The Portuguese Road to Neoliberalism (1976–1989)

The Portuguese constitution, passed in April 1976, considered the nationalisations undertaken after the Carnation Revolution to be ‘irreversible’, prescribing a development model based on state planning. Changes made to the constitutional text, in 1989, allowed for a privatisation programme that curtailed government intervention and reinforced market provision. This mirrored a previous shift in the public sphere. Whereas political debate in 1976 was mostly centred on state-led development models, the next decade witnessed the rise of a pro-market approach. Two crises of the balance of payments encouraged a growing number of economists, businessmen, journalists and politicians to argue for the need to revise the constitution, enhancing the role and scope of markets. This article focuses on the rise of a neoliberal intellectual field in Portugal between 1976 and 1989, analysing its efforts to overcome the legacy of the Carnation Revolution and build a competitive market order in a semiperipheral context.

Public sector reform in emerging economies: Does privatisation matter?

BACKGROUND: Privatisation policies have aroused enormous interest in both developed and developing countries. Previous research findings reveal that privately owned companies are more efficient and profitable than comparable state owned enterprises (SOEs). Moreover, it has been argued that these reforms would be even more effective if accompanied by privatisation. As a result, privatisation that aims to enhance the performance of SOEs has been regarded as one of the key features of emerging economies. OBJECTIVE: The purpose of this study is to examine the extent to which the benefits of privatisation have been achieved in emerging economies. In particular, the study assesses the developmental changes and improvements in the performance of privatised companies in Egypt as an emerging economy. METHODS: This study was carried out in three stages. First, it was felt necessary to obtain a broad overview of the effect of the Egyptian privatisation programme on the performance of the privatised companies by analyzing secondary data of privatized companies. Second, in an attempt to obtain a more precise understanding of the impact of privatisation, an online questionnaire survey was distributed to the finance managers of 56 privatised companies during the period September 2020 to January 2021. Third, a series of semi-structured interviews were undertaken with senior managers in 8 different privatised companies. The purpose of these interviews was to supplement and amplify the themes and issues that had arisen from stages I and II of the research. RESULTS: The findings reveal that privatisation improved the process of accountability within the company and efficiency gains is the most important advantage of privatisation. CONCLUSIONS: The study concludes that privatisation leads to more difficulty in safeguarding the interests of the weaker groups in society.

Restructuring Privatisation Programmes in the Gulf Cooperation Council: Lessons from the Kuwait Stock Exchange

Amid the eruption of a fiscal crisis from declining oil prices and the rise of economic diversification initiatives to foster private-sector development, members of the Gulf Cooperation Council (GCC) have increasingly recognised the importance of privatisation as a reform measure for underperforming state-owned entities. This article reviews the surrounding objectives of privatisation and presents an optimal privatisation programme structure for GCC policymakers that caters to the requirements of the modern day. Lessons learnt from privatisations of developed countries may not be directly applicable; thus, the recent success case in the region embodied by the Kuwait Stock Exchange privatisation is incorporated to settle upon a recommended privatisation programme structure relevant to the GCC. Though the fiscal crisis for the GCC is only beginning, rushing towards privatisation without careful planning of the programme is inexcusable.

Angolan privatisation will test Lourenco reform agenda

Significance Lourenco’s government launched in August its flagship Privatisation Programme (PROPRIV), with 195 companies and assets set to be either fully or partially sold. With a legal framework in place promising ostensible transparency, the process is officially set to take four years. Impacts UNITEL's proposed privatisation will likely create new conflict between the Dos Santos family and Lourenco after a period of accommodation. Ruling MPLA bureaucrats will strongly resist the (part-)privatisation of former cash cows, such as national carrier TAAG. Corruption in Sonangol’s external operations may have lessened under Lourenco, but political interference remains rife in its subsidiaries. The US authorities may pressure Luanda to use revenues from PROPRIV to settle outstanding debts to US firms. The government will look to the diamond sector to boost non-oil revenues, after recent institutional changes and a new tender process.

Greece’s political and economic prospects are fragile

Significance Thus ends eight years of economic policy oversight by the ECB, European Stability Mechanism and IMF, in exchange for some 275 billion euros (315 billion dollars) in soft loans. To obtain authorisation for the final disbursement, the government had to agree to what amounted to an unofficial fourth package of reforms without further financial assistance. Impacts Markets will demand a premium to purchase Greek sovereign debt until economic policy crystallises and the political situation clarifies. An increase in the minimum wage and the restoration of collective bargaining could revive private consumption. Private investment will depend on the availability of foreign direct investment for the privatisation programme.

Brazil's privatisations will suffer electoral setbacks

Subject The government's privatisation programme. Significance The programme of privatisations and concessions figures high on President Michel Temer’s reform agenda. A total of 145 projects have been proposed since 2016 in a wide range of sectors, including energy and other infrastructure at central, state and municipal government levels. Better services and market efficiency are among the government’s arguments for the programme, although it may contribute primarily to alleviating fiscal budget constraints and attracting foreign investors. Impacts Public infrastructure services will remain high on Brazil’s privatisation agenda. Political turbulence and the proximity of next year’s elections may delay planned privatisations and concessions. The use of public assets as a source of political bargaining may prove harmful to the country’s economic recovery.

Market conditions will delay Russian sell-offs

Subject Russia's delayed privatisation programme. Significance A privatisation programme seen as the partial solution to Russia's budget problems has been slow to take off, despite the prominent companies listed for sale. The only success to date is the partial sale of diamond miner Alrosa in July. Oil major Rosneft is hoping to acquire the smaller Bashneft, but may be prevented from doing so as it is state-controlled itself. Rosneft itself is due to undergo partial privatisation. Impacts The shortfall in privatisation proceeds will complicate efforts to curb the 2016 budget deficit. Investors will mostly be granted minority stakes, limiting their say in transparency and corporate governance. The subdued stock market environment and limited Western bidding creates opportunities for Asian investors.

Implementing IFRSs in the UK devolved administrations

Purpose – Utilising concepts drawn from the governmentality literature, the purpose of this paper is to examine the adoption of International Financial Reporting Standards (IFRSs) in the UK’s devolved administrations of Northern Ireland, Scotland and Wales in order to assess why they were adopted and how their introduction has been governed. Design/methodology/approach – This research applies a combination of three different approaches, namely: a content analysis; an anonymous online questionnaire; and semi-structured interviews. Findings – These include: the transition has had minimal impact upon policy setting and the information produced to aid budgeting and decision making; IFRSs are not entirely appropriate for the public sector; the time, cost and effort involved outweighed the benefits; public sector accounting has become overly-complicated; and the transition is not perceived as part of a wider privatisation programme. Research limitations/implications – As this study focuses upon the three UK devolved administrations, the findings may not be applicable in a wider setting. Practical/implications – Public sector change must be adequately resourced, carefully planned, with appropriate systems, trained staff and interdisciplinary project teams; accounting change should be based on value for money; and a single, coherent financial regime for the way in which government uses budgets, presents estimates to Parliament and publishes its resource accounts should be implemented. Originality/value – This study highlights that accounting change is not just a technical issue and, while it can facilitate a more business-like environment and enhance accountability, all those affected by the changes may not have the requisite skills to fully utilise the (new) information available.

New Kazakhstan privatisations will interest investors

Subject Potentially interesting IPOs in Kazakhstan. Significance On November 24, Kazakhstani Deputy Foreign Minister Alexey Volkov said that a new round of large-scale privatisations would help stimulate the development of the private sector. Given that the price of oil is likely to stay low for some time, optimisation of public spending is a key priority for Astana. The government's planned exit from state-owned enterprises should also bolster the latter's management and profitability. Impacts The privatisation programme may enable the government to refocus efforts on economic recovery. Corruption will remain a principal obstacle to the successful implementation of privatisation plans. Proximity to political influencers will be a valuable asset for foreign investors keen to partake in the privatisation drive.