State Comercial Enterprises: To Privatize or Not To Privatize?

Why is it that in general public enterprises register losses while private ones normally earn profits?

Tuesday, May 14, 2013

An analysis of the issue by Rogelio Arce Barrantes in Prensalibre.cr summarizes the situation with the words of the popular [Spanish] saying "If its free, let's party."

Although Arce Barrantes focuses on Costa Rica, the situation can be extrapolated to other Central American countries, where there are state enterprises engaged in various business activities, whether in the production of goods or services.

"... Public institutions are the modus operandi of politicians, unions and use the mantra of being for the public good, something which we well know they are not. Although private companies look for maximum capital returns, they are run with better rules in order to become true emporiums, confident that the money will be amassed for its owners, it is also true that they create most of the jobs in Costa Rica and maintain the Central Government through taxes. "



More on this topic

Energy: Dumping in Nicaragua

February 2020

The private sector believes that Ortega's creation of new state-owned companies to exploit oil and import and market gas and fuel will generate dumping in the country.

On February 11, the Law creating the Nicaraguan Gas Company (Enigas), the Law creating the Nicaraguan Company for hydrocarbon storage and distribution facilities (Eniplanh), the Law creating the national company for the exploration and exploitation of hydrocarbons (ENIH) and the Law creating the Nicaraguan company for the import, transportation and commercialization of hydrocarbons (Enicom) were approved as a matter of national urgency.

NO State Intervention

October 2018

Arguing that the law of creation of the Nicaraguan Company of Imports and Exports attempts against free market, the business sector demands to abolish the proposal.

The Superior Council of Private Enterprise (Cosep) strongly opposes the approval of the Law that aims to create the Nicaraguan Company of Imports and Exports (Enimex), which would allow the State to conduct commercial transactions.

Advantages of Being a Productive State Official

October 2012

In the Costa Rican National Development Corporation, there are 130 expendable personnel whose salaries are greater than $2,300 a month.

An article in Nacion.com quotes Wlliam Barrantes, the chief executive of the National Production Council (CNP), who manages the National Liquor Factory (Fanal), and runs the Institutional Supply Program (IAP), which sells food to ministries such as Justice (prisons), Security (police) and the Social Security Department (hospitals).

"State Owned" Companies?

November 2011

Corporatism in Latin American state institutions, especially those dedicated to the production of goods or services, means that its officials are losing sight of the sole reason for their existence, which is to serve the interests of the country and its citizens.

In Costa Rica a public company has rejected a proposal for a fiber optic network project recognizing that "it serves the country, but is not good business for the company."

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