Question

Why are developing countries interested in privatizing their state-owned industries? What opportunities does privatization have for MNCs? Discuss.

Answer 1

Developing countries are having a rapid development in their overall States. State-run industries are mostly corrupted and does not do their work according to the cost involved in operation of such organisations. This is the main reason why government is privatizing the industry. As private industry is more uniform and less prone to corruption then the government industries, privatisation of these Industries would definitely help better development of the society in a positive way. This type of approach is basically used in developing countries like India and other countries as well.
Higher level of corruption in the government sector as well as involvement of huge amount of Lost funds due to negligence of the Government employees have been the main criteria of switching Government companies to the private sector. As private sector has a better rule and regulation as well as working authority, use of funds is more adequate in these companies which directly increases the overall effectiveness of the department.

Multinational companies are mostly private phone and this type of approach definitely helps them to create better revenue from the same market as multinational companies which are private have a better structure for code of conduct. Proper structured approach increases the overall efficiency as well as productivity of multinational companies in international markets which benefit them to create more ethical working environment and to improve their overall market situation.