Privatization of Public Enterprises in Bangladesh

Privatization of Public Enterprises in Bangladesh:
Problems and Prospects
By Tanweer Akram*
*Academic Address:
Department of Economics
Columbia University
New York, NY 10027
United States of America
E-mail: [e-mail]
JEL: L33
Dated: October 7, 1999
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Privatization of Public Enterprises in Bangladesh:
Problems and Prospects
ABSTRACT
The performance of the public enterprise sector in Bangladesh is poor. The inefficiency of public enterprises places a fiscal burden, diverts limited resources from growth-enhancing public spending to unproductive subsidies, and affects the country’s industrial competitiveness. This paper identifies the prospects, problems, and pitfalls of privatization program and policies in Bangladesh. Firstly, the stylized facts about public enterprises are provided and the basic issues in privatization policy as it relates to Bangladesh are discussed.
Secondly, the preconditions for efficiency gains arising from privatization are evaluated.
Thirdly, the role of public enterprises in the labor market in Bangladesh is examined.
Finally, the political and the economic factors that can offset the potential efficiency gains from privatization in Bangladesh are critically analyzed. (JEL L33)
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Privatization of Public Enterprises in Bangladesh:
Problems and Prospects
1. INTRODUCTION
This paper examines the scope for gains from the privatization of public enterprises in Bangladesh. The paper discusses the main economic issues related to privatization of public enterprises. Bangladesh’s privatization programs and policies are placed in the context of its political economy.
2. PUBLIC ENTERPRISES IN BANGLADESH: SOME FACTS & HISTORY
Public enterprise activity is around 6 percent of the Gross Domestic Product (GDP) and their fixed assets represent 25 percent of Gross

References: Mahmood, Syed Akhtar. “The Performance of Selected Public Sector Industries in Bangladesh: 1972-1985,” unpublished D.Phil., thesis, University of Oxford, 1989. London: Public Policy Center, 1985. Cambridge, Massachusetts: MIT Press, 1988.