| Margaret Thatcher started a world trend
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| | corporate governance and the proper
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| during her tenure as Prime Minister is
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| | conduct of business.Employees want to
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| Downing Street. It is called:
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| | maximize employment and the economic
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| Privatization. It consisted of the
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| | benefits attached to it - managers and
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| transfer of control of a state-owned
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| | shareholders wish to minimize this
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| enterprise to the Private Sector. This
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| | parameter and its effects on the
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| was done by selling the shares of the
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| | corporation. Managers wish to maximize
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| company. At times, the control itself was
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| | their compensation - employees and owners
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| maintained by the state - but the
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| | wish to minimize or moderate it, each
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| economic benefits emanating from the
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| | group for its own, disparate reasons.This
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| ownership of shares was partly sold to
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| | break in the "chain of command", this
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| privates. Such economic benefits are
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| | diffusive, fog like property of the newly
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| comprised of the dividend yield of the
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| | transformed entity lead to dysfunction,
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| shares plus the appreciation in their
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| | financial mismanagement, lack of clarity
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| value (due to the involvement of the
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| | of vision and of day to day operations,
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| private sector) known as capital
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| | labour unrest (when the unrealistic
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| gains.But the privatization process was
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| | expectations of the workforce are not
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| not entirely homogeneous, uniform,
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| | met).So, at the beginning, during the
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| transparent, or, for that matter,
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| | 1980s, the West preferred to privatize
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| fair.The stock of some of the enterprises
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| | state owned firms - rather than to
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| was sold to an individual, or group of
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| | transform them. A fast accumulating body
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| individuals, by a direct, negotiated
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| | of economic research demonstrated
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| sale. A "controlling stake" (nucleus) was
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| | unambiguously that privatization did
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| thus sold, ostensibly yielding to the
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| | miracles to the privatized firms. In
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| state a premium paid by the private
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| | certain cases, productivity shot up 6
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| investors for the control of the sold
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| | times. Between 60 to 80 percent of GNPs
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| firm.This method of privatization was
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| | in the West are private now and a
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| criticized as "crony capitalism". For
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| | vigorous trend to privatize what remains
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| some reason, a select group of
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| | of the public sector still persists.But
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| businessmen, all cronies of the ruling
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| | the same studies revealed a less pleasant
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| political elite, seemed to benefit the
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| | phenomenon: only a select group of
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| most. They bought the controlling stakes
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| | businessmen benefited from privatization.
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| at unrealistically low prices, said the
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| | The paranoid allusions of the critics of
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| critics. To support their thesis, they
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| | this process were completely
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| pointed to the huge disparity between the
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| | substantiated. Something was very
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| price at which the "cronies" bought the
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| | corrupted in implementation of the
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| shares - and the price at which they,
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| | seemingly wholesome idea of
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| later, sold it to the public through the
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| | privatization. The public - as a whole -
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| stock exchange. The "cronies" cried foul:
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| | economically suffered.This led to the
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| the difference in the prices was
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| | emergence of a new social consciousness.
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| precisely because of privatization,
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| | It was provoked by the unacceptable
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| better management and financial control.
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| | social costs of capitalism: more people
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| Maybe. But the recurrence of the same
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| | under the poverty line, homelessness, a
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| names in every major privatization deal
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| | radicalization in the inequity of the
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| still looked suspiciously odd.Then there
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| | distribution of income among different
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| was the second version: selling the
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| | strata of society. But this trend was
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| shares of the privatized firms directly
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| | enhanced by the apparent corruption of
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| to the public. This was done using either
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| | the privatization process.This new social
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| of two methods:An offering of the shares
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| | consciousness converged with yet another
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| in the stock exchange (a cash method),
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| | all important and all pervasive trend:
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| orThe distribution of vouchers
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| | the formation of small businesses by
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| universally, to all the adult citizens of
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| | small time entrepreneurs. The latter
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| the country, so that they could all share
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| | functioned both as owners and as
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| the wealth accumulated by the state in an
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| | employees in their firms. There were 16
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| equitable manner. The vouchers are
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| | million such owners-workers in the USA
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| convertible to baskets of shares in a
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| | alone (1995 figures). About 99% of the 22
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| prescribed list of state enterprises (a
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| | million registered businesses in the USA
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| nonchash method).But a smaller group of
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| | were small businesses. No economic
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| (smaller) countries selected a whole
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| | planner or politician could ignore these
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| different way of privatizing. They chose
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| | figures. Employee owned firms became the
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| to TRANSFORM the state-owned firm instead
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| | majority in the service and advanced
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| of subjecting them to outright
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| | technology sectors of the economy - the
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| privatization.Transformation - the venue
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| | fastest growing, most lucrative
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| adopted by Macedonia - is the transfer of
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| | sectors.In its own way, as a result of
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| the control of a firm and / or the
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| | these two trends, the West was moving
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| economic benefits accruing to its
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| | back to transformation and away from
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| shareholders to groups which were
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| | privatization, away from separation of
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| previously - or still are - connected to
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| | ownership and labour, away from
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| the firm.In this single respect,
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| | differentiation between capital and
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| transformation constitutes a major
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| | workforce. This is a major revolution.The
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| departure - not to say deviation - from
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| | OECD (the organization of the richer
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| classical privatization.Ownership of the
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| | countries in the world) established an
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| transformed firm can revert to either of
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| | institute which follows trends in the
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| the following groups, or to a combination
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| | poorer parts of the world, politely
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| thereof:The employees of the firm,
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| | called "Economies in Transition". This is
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| through a process called Employee BuyOut
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| | the CCET.According to the CCET's latest
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| (EBO)The management of the firm, in the
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| | report, privatization continues in an
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| form of a Management BuyOut or Buy In
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| | uneven pace throughout the former Eastern
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| (MBO / MBI)A select group from within the
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| | Bloc. Some countries nearly completed it.
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| firm. Such a group uses the assets -
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| | Others have claimed to have completed it
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| current and future - of the firm as
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| | - but haven't even started it in reality.
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| collaterals, thus enabling them to get
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| | Some countries - Macedonia amongst them -
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| the credits necessary to purchase the
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| | have sold the shares of state owned firms
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| shares of the firm. This is called a
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| | (=businesses with social capital) to
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| Leveraged BuyOut, because the assets of
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| | managers and workers - but the managers
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| the firm itself are leveraged in order to
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| | and workers have largely not paid for
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| purchase it (LBO).Finally, the creditors
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| | these shares yet. It is by no means
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| of the firm can team up and agree to
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| | certain that they will. If the managers
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| convert the firm's debts to them into
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| | and workers default on their obligations
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| equity in the firm, in a Debt to Equity
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| | to pay the state - the ownership of the
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| Swap (DES).Sometimes, the state continues
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| | company will revert back to the state.
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| to maintain an interest in privatized -
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| | This is paper privatization, a
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| as well as in transformed - firms. This
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| | transformation of expectations. No one
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| is especially true for natural
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| | can seriously claim that the
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| monopolies, utilities, infrastructure and
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| | transformation is completed before the
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| defence industries. All the above are
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| | new owners of the firms respect their
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| considered to be strategic matters of
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| | financial obligations to the state.In
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| national interest. Some countries -
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| | all, privatization the world over,
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| Russia and Israel, for ones - continue to
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| | proceeded more rapidly with small firms.
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| own a "Golden Share". This highly
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| | Selling the bigger firms was much more
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| specific type of security allows the
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| | difficult. Most of this behemoths were
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| state to exercise decision making powers,
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| | composed of numerous profit centres and
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| veto powers, or, at least, control over
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| | loss making business activities. A
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| business matters that it considers vital
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| | solidarity of accounts and guarantees
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| to its security, financial viability, or
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| | existed between the various operations.
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| even to its traditions. Israel's golden
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| | The more profitable parts of a company
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| share in the national air carrier, EI AI,
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| | supported and subsidized the less
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| allows it to prevent flights in and out
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| | competent, the losing parts. This was not
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| during the religiously holy day of
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| | very attractive to investors.The official
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| Sabbath!Until very recently the common
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| | figures are heart warming. In parentheses
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| (economic) wisdom in the West had it that
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| | - the percentage of firms
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| Transformation was - in the best case - a
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| | privatized:Albania , Czech Republic ,
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| sterile, make - believe exercise. The
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| | Estonia , Hungary , Lithuania, Poland and
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| worst case included cronyism and
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| | Slovakia all privatized 90% of their
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| corruption. One thing was to privatize
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| | small firms. In Russia and Latvia, the
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| and another was to privateer. But there
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| | figure is 70%.The picture is more clouded
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| were some grounds for some solid
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| | with the larger firms:Czech Republic
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| criticisms as well:(1) The main
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| | (81%), Hungary, Estonia (75%), Lithuania
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| ideological thrust behind privatization
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| | (57%), Russia (55%), Latvia and Slovakia
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| was the revitalization of stale and
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| | (46%), Mongolia (41%), Poland (32%),
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| degenerated state firm. Badly managed,
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| | Moldavia (27%), Romania (13%), Belarus
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| wrongly financially controlled, applying
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| | and Bulgaria (11%), Georgia (2%).But what
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| an incoherent admixture of business and
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| | hides behind the figures?The Czech
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| non business (political, social,
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| | Republic is infamous for its cronyism and
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| geopolitical) considerations to their
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| | for the massive transfer of wealth to the
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| decision making process - state firm were
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| | hands of a few people close to government
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| considered as anachronistic as dinosaurs.
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| | circles.On the face of it, the situation
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| Many preferred to see them as extinct as
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| | in Poland looks a bit better: a universal
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| those ancient reptiles. An injection of
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| | voucher system was instituted. People
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| private initiative acquired the status of
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| | were allowed to deposit their shares with
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| ideological panacea to the corporate
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| | 14 management funds. These funds also
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| malaise of the public sector.But this is
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| | bought some of the shares, making them
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| precisely what was missing in the
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| | part owners. They control now 500
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| Transformation version. It offered
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| | enterprises, which make up 5% of the
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| nothing new: no new management, no new
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| | country's GNP.Some of these funds are 50%
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| ideas (were likely to come from the same
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| | foreign owned, so their management and
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| old team) and, above all and as a direct
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| | moral standards are Western. But, even
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| result of this preference of old over new
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| | there, rumours abound and not only
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| - no new capital.To this, the supporters
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| | rumours.So, what is better -
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| of Transformation answer that the one
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| | privatization or transformation?Maybe the
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| thing which is new - personal
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| | lesson is that we are all human. There is
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| capitalistic incentives - far outweighs
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| | no method immune to human fallacies and
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| all the old elements. Incentive driven
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| | desires, to corruption or to allegations
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| initiative is likely to bring in its wake
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| | of it. Transformation tends to benefit
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| and to herald the transformation - in the
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| | more people - so, maybe it looks more
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| most complete and realistic sense - of
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| | just. But long term it is inefficient and
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| the state firm.Change, renovation and
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| | leads to the ruining of the firms
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| innovation - say the latter - are
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| | involved and to permanent damage both to
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| immediate by products of personal profit
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| | the economy and to the workers-owners. Is
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| motivation, the most powerful known to
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| | it better to be the owner of a bankrupt
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| Mankind.(2) The process of Transformation
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| | firm - or to work in a functioning firm,
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| blurred the distinction between labour,
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| | where you have no ownership stake? This
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| management and ownership. Employees acted
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| | is not an ideological or a philosophical
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| as potential managers and as co-owners in
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| | question. Ask the employees of the
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| the newly transformed companies. The very
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| | Pelagonija Construction
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| concept of hierarchy, clear chains of
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| | Group.Privatization, on the other hand,
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| authority (going down) and of
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| | is much more open to manipulation - but
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| responsibility (going up) - was violated.
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| | at least it secures the continued
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| A ship must have one captain lest it
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| | existence of the firms and the continuous
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| sinks. It is not in vain that the
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| | employment of the workers.Sometimes, in
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| management function was separated from
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| | economic reality, we have to give up
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| the ownership function. Employees,
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| | justice (or the appearance of it) - in
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| managers and owners, all have differing
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| | order to secure the very survival of the
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| views and differences of opinion
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| | workers involved.I, personally, prefer
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| concerning every possible aspect of
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| | privatization over transformation.
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