The Concept of Private Sector DevelopmentThere is no denying the fact
that the role playing by Private Sector and especially by Micro Economic Level like
small and medium business, in the transition economies existing in central Asia, Europe and Africa is noteworthy as from the
point of view of the most intermediary needs, so as understanding of its place
in market economy. These countries become conscious that private sector is the
basic mechanism of changes, the tool of effectual allocation and use of
resources in the context of system transformations, privatization and economy shake-up.
Creation of Competitive
market with parallel ties among manufacturers and industrial specialization is
possible due to steady development of private sector including Micro-Small and
Medium business. The entrepreneurship sector becomes the basic driving force of
economic development showing appreciation its mobility, capacity to engage wide
strata of population in the income generation activity. Indeed, the importance of
private sector in economic development and improvement of living standards of
population is caused by its potential and effective criteria as follows:
Creating new work places
Forming middle class
Increasing budget revenues
Likewise, there are some serious barriers ancillary
to some extent for the economies of the world that constrain development of
entrepreneurship and expansion of private sector in the region. These are as
Internal barriers (shortage of financial means immunity to new ideas,
absence of experience and knowledge).
Excessive intervention of the state bodies in the entrepreneurs’
Insufficient level of business activity (lack of tax stimulus,
constrained access to credit resources, markets and information, and
instability of legislative system).
In view of the above, this comprehensive research
paper provides wide spread details of private sector perspectives which would
envisage how Private sector development is required for creating markets and
transforming the people’s standard of living.
it to say that nowadays, Privatisation, has created much fascination and imitated
a wide-ranging curiosity in tumbling the task of the status in national
economies, at the same time, it has adopted active steps in enhancing the scope
of private ownership as well as private sector development. Such sort of
tendency has been developed since twenty years back. The ever-increasing demands
of privatisation envisage both the conceptual longing for smaller arena and credence
in the advanced economic performance of the private sector as a tentative flow.
the Definitions and raison d''être
a world wide economist has defined Privatisation as follows:
growing appeals of privatisation as a set of strategies for restructuring the
public sector shoot from a dissatisfaction with the time-honoured
organizational structure of the public sector.
It is claimed that the customary
agency replica originating in the Weberian approach to bureaucracy faces rigorous
problems of control and efficiency”
meanings of privatisation emanate from alternative public ownership with
private sector to the preamble of private management techniques into the public
sector. Although much awareness has been focused on the magnificent illustration
of the first type of private sector phenomena as well as creating market, likewise,
in the sale of public enterprises, the most extensive type of privatisation is
the rummage around for internal reform within the public sector under the authoty
of private management style. In
respect of the expansion of private sector, creating markets by introducing
variety of products are vitally important. In 1991, Hartley and Parker, has
carried out research work on private sector and jointly defined privatisation
in a wider perception as follows: “Privatisation
envisages denationalisation or selling-off state-owned assets, de-regulation
like liberalization, competitive tendering, collectively with the introduction
of private ownership and market arrangements in socialist states. Eastern
Europe like USSR
may be exemplified in due sense.”
it to say that privatisation is the choice of different plans premeditated to adjust
the existing equilibrium between the public and private sector.
underlying principle for privatisation, though quite versatile, has been aptly summarized by Minogue, Polidano and Hume in1998 as follows.
it is the private sector which is seen as having the managerial capacity,
flexibility and competitive drive essential for the efficient and effective
provision of many activities previously assumed to be the prefecture of public
the disenchantment with the public sector set the educate of privatization in
motion by asserting that “In many countries the public sector has failed to be
the engine of national development; in some countries it is even the main
barrier to development”. For these reasons, the concepts of private sector development influence the business communities to fulfill the mission of management system in order maximize goal as a tentative flow.