PRIVATIZATION IN EASTERN EUROPE AND LATIN AMERICA
This research examines the process of privatization of economic enterprises in Eastern Europe and Latin America. Where appropriate, privatization efforts in Argentina and Brazil are highlighted when considering privatization in Latin America, and privatization efforts in the Czech Republic and Poland are highlighted when considering privatization in Eastern Europe. Privatization efforts in these regions are compared with similar efforts in other regions, and where possible the privatization of telecommunications services is highlighted. The effects of privatization on the economies of the countries discussed generally and the effects on the foreign debt levels of these countries are discussed.
Privatization became, in the 1980s, a worldwide phenomenon, with 68 countries involved in such actions (Vuylsteke, 1988, pp. 111-1134). Telecommunications has been a sector involved in privatization efforts in several countries. The telecommunications industry in the United States was developed as a regulated monopoly. Technically, the organizations providing telecommunications services (primarily American Telephone & Telegraph, and General Telephone and Electronics) were private sector organizations. As regulated monopolies, however, service levels, prices, and even profits were regulated. Direct competition was absent (telecommunications companies were provided with protected markets), as was any real possibility of financial loss.
The regulated rate structure of the telecommunications industry in the United States acted as a subsidy mechanism for the industry. If there existed the possibility of financial loss, rates were increased by the governmental regulatory body to assure a predetermined profit level. The deregulation of the telecommunications industry in the United States, thus, may, in one context, be viewed as the privatization of that industry in the United States...