Privatization by Capitalization : The Case of Bolivia - A Popular Participation Recipe for Cash-Starved SOEs
While campaigning for the 1993 presidential election, Gonzalo Sanchez de Lozada proposed the unique Bolivian model of capitalization -- "Plan de Todos" (Plan for everyone)--for six large state enterprises in key sectors. The enterprises w...
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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/1994/11/697899/privatization-capitalization-case-bolivia-popular-participation-recipe-cash-starved-soes http://hdl.handle.net/10986/11679 |
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okr-10986-116792021-04-23T14:02:56Z Privatization by Capitalization : The Case of Bolivia - A Popular Participation Recipe for Cash-Starved SOEs Ewing, Andrew Goldmark, Susan DENATIONALIZATION GOVERNMENT OWNERSHIP TENDERS STOCKS PENSION FUNDS MINING ELECTRICITY PETROLEUM NATURAL GAS RAILWAYS AIR TRANSPORT CAPITALIZATION TELECOMMUNICATIONS STRATEGIC INVESTORS BALANCE SHEET BOARDS OF DIRECTORS BUREAUCRACY CAPITAL INVESTMENTS CAPITALIZATION CITIZENS CORRUPTION DEBT IMPERIALISM INVESTMENT BANKERS LAWS LEGAL FRAMEWORK LEGAL ISSUES LEGISLATION LITERACY LOCAL TELEPHONE SERVICES MARKET VALUE MINES NET WORTH OIL OIL SECTOR POTENTIAL INVESTORS PRESIDENCY PRIVATIZATION REGULATORY AGENCY REGULATORY POWERS REORGANIZATION REPRESENTATIVES RETIREMENT STATE ENTERPRISES STREAMS TAX SYSTEMS TECHNICAL ASSISTANCE TELECOMMUNICATIONS TRANSPORT VOTER REGISTRATION VOTING WORKING CAPITAL While campaigning for the 1993 presidential election, Gonzalo Sanchez de Lozada proposed the unique Bolivian model of capitalization -- "Plan de Todos" (Plan for everyone)--for six large state enterprises in key sectors. The enterprises would be offered for sale by international tender. The successful bidder would pay the agreed price not to the government, but into the company itself. The cash would be used for investment in the sector. Initially the investor and the government would hold equal, 50 percent stakes in the new company. The government would immediately give its share in equal parts to all adult Bolivians by endowing "pension accounts" set up for each adult citizen. A 50 percent stake in a company is usually enough to ensure management control. However, to avoid any uncertainty and the risk of a negative impact on the selling price, the capitalization law proposes that a management contract be given to the strategic investor for a fixed period of time. After that time, the investors would be able to buy shares in open markets to increase the shareholding beyond 50 percent. Sanchez de Lozada won the election in July 1993. With the help of World Bank advisors, he has been working to make this capitalization concept a reality. However, it has run into many of the thorny issues associated with traditional privatization schemes. This Note describes the key capitalization issues during the process. 2012-08-13T15:42:35Z 2012-08-13T15:42:35Z 1994-11 http://documents.worldbank.org/curated/en/1994/11/697899/privatization-capitalization-case-bolivia-popular-participation-recipe-cash-starved-soes Viewpoint. -- FPD Note no. 31 (November1994) http://hdl.handle.net/10986/11679 English Viewpoint CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Viewpoint Publications & Research Latin America & Caribbean Bolivia |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
DENATIONALIZATION GOVERNMENT OWNERSHIP TENDERS STOCKS PENSION FUNDS MINING ELECTRICITY PETROLEUM NATURAL GAS RAILWAYS AIR TRANSPORT CAPITALIZATION TELECOMMUNICATIONS STRATEGIC INVESTORS BALANCE SHEET BOARDS OF DIRECTORS BUREAUCRACY CAPITAL INVESTMENTS CAPITALIZATION CITIZENS CORRUPTION DEBT IMPERIALISM INVESTMENT BANKERS LAWS LEGAL FRAMEWORK LEGAL ISSUES LEGISLATION LITERACY LOCAL TELEPHONE SERVICES MARKET VALUE MINES NET WORTH OIL OIL SECTOR POTENTIAL INVESTORS PRESIDENCY PRIVATIZATION REGULATORY AGENCY REGULATORY POWERS REORGANIZATION REPRESENTATIVES RETIREMENT STATE ENTERPRISES STREAMS TAX SYSTEMS TECHNICAL ASSISTANCE TELECOMMUNICATIONS TRANSPORT VOTER REGISTRATION VOTING WORKING CAPITAL |
| spellingShingle |
DENATIONALIZATION GOVERNMENT OWNERSHIP TENDERS STOCKS PENSION FUNDS MINING ELECTRICITY PETROLEUM NATURAL GAS RAILWAYS AIR TRANSPORT CAPITALIZATION TELECOMMUNICATIONS STRATEGIC INVESTORS BALANCE SHEET BOARDS OF DIRECTORS BUREAUCRACY CAPITAL INVESTMENTS CAPITALIZATION CITIZENS CORRUPTION DEBT IMPERIALISM INVESTMENT BANKERS LAWS LEGAL FRAMEWORK LEGAL ISSUES LEGISLATION LITERACY LOCAL TELEPHONE SERVICES MARKET VALUE MINES NET WORTH OIL OIL SECTOR POTENTIAL INVESTORS PRESIDENCY PRIVATIZATION REGULATORY AGENCY REGULATORY POWERS REORGANIZATION REPRESENTATIVES RETIREMENT STATE ENTERPRISES STREAMS TAX SYSTEMS TECHNICAL ASSISTANCE TELECOMMUNICATIONS TRANSPORT VOTER REGISTRATION VOTING WORKING CAPITAL Ewing, Andrew Goldmark, Susan Privatization by Capitalization : The Case of Bolivia - A Popular Participation Recipe for Cash-Starved SOEs |
| geographic_facet |
Latin America & Caribbean Bolivia |
| relation |
Viewpoint |
| description |
While campaigning for the 1993
presidential election, Gonzalo Sanchez de Lozada proposed
the unique Bolivian model of capitalization -- "Plan de
Todos" (Plan for everyone)--for six large state
enterprises in key sectors. The enterprises would be offered
for sale by international tender. The successful bidder
would pay the agreed price not to the government, but into
the company itself. The cash would be used for investment in
the sector. Initially the investor and the government would
hold equal, 50 percent stakes in the new company. The
government would immediately give its share in equal parts
to all adult Bolivians by endowing "pension
accounts" set up for each adult citizen. A 50 percent
stake in a company is usually enough to ensure management
control. However, to avoid any uncertainty and the risk of a
negative impact on the selling price, the capitalization law
proposes that a management contract be given to the
strategic investor for a fixed period of time. After that
time, the investors would be able to buy shares in open
markets to increase the shareholding beyond 50 percent.
Sanchez de Lozada won the election in July 1993. With the
help of World Bank advisors, he has been working to make
this capitalization concept a reality. However, it has run
into many of the thorny issues associated with traditional
privatization schemes. This Note describes the key
capitalization issues during the process. |
| format |
Publications & Research :: Viewpoint |
| author |
Ewing, Andrew Goldmark, Susan |
| author_facet |
Ewing, Andrew Goldmark, Susan |
| author_sort |
Ewing, Andrew |
| title |
Privatization by Capitalization : The Case of Bolivia - A Popular Participation Recipe for Cash-Starved SOEs |
| title_short |
Privatization by Capitalization : The Case of Bolivia - A Popular Participation Recipe for Cash-Starved SOEs |
| title_full |
Privatization by Capitalization : The Case of Bolivia - A Popular Participation Recipe for Cash-Starved SOEs |
| title_fullStr |
Privatization by Capitalization : The Case of Bolivia - A Popular Participation Recipe for Cash-Starved SOEs |
| title_full_unstemmed |
Privatization by Capitalization : The Case of Bolivia - A Popular Participation Recipe for Cash-Starved SOEs |
| title_sort |
privatization by capitalization : the case of bolivia - a popular participation recipe for cash-starved soes |
| publisher |
World Bank, Washington, DC |
| publishDate |
2012 |
| url |
http://documents.worldbank.org/curated/en/1994/11/697899/privatization-capitalization-case-bolivia-popular-participation-recipe-cash-starved-soes http://hdl.handle.net/10986/11679 |
| _version_ |
1764417609669804032 |