THE PRIVATIZATION OF STATE OWNED ENTERPRISES IN THE EARLY TRANSITION: NECESSITY, METHODS AND MECHANISMS

Abstract

Privatization assumes major objectives, such as to improve economic efficiency, competitiveness and strengthening private sector across the economy, considering that the return on capital invested in the public sector is about one third compared to that invested in the private sector. Efforts to support and modernize the private sector will increase the overall efficiency, will free up resources by reducing the financial burden of state aids directed to companies with losses, will allocate these funds for essential social objectives such as health and education. Privatization has the important task of eliminating political control on enterprises. In this paper we show that understanding the process of privatization of state owned enterprises requires in the beginning to clarify three key elements: the institutions involved, the preparation for privatization of state owned enterprises and restitution.