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Ra Un ae eee Di, EEE ublic corporations are owned by ner Ths, means that the government chooses the people who " Nisations,, often a board of directors. The government is also responsible for its, , key policies. Most public corporations are accountable to a government, minister and they are sometimes called state-owned enterprises (SO, ", en, , , , , , , , , , , , , Public corporations are created by ai, resources owned by a business, , anisation are specified clea ct., are i This, ity. sued and enter, vw, ay such as cash, stock, machinery, tools and, and liabilities of public corporations belong to the state., , equipment owever, public, corporations can also borrow money and are free to reuse revenue from the, , portfolio a collection (of business, , interests or products) or services., , subsidy financial support given to a a : Mo: jo make a, , domestic producer by the government is to ide : ‘ample, Air, ides i al air transport i ; ién Espanola (TVE), , provides a national broadcasting service in Spain and the NHS provides, free healthcare in the UK. Profit is not usually the main reason behind public, , , , Public corporations have to produce annual reports, e government minister in charge. In the end, they, , Accountable :é action. sac, reasons ible for any acoet able to the, will either be reinvested in the, , ‘ n nq hy on'- The nature and number of public corporations around the world can vary in, vb ji c ©O po each country. For example, although a great number of public corporations, , p around the world exist to provide a public service, there are many that operate, ~ : commercially with the aim of making a profit. In the UAE, a number of large, «BD Raul ways ¢ D E $ A businesses that aim to make a profit are owned by the government. Emirates, Airline and Dubai World, an investment company that manages a portfolio of, , BR Te e f IM R N businesses and projects for the government of Dubai, are examples., °, , Svea, . Jangla ba n k : Scanned with CamScanner

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[REASONS FOR THE PUBLIC OWNERSHIP OF BUSINESSES, The amount of business activity taking place in the public sector has fallen, , in many countries in recent years. However, public corporations still provide, , a wide range of important services. Below are some of the main reasons for, public ownership., , economic rare \i wiped, , exists. This means it eee, providing a service for the whole market instea of, , uplicating several similar businesses. Such industries includ, and public utilities where a large infrastructure is needed before trading can, , begin. It wou!d be a waste of resources if, for example, two or more water, : Nel una) monopoly :- companies built their cwn system of pipes to distribute water to all households, —_———, ——, , : oan in an area., f ‘, o H ch. Control of strategic in cay, x It may be argued that it is better for industries that are strategically important, wy X to , such as CED ond to be, a mankel Hal Is mos t owned by the government. This would prevent businesses from another, , . try taking them over and exploiting the nation., e iciently served by ry e ploning, , CT VOCABULARY V hyoidl i j, SUBJE in some industries, , duplicating making an exact copy of, something, , , , , , . A n some cases, businesses have been taken into public ownership to save, Strategically in a way that helps to jobs. A government might take control of a failing private sector business if it, achieve a particular plan or purpose, , : employs very large numbers of people. It might be preferable to allow a lossmass affecting a large number of people making business to carry on trading if ir prevents mass unemployment., , Jobs in public conponation filly #sevned., , Scanned with CamScanner

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i?, , , , , , , , In some markets, th, , , , ample, It is ideal th n, , 's society as a whole. However, the private, , le school places for those who are prepared to Pay,, ‘en would be left inadequately educatey, fford to pay or would choose not, , 2 medical t, , f di § sector would only provid @, Publi c conpangTion Re Consequently, a large number of childr, because their parents either could not a, because Priva busiwsses topay., , contel ANGI meds °F ve aut ne erin, , the private sector would not deliver important services to, , unprofitable regions. For example, the cost of providing electricity to a remote, , eveny One: farm many miles away from the main power lines would be too high fora, Private sector operator. However, a public corporation may be prepared to, , meet this cost because profit is not a key objective., , is argued by s esses should not be run by the government., This is because pubic onnersip has some disadvantages., , , , , , , These losses have to >, , Renfe, the Spani, lo pay for some loss, pe, making services — Cercanias (suburl istancia (regional)., If losses are big and frequent, taxpayers might object to the financial, , responsibilities., , See ee tions are often criticised for tet eat anc, , Subsidy - govt Financial suppont, , , , , , productivity the rate at which goods For example, in some countries (such as the UK) public sector rail, are produced, and the amount produced, ere iticised for the poor reliabili f trains. The, especially in relation to the work, time and cause of suc! often blamed on, money needed to produce them AE, Difficult to control, (eas Tele Ue Some public corporations are very eine ey may employ many thousands of, a1 eine workers spread across a wide geographical area and own huge quantities of, eee Bote Be ot ey, physical assets. This might make it difficult to coordinate different parts of the, com business and run it effectively., , , , Scanned with CamScanner

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DUSINGSS ANU Full It CHECLIVEly., , , , AVE SyVEL6))\, , SUA See le NEN, , privatisation the transfer of public sector, resources to the private sector, , In many countries, the number of public corporations has been reduced., , For example, in the last 30 years, several hundred state-owned enterprises, have been transferred to the private sector in Egypt. Many Eastern European, countries have also transferred a lot of government-run businesses into, , the private sector following the break-up of the Soviet Union. The process, of transferring public sector resources to the private sector is called, privatisation. Privatisation can take a number of forms., , & Sale of public corporations: The sale of public corporations has been a, common way of transferring business activity from the public to the private, sector. One way of doing this is to sell shares in the business to anyone, , who wants them. In some cases, governments have sold off parts of stateowned businesses over a period of time., , Scanned with CamScanner

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e :, ; COMMERCIAL id Si UL _ 9 PUBLIC CORPORATIONS AND PRIVATISATION, , (Nae ele A U0 iy Saree:, , restrictions things that limit what you, can do, , @ Deregulation: This involves removing legalrestrictions that prevent private, , sector competition. For example, Malaysia has deregulated the gas and, power sector. This has paved the way for the introduction of Independent, Power Producers (IPPs) in the industry., , Contracting out: Some public services have been contracted out to the, private sector. This is where contractors are given a chance to provide a, service that was previously supplied by the public sector. Examples include, the provision of school meals, hospital cleaning and refuse collection., , The sale of land and property: In some countries, the government has, sold land to the private sector. For example, in Sri Lanka where about 80, per cent of land is owned by the state, plots have been sold to tea growers, , in the private sector., , Scanned with CamScanner