Reasons for Privatization Through privatization, budgets can be reduced and more efficient services can be provided. Goods and services can be more competitive and innovative. Experience indicates that private enterprises outperform state-run companies. Privatization attracts foreign investment capital. Governments can use proceeds from privatization to help fund other pressing domestic needs.

Privatization Opportunities for International Firms Existing firms can be acquired at low cost, often with governmental support through tax exemptions, investment grants, special depreciation allowances, and low-interest credits. Since wages are low in countries where privatization takes place, there is more opportunity to build low-cost manufacturing and sourcing bases. The international firm can act as a catalyst by accelerating the pace of transferring business skills and technology and by boosting trade prospects.

The Less-developed Markets The less developed markets in the world include countries in: Africa Asia Eastern Europe Latin America the Middle East The emergence of these markets presents a great opportunity for citizens and companies alike.