Dealing with Resistance to Privatization

The specific objectives of the paper are: identifying the benefits associated with privatization based on numerous studies that have been conducted; identifying possible reasons for stakeholder resistance to privatization; identifying some of the mitigation measure that can be put in place to deal with resistance to privatizations; and proposing recommendations on how to mitigate possible resistance as the Privatization Commission implements the Privatization Programme. The paper has extensively reviewed literature on privatization most of which has been downloaded from the internet.

Recommendations from the paper include:

• Need for a communication strategy for the Privatization Programme through which stakeholder expectations for privatization can be managed.
• Need for enhanced stakeholder consultations during the design of the Privatization Programme and prior to and during the entire process of implementing privatization transactions.
• Inclusion of employee ownership schemes in the privatization proposals to offer interested employees an ownership in privatized enterprise.
• Publicizing major activities can enhance public acceptance.
• The proposed methods of privatization could as much as possible encourage broad based ownership to gain public and political support.
• There may be need to ensure that the Commission is underpinned by a strong law that empowers it to overcome opposition from vested interests – this may call for strict
• enforcement of the existing law or amendment. Such a law could accord the Commission administrative authority that requires entities to be privatized and government ministries to comply with its requirements.
• The Commission may consider developing a mechanism to monitor institutions post-privatization that will provide feedback on closed transactions – this will build stakeholder confidence and marshal support to ongoing privatizations.
• Government may be encouraged to plough back privatization proceeds into social infrastructure such as hospitals and schools to build public support for privatization....Click to download document