PRIVATIZATION is accelerating rapidly from Bangladesh to Borneo. Billions of dollars worth of projects are under review. ``Companies are making offers for new types of businesses once completely off-limits to the private sector,'' says Sean Randolph, director of the Pacific Basin Economic Council in San Francisco. ``Privatization is now a foundation for national economic policy'' in Asia. State-owned monopolies exist even among the more affluent nations of East Asia. Many are inefficient and perpetually drain treasuries.
Strides were made in privatization during the 1980s, but the movement is now in a new phase. ``The last few years were a learning curve,'' says Roger Leeds, corporate finance officer at the International Finance Corporation (IFC), an arm of the World Bank that is taking a key role in promoting privatization. ``We have a much better idea of how to separate reality from fantasy, to find out [whether] deals are even feasible.''
A whole range of proposals will be reviewed in the months ahead by foreign and domestic investors alike. For example, Malaysia is privatizing its shipping industry. Some rail lines are to be offered, while the publicly-owned telecommunications monopoly, with $1 billion in assets, has a five-year divestiture plan in progress.
In Singapore electronics, armaments, and aerospace are under review. Those industries are part of a state-run conglomerate that realized sales of over $285 million last year.
Indonesia - where public corporations hold $68 billion in assets - is finalizing programs in gasoline, mining, telecommunications, the plantation sector, and construction. Early successes were seen in financial institutions and in textiles. An estimated 80 percent of national output is still dominated by government firms. Garuda, the national airline, is being divested.
Pakistan is generally satisfied with the recent privatization of its airline, and water and power agencies are candidates for sales to private owners. The Philippines is considering sales of several large public enterprises in commodities, heavy industry, and the national air carrier - enterprises whose assets are $2.3 billion, with 49,000 on public payrolls. In addition, World Bank loans of $150 million are sought to assist with privatization of other monopolies holding $3 billion in assets. In this Southeast Asian country, debt-equity swaps are viewed as a mechanism for accelerating the process.
South Korea views the process ``as a way to further open up its economy to investment,'' according to John Bennet, until recently president of the Korea Economic Institute. ``Its stock market is opening up to foreign investment in 1991,'' he says, ``and pressures to use privatization as a means of attracting needed capital will grow.''
Sri Lanka favors privatization as a means of raising revenue and slashing burdens posed by continued maintenance of communications, the cement industry, and other sectors. Thailand's proposals include one for a private toll highway and a privately run port. India, slow to favor the concept, is reviewing proposals before taking them to overseas investors. Nippon Steel is one foreign business with plans to invest in the subcontinent's road system.
Attile Karaosmanoglu, World Bank vice president for the Asian region, says the bank is generally optimistic about privatization. It is ``a powerful tool'' for efficiency, he says, ``and one of many'' used to promote growth. He cautions, however, that private monopolies are not a substitute for public ones.
How sales would affect the flow of money across an economy is one issue explored by the IFC. There are no models for prospective projects. Many options exist, including stock ownership for workers. Evaluating a project's financial condition is difficult, since accounting procedures vary in different countries. To restructure an industry means an end to featherbedding, and privatization usually results in short-term unemployment.
``Because these enterprises are heavily in debt and inefficient,'' says Dr. Randolph, ``it's important that investors see if tangible value can be added to them. Only then can governments receive a good sales price.''