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Privatization process Essay

Privatization is the process in which a government / public owned business is transferred to the private sector. The process of privatization in El Salvador began in 1989. This procedure of privatization did not only target health care institutions but also the water, telecommunication, and the electricity systems. However this idea of privatization was not well received by the public, in fact it led to a very major strike by the doctors and nurses which lasted nine months.

There were various reasons for its rejection. Firstly, it was viewed as both an economic and political project that was meant to reconfigure relations of class in the society. Secondly, it would have put great legal barriers in the way of obtaining an American health care system. This is because it would mean that the Salvadorians working in the U. S. (most of whom don’t even have their own health insurance) were to pay for the health insurance of their relatives back at home.

Hence by disallowing the privatization of the hospitals Americans were also going to benefit. Secondly, the government had earlier tricked the citizens into the privatization of water and electricity by promising those cheaper rates and better services which instead led

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to increased charges and much poorer services. The government on the other hand supported this move claiming that it was going to bring about great reforms in the health sector. These reforms were to comprise of better medical services and lower rates.

However from many Salvadorians point of view those promises were lame since from earlier promises made to them by the government (promises made when privatizing the water and electricity systems), the prices of water and electricity had shot up and the services were also way below standard compared to when they were under the public sector. The ECLA played a major role in the introduction of policies that were to be put into action when developing of the privatized sector.

The state controlled sector on the other hand was to play its role of ensuring that the schemes developed were being applied in the correct manner. It was also to foresee the proper growth of the private sector and also help in placing controls in terms of prices which were favorable to most Salvadorians The meaning and importance of the state controlled sector in the popular national consciousness and historical memory? A state controlled sector is any institution which is managed by the government/ public.

The importance of the state controlled sector is that it can help bring about drastic improvements especially where political interests and sensitivities are favorable. Secondly incase of increased costs of production the state controlled sector is unlikely to transfer these expenses to the consumer since it is after consumer satisfaction and not profit maximizing profits. In addition, a state controlled company is more likely to acquire access to information which it can use towards its improvement / development and also help in providing better service.

In case of economic constraints, state owned companies are less likely to disintegrate since they can easily obtain a bail out from the government (This move is considered wrong economically). Due to the emphasis on general development of a country, the state owned enterprises tend to distribute their services all over the country unlike private sectors that will only focus on profit viable sections.

Conclusion As all members of the southern project know, corporate globalization has tied together the fortunes of worlds’ people as never before. However Salvador has been a pace setter in saving the dreams and hopes of the ‘common man’ in the U. S. and also proved to the world that the people also can stand for what they feel and know is right since it is the common man who feels the pinch most. References: Schuld, Leslie (2003). NACLA Report on the Americas. El Salvador: Who will have the Hospitals?

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