively state-owned assets. At its first meeting in March 2008, among other things, the Global Network discussed the role of state-owned enterprises in national economies and the importance of good governance for effective privatisation.

Americas

  • Brazil is expected to begin the process of privatising its airports next year, which would include the international airport in Rio de Janeiro.

 

Asia

  • The Philippines is proceeding with the divestment of its 40% stake in Petron Oil.

 

Europe

  • Croatia has announced the privatisation sale of a metal constructions and parts plant and a steel constructions plant.

 

  • Serbia has scheduled the privatisation sale of several state-owned enterprises via auctions over the next couple of months.

 

  • Turkey plans to sell most of the remaining state-owned electricity distribution grids by the end of 2009.

 

  • Kyrgyzstan is in the process of assessing bids received from the sale of its 78% stake in Kyrgyztelecom.

 

Middle East and Africa

  • A new law on privatisation has passed in Iran.
  • Nigeria is planning to bring in a new core investor in Nigerian Telecommunications Ltd and Mobile Telecommunications Ltd by February 2009, ahead of the initial planned timeframe. Under an agreement between the government and Transcorp, which currently owns 51% of both companies, the new core investor will acquire 29% of Transcorp’s shares and 22% of the government’s 49% stake. The government is also planning to initiate the privatisation of Petroleum Pipelines Marketing Company, which operates a network of gasoline distribution pipelines and depots across the country, before the end of this year.

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 direct investment in 175 countries.