BENEFITS:

"Myths of Privatisation of SOE's in Fiji: TFL" "Privatization in Samoa"

Revenue Generation
- from the sale of shares in SOE's
Benefits & Innovation:
- TFL expectation due to competitive pressure Improved Service Provision & Productivity
- Autonomy to manage, introduced new
technology
Access to Capital
- Private investors, local and international
Effetiveness & Efficiency:
- Increased Profitability and the ability to
Reduced Gov't Debt control cost
-Selling of State owned assets
Competition Enhancement:
- Removal of Monopoly status

CONSEQUENCES

"Myths of Privatisation of SOE's in Fiji: TFL" "Privatization in Samoa"

Loss of Gov't Control:

- lead to concerns about accountability & Multinational dominace :
transparency - affect local economy and competition.

Impact on workers: Impact on Employee & Consumer:

- lead to change in employment conditions & - Privatization lead to workforce reduction,
job losses change in renumerations
- price may increase impacting affordability
Risk of Monopoly or Oligopoly:
- limiting competition & potentially harming Regulatory Challenges:
consumers
- For eg, Price Control hinders the full benefits
of Privatization
Governance Issues:
- mismanagement, abuse of privilege & power
Presentation Write-Up
“Privatization in Samoa”
Privatization, as illustrated in the case of Samoa, brings about a range of benefits and
consequences, each affecting various stakeholders differently. Let's break down the benefits and
consequences highlighted in the case study:
Benefits:
1. Revenue Generation:
 The government realized substantial revenues from the sale of shares in state-
owned enterprises, amounting to SAT$35.1 million. This revenue injection helps
to alleviate budgetary stress and finance other government initiatives.
2. Improved Service Provision and Productivity:
 Privatization led to considerable improvements in the provision of services and
products in several sectors, such as banking, gas supply, and brewing. For
example, the ANZ bank introduced new technologies, leading to enhanced
customer service, and Samoa Breweries Ltd expanded its markets and contributed
significantly to the country's exports.
3. Efficiency and Effectiveness:
 Privatization spurred management overhauls in the quest for efficiency and
effectiveness. The example of ANZ bank's profitability surge and Samoa
Breweries Ltd's cost control measures showcases this.
4. Competition Enhancement:
 Privatization often introduces competition, driving efficiency and innovation. For
instance, in the case of BOC Gases, removing its monopoly status led to increased
competition and improved service access.
Consequences:
1. Multinational Dominance:
 Privatization resulted in the dominance of multinational companies in certain
sectors, which may have implications for local economies and competition. Only
three out of the nine privatized enterprises were locally owned.
2. Impact on Employees and Consumers:
 Privatization might lead to workforce reductions and changes in employee
benefits, as seen in Samoa Breweries Ltd. Additionally, consumer prices may
fluctuate due to market dynamics, impacting affordability.
3. Regulatory Challenges:
  Regulatory challenges, such as price controls on essential goods like cooking gas,
could hinder the full realization of the benefits of privatization. BOC Gases'
cessation of supply to certain areas due to pricing issues exemplifies this
challenge.
4. Policy Coordination:
 Poor policy coordination within the government can hinder the effectiveness of
privatization initiatives. Issues like overlooking priority enterprises for
privatization, or maintaining protection for certain industries, can impede
expected outcomes.
Conclusion:
While privatization in Samoa yielded significant benefits such as revenue generation and
efficiency improvements, it also presented challenges, including regulatory hurdles and
multinational dominance. Addressing these challenges requires effective policy coordination and
balancing the interests of various stakeholders, including employees, consumers, and the
government.

“Myths of Privatization of SOE’s in Fiji: TFL”

Privatization of state-owned enterprises (SOEs) such as Telecom Fiji Ltd (TFL) can have various
benefits and consequences. Let's break down some of them with examples from the provided
text:
Benefits of Privatization:
1. Efficiency and Innovation: Privatization can lead to increased efficiency and innovation
in the provision of services. Private companies are often more incentivized to cut costs,
improve services, and innovate to remain competitive. For example, after the
privatization of TFL, there was an expectation that efficiency would increase due to the
competitive pressure in the market.
2. Access to Capital: Privatization can provide access to private capital, which can be used
for investments and expansion. Private investors may be willing to inject capital into the
company to modernize infrastructure or improve services. For instance, the formation of
Amalgamated Telecom Holdings (ATH) allowed for the infusion of capital into the
telecommunications sector in Fiji.
3. Reduced Government Debt: Privatization can help governments reduce their debt
burden by selling state-owned assets and using the proceeds to pay off debts. For
example, the sale of ATH shares to the Fiji National Provident Fund (FNPF) helped the
government reduce its deficit and achieve a budget surplus.
Consequences of Privatization:
 1. Loss of Government Control: Privatization entails the loss of government control over
essential services, which may lead to concerns about accountability and transparency. In
the case of TFL, the government lost control over the operations it was financing,
potentially impacting service delivery to the most vulnerable sections of society.
2. Impact on Workers: Privatization can lead to changes in employment conditions and job
losses, affecting worker morale and skill retention. For example, the privatization of TFL
resulted in the loss of highly experienced and skilled staff, leading to a decline in
productivity and service quality.
3. Risk of Monopoly or Oligopoly: Privatization may result in the emergence of
monopolies or oligopolies in the market, limiting competition and potentially harming
consumers. In the telecommunications sector, the dominance of ATH raised concerns
about market competition and consumer choice.
4. Social Impact: Privatization decisions may not always consider social factors such as
equity of access to services, especially for marginalized communities. For instance, the
focus on profitability may lead private companies to prioritize serving profitable market
segments over addressing the needs of underserved communities.
5. Governance Issues: Privatization can sometimes be accompanied by governance issues,
including scandals, abuse of privilege, and mismanagement by private entities. For
example, concerns were raised about conflicts of interest and potential exploitation by
board members during the privatization process of TFL.
Overall, while privatization can bring benefits such as efficiency and access to capital, it also
poses risks and challenges, particularly in terms of governance, social impact, and market
competition. Balancing these considerations is crucial for achieving positive outcomes from
privatization initiatives.

Reference:
Amosa, D. U. (2019). Privatisation in Samoa: a promise or fallacy?.
Chand, A., & Dayal, M. (2010). Myth of Privatization of SOEs in Fiji: A Case Study of Telecom
Fiji Limited. Fijian Studies, 8(2), 267Y283.