Nationalisation and privatisation

Question 1

Definition of nationalisation

Answer 1

Nationalisation is the taking over of an industry or firm by the state and placing it in the hands of a public corporation.

Question 2

Reasons for nationalisation and privatisation

Answer 2

-to overcome inequalities in the distribution of wealth and to ensure:
-to obtain a balanced development
-to maintain a stable level of prices
-to ensure a study growth of national production

Question 3

Benefits of nationalisation

Answer 3

-ownership and control of national resources would ensure that profits accruing from them remain in the region and are used for further development.
-certain social benefits may be provided for the community.
-nationalisation facilitates overall planning for the whole economy,

Question 4

Definition of privatisation

Answer 4

privatisation is the founder of ownership of state-owned companies to private enterprise.

Question 5

Advantages of privatisation

Answer 5

• privatisation prevents the wastage of public funds in state companies that are inefficient and are making huge annual leases.
  -it raises revenue for the government
  -it prevents interference from politicians
  -it weakens public-sector unions

Question 6

Disadvantages of privatisation

Answer 6

-control of significant resources by private individuals is inacceptable in a democracy.
-it is difficult to get buyers for firms which have heavy debts and huge pension rights

Question 7

Trade liberalisation

Answer 7

-trade liberalisation by means of deregulation.
- transfer of assets from public to private sector.