Finding Real Owners : Lessons from Estonia's Privatization Program
The Estonian government has quickly privatized more than 90 percent of its industrial and manufacturing enterprises. The Estonian privatization agency batches 30-40 firms and advertises them for sale. The prime goal is to find "real owners&quo...
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| Format: | Viewpoint |
| Language: | English |
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World Bank, Washington, DC
2012
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| Online Access: | http://documents.worldbank.org/curated/en/1996/01/696805/finding-real-owners-lessons-estonias-privatization-program http://hdl.handle.net/10986/11640 |
| Summary: | The Estonian government has quickly
privatized more than 90 percent of its industrial and
manufacturing enterprises. The Estonian privatization agency
batches 30-40 firms and advertises them for sale. The prime
goal is to find "real owners" capable of running a
durable, productive firm. Purchase offers are judged not
only on price, but also on the quality of business plans
submitted. In 17 sales, the Estonians have combined
strategic investment with voucher exchanges. An unresolved
problem is that the face value of the vouchers outstanding
far exceeds the likely value of assets being sold. This Note
concludes that Estonian privatization has been a success in
scope and pace. No private firm has yet failed, and the
privatization agency reports that most divested firms are
expanding their employment. However, these promising results
are tempered by the fact that the 70 privatized firms
experiencing problems with installment purchase payments are
only being admonished. But this problem, though significant,
is not overwhelming. |
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