-By Neeraj Vajracharya

About two decades back, people of the developing countries used to say that privatization was a policy developed in the developed countries of the West and it is not appropriate for the developing countries. They said their country faces a unique set of insurmountable problems in implementing privatization and it is not possible to make progress.

Many developing countries, in the past, including the South Asian region accepted privatization as a strategy of compulsion rather than that of the choice for economies.

But, it seems that things are changing quite a lot. Today, almost all member countries of this region claim that privatization is bringing about a good result and success in their countries.

Now people in this region have started to believe that privatization not only prompts the government channel resource, but they also say that it could be the answer to a host of economic challenges.

Delivering his inaugural speech at the recently concluded South Asian Privatization Summit held here in Kathmandu from December 2-3, 1999, Minister for Finance Mahesh Acharya, said that private sector-led development strategy had elevated many of the economies from the phase of under-development to a position of sustained prosperity.

“However, the control-oriented economic and political regimes have suffered from dangerous spectrum of economic backwardness, poverty, unemployment and indebtedness,” he  added.

Similarly, other participants at the Summit  expressed confidence that privatization can work in South Asia and bring very strong benefits to the economy. Some of the South Asian countries have also shown that even the most difficult economic problems can be overcome through privatization, they pointed out.

In Nepal, though there seems to be lots of difficulties to be sorted out, the government officials have said that the country’s privatization programme has been a reassuring success. “With majority of privatized enterprises performing better than they did under the government ownership, Nepal’s privatization programme has been a reassuring success,” says “Monitoring Privatized Enterprises”, a report issued on the eve of the Summit by Ministry of Finance.

“This report finally demolishes the frequent complaints that Nepal’s past privatizations have failed. In fact, they have been successes,” said a Ministry spokesman at a briefing in the Finance Ministry last week.

“Of the ten major enterprises privatized, nine have increased investment and in only one has investment decreased,” said Peter Young, International Director of London-based Adam Smith Institute which is working in a close association with the Privatization Cell of the Ministry.

Peter further added, “six have increased production, one remains about the same, and three have had reductions in production. Seven have increased sales and one has had little change. Five have shown profits.”

In Nepal, overall 16 former state-owned enterprises were privatized since the early 1990s. The report compiled by the Ministry concentrate on 10 major state-owned enterprises that have had time to establish a track record of success or failure, it is learned.

The Summit was organized jointly by Ministry of Finance and Adam Smith Institute and was participated in by almost 100 representatives from South Asian countries and organizations.