Posts Tagged ‘privatisation’

The rise of state capitalism! A sustainable (new) business model or not?

January 22, 2012

The spread of a new sort of business in the emerging world will cause increasing problems

With the West in a funk and emerging markets flourishing, the Chinese no longer see state-directed firms as a way-station on the road to liberal capitalism; rather, they see it as a sustainable model. They think they have redesigned capitalism to make it work better, and a growing number of emerging-world leaders agree with them. The Brazilian government, which embraced privatisation in the 1990s, is now interfering with the likes of Vale and Petrobras, and compelling smaller companies to merge to form national champions. South Africa is also flirting with the model.

This development raises two questions. How successful is the model? And what are its consequences—both in, and beyond, emerging markets? Read more ..

The New Zealand Government is heading in the opposite direction

A key platform for the New Zealand Government leading into the general election of 2011 was to follow a systematic program of selling down it’s interests in State Owned Assets (SOE’s) like Mighty river Power and Meridian Energy as a starter. Noting that these assets have performed solidly when measured against the simplistic western and capitalist measures like ROA, ROE, ROI etc.. Given the direction of the emerging country giants like China and other pacific neighbor countries, lets watch this space as New Zealand and emerging country giants follow different paths and assess just which model is the more sustainable.

What do you think?

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