South pacific business environment
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- Summary of alternative forms of privatization
- Privatization Planning and Policy Development Checklist
- PHASE 1 - PREPARING FOR PRIVATIZATION
- PHASE 4 - MONITORING AND EVALUATING PRIVATIZATION PROGRAM
Exercise No. 11Your group has been engaged to advise the Fiji government on the likelihood of the impact on globalisation on the economy. The government has asked you provide a comprehensive definition of globalisation and to give practical examples that illustrates what globalisation means. You have been engaged to develop and structure a table which identifies the impact of globalisation on varies sector of the economy. Prepare a table and present it to the class. Your team will be allocated 10 minutes to do your presentation. Exercise No. 12 Analysis of the Costs and Benefits of Alternative Types of Privatization Objective This exercise aims to assist participants gain a better understanding of the likely benefits and costs of alternative forms of privatization and the appropriateness of these forms to the privatization of different types of government activity Task Assume a government has announced its intention to privatize the twelve government organisations/services listed below. Your team is required to advise the government on the most appropriate form of privatization for these organizations. For each organization, list the form of privatization which is likely to be most appropriate. Specify the criteria that your group has adopted to evaluate the likely effectiveness of the alternative forms of privatization. Select three of these organizations and prepare a list of the likely benefits and costs of privatization. Listed below is a summary of the main forms of privatization and a checklist of types of benefits and costs. 1 A government owned tourist hotel with 100 rooms located on the beachfront. 2 A town bus service with 30-bus fleet which has a monopoly in the provision of bus services in a town with a population of 10,000. Assume it has a cost recovery rate of 80%. 3 A coconut processing plant that produces canned coconut milk for export. 4 The national airport authority. 5 A government radio station which transmits programs across the nation and provides services to the remote outer islands 6 A rural electricity system which provides power to persons in and villages. 7 A urban power supply system that has a monopoly in the provision of electricity to consumers 8 A government shipyard with dry dock facilities for the repair and maintenance of marine vessels and the construction of boats and small ships. 9 A government vehicle repair and maintenance workshop which provides services to government departments. 10 The road construction and maintenance section of the Public Works Department. 11 The government marine fleet which provides shipping services to government departments and inter-island passenger and cargo services to remote island communities. 12 A government plant pool of trucks, bulldozers, earth moving equipment and road construction equipment which provides plant for government construction and maintenance projects. Summary of alternative forms of privatization(1) Transfer of Ownership and Control from the Public to the Private Sector. (a) Complete Privatization involves transferring the ownership of a government enterprise to the private sector. (b) Partial Privatization involves transferring a portion of the ownership of a government enterprise to the private sector. control may or may not be retained by the Government depending on the percentage of the equity sold to the private sector. If the government retains more than 50% of the equity it will maintain control whereas if the private sector has a majority of the equity, control will pass over it. (c) Selective Privatization refers to the situation where the government sells or leases to the private sector separate parts of its operations or selected services while still retaining other services under government ownership and control. Distinct sections may be sold as complete entities. In some situations, two or more sections may be combined together to make a viable entity for the private purchaser. (2) Selling A Government Enterprise to the Workforce (3) Liberalization and Deregulation This involves introducing private sector competition into areas that were previously reserved for a government monopoly. This involves allowing private sector firms to compete with government enterprises in areas where the public sector has had a monopoly. (4) Contracting out the Service to the Private Firms and Non-Profit Organizations. This option involves the government granting a private firm an exclusive franchise or monopoly privilege to supply a particular service in a particular defined locality. (6) Grants and Vouchers (a) Grants. Under a grant system the government pays a private firm a sum of money to subsidise the cost of providing goods or services to selected consumer groups. For example, Government may subsidise private bus companies for providing transport services to school children. (b) Vouchers. Vouchers are an alternative means of subsidizing the price of goods and services to selected groups in the community. A voucher is a piece of paper given by government to consumers which entitles them to purchase goods or services from private sector producers at a subsidised rate or in some cases for free - in exchange for the voucher. The private firms then claim back from the government the value of the vouchers. Vouchers are simply a mechanism for targeting publicly funded subsidies to selected groups of consumers for the purchase of specified goods and services. Vouchers have a set money value and consumers have choice in the spending of the voucher in the market place. Exercise No 13 Privatization Planning and Policy Development ChecklistObjectiveThis exercise aims to stimulate discussion and debate on the processes involved in the implementation of a privatization project. Seminar members will be divided into groups and each group will be involved in the preparation of a planning framework and policy checklist for the privatization of public utilities and government business enterprises TaskThe group should first review the chart below which illustrates some possible phases in a planned approach to privatization. Taking the chart as a starting point, the group should select one of the following hypothetical government organizations and develop a systematic set of procedures for privatizing the organization as well as introducing competition into the market. The group will work together to develop a checklist of policy issues that need to be addressed in the planning stages of a privatization project for the type of organization selected. For this exercise select one of the organizations below and prepare a checklist that could assist the organization approach the privatization in a logically manner and minimize unexpected implementation problems. 1 A government owned tourist hotel with 100 rooms located on the beachfront. 2 A town bus service with 30 bus fleet which has a monopoly in the provision of bus services in a town with a population of 10,000. Assume it has a cost recovery rate of 80%. 3 A coconut processing plant that produces canned coconut milk for export. 4 The national airport authority. 5 A government radio station which transmits programs across the nation and provides services to the remote outer islands 6 A rural electricity system which provides power to persons in small rural towns and villages. 7 A urban power supply system that has a monopoly in the provision of electricity to consumers 8 A government shipyard with dry dock facilities for the repair and maintenance of marine vessels and the construction of boats and small ships. PRIVATIZATION IMPLEMENTATION CHART The complexity of privatization is illustrated below by considering the large number of activities and tasks to be undertaken in implementing a program of privatization of public authorities. The following chart illustrates some of the main steps that should be undertaken in a well-organised approach to privatization. It is divided into four phases. Phase 1 - Preparing for Privatization Phase 2 - Detailed Planning on selected Government State-Owned Enterprises and Activities Targeted for Privatization Phase 3 - Implementation Phase 4 - Monitoring and Evaluation The steps involved in these phases are outlined below: PHASE 1 - PREPARING FOR PRIVATIZATION(1) Develop and define Privatization Policy . clarify objectives . establish task force for preparation of guidelines, Strategies, programs and projects.
privatization . assess political support and limitations . identify areas of highest potential benefit . identify major constraints and the political implications . assess political costs/benefits of alternative privatization strategies . identify legal barriers . assess strength/weakness of coalitions (3) Create Private Sector Interest . announce privatization policy objective . education of public . consult with private sector associations, chamber of commerce to develop interest program
PHASE 2 - DETAILED PLANNING ON SELECTED GOVERNMENT STATE-OWNED ENTERPRISES AND ACTIVITIES TARGETED FOR PRIVATIZATION (5) Enterprise Diagnostic Analysis . review of management and operating systems . corporate financial analysis of capital structure and past financial performance . physical condition and value of assets . review human resource management system . identify strengths/weaknesses/opportunities/threats . review future market demand situation and competitive environment . identify any comparative advantage of enterprise (6) Audit of Legal Obligations . ascertain legal rights of existing creditors, shareholders, and other third parties. . review any outstanding government loan guarantees mortgages, liens, loan agreements and provisions prohibiting the sale of assets . review commitments, contracts with employees, superannuation, pensions, allowances, commitments to contractors, suppliers, customers.
Enterprise . review need for legal restructuring
. new needs for licensing systems . Deregulation measures to increase level of competition (9) Financial Restructuring . undertake balance sheet restructuring . write-down of assets . alleviation of excessive debt liabilities . recapitalisation
. private sector employment opportunities . redeployment . employee participation in ownership (11) Determine Future Ownership Options . partial versus total privatization . review scope for commercialization prior to privatization to increase value of entity . review scope for management contract, leasing employee buy-out scheme . review options with respect to foreign ownership joint venture ownership PHASE 3 - IMPLEMENTATION (Privatization Transfer) (12) Undertake any necessary legal requirements for sale of enterprise, or shares, franchise agreement, management contracts, legislation enabling change of enterprise form, ownership, etc.
performed. (14) Issue conditions and undertake solicitation for transfer to the private sector. (15) Evaluate proposals against criteria and select successful bidder. (16) Negotiate with bidder and execute legal transfer. (17) Announce transfer arrangements and educate public on implications for consumers. (18) Implement industrial relations employee transfer or redundancy, early retirement agreement. PHASE 4 - MONITORING AND EVALUATING PRIVATIZATION PROGRAM(19) Refine monitoring and evaluation methodology and develop performance appraisal systems.
quality and of service provision before and after privatization.
sector indicator data. (22) Compare performance data against targets, standards, milestones and identify shortfall and possible corrective measures.
terms of efficiency and effectiveness as well as the degree to which consumer needs are met.
findings of monitoring and evaluation program. (25) Continue with any further privatization projects. Exercise No 14 Village/community/island BUSINESS PLAN Task: Assume that your team has been engages as business consultants to prepare an outline for a village/ community or island Business Plan for employment and income generating business activities and projects to achieve quality of life improvement in the village( village improvement projects). Select a village or community that you know and develop the framework for a business plan. Undertake a situation analysis, SWOT analysis and set business goals and objectives and develop business proposals to achieve the goals. You may adapt some features of the following structure for the plan. Business Plan Outline Executive Summary Situation Analysis: Where are we now?? Village/ community resources
Unutilized resources
Stakeholder Analysis Problem and solution analysis SWOT analysis Goals achievement matrix Resource assessment Land use plan Land use capability Desired Future Situation
Business Development Strategy
Exercise No. 15 Policy Analysis Skills Exercise Task: Develop a policy for small business development for a Pacific Island economy. Activities:
Elect a person to report on your policy development to the class. Exercise No.16 Task: Development of a Policy to Support Entrepreneurship and Small Business at the Village Level in Fiji. Activities:
Exercise No 17. Task: Develop a Policy for the Dairy Industry in Fiji Activities:
Exercise No. 18 Task: National Business Incubator Development. Background: Assume your group is an international business consultancy that has been employed by the Fiji Government to develop a national incubator policy and program for Fiji. Your task is to draw up a brief plan that illustrates the steps involved in establishing a national business incubator program. The following issues should be addressed:
Exercise No 19 Models of Business Development. The Crest chicken model and its potential for applications in other industries. The crest chicken has developed a model for the production of chickens by out growers. Individual farmers apply to the crest chicken to be a supplier. Crest chicken provides the technology and training. The farmers build a production facility on their land. Crest provides the day old chickens and the feed and other suppliers. The Development Bank provides the finance. Crest pays the Development Bank directly for the loan repayments and pays the remainder to the farmer. Task: 1. Your group is required to identify how the crest business model might be applied successfully to other business opportunities in Fiji.
examine their strengths and weaknesses.
Exercise No 20 Development of a Policy for the Tourism Backpacker Industry (Eco-tourism and village based tourism) Your group has been employed by the Fiji government to develop a new policy that will support and promote the development of backpacker tourism in Fiji. The government is particularly interested in policy measures that will promote the village based eco-tourism development. The government has identified $2 million per year as funds to support the policy. Given this budget constraint you are required to design a policy that will generate the most economic benefits to the tourism business in the rural areas. You are required to present your policy recommendations to the Cabinet (MBA Class) MBA 434: South Pacific Business Environment Directory: file -> view view -> Western Europe after wwii view -> Author study: paul fleischman view -> Qpa1 7ela study Guide view -> Arctic Oil/Gas Neg view -> November 1970 Approximately 150,000-500,000 deaths Bhola Cyclone Bangladesh view -> Grade Level: 6 Unit of Study: Caribbean glce view -> Citation: Duffield, Katy view -> Table of Contents Lesson # view -> Chinese Wind Energy Disad Download 132.69 Kb. Share with your friends:
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