Cambridge International as and a level Economics Ebook

The case for privatisation
Taking the UK economy as a particular example, it is 
possible to recognise various reasons for the extensive 
privatisation shown in 
Table 3.1
. Some are economic, 
others much more concerned with political motivation. 
For example:
■
a deliberate commitment to reduce government 
involvement in the economy
■
to widen share ownership among the population and 
among the employees of the privatised companies
■
benefits for consumers in the form of lower prices, wider 
choice and a better quality product or service
■
the sale of nationalised industries has generated substantial 
income for the UK government over a long period of time. 
This has been estimated to be £70–80 billion
■
privatised companies can be successful in raising capital, 
lowering prices and cutting out waste; they are more 
eff icient than state-owned operations.
Fuel and power
National electricity generation and regional supply
National gas production and regional supply
Coal production
Nuclear power production
Transport
Railways: passengers and freight
Local and national bus services
Some major airports
British Airways, the national airline
Some road freight services
Some ferry services and ports
Other
Water supply
Telephones and telecommunications
Various manufacturing companies including British 
Steel, British Aerospace, British Petroleum, British Sugar 
Corporation, Rover Group, British Shipbuilders
Table 3.1 
Privatisation in the UK economy between 1979 and 
2000
76
Cambridge International AS Level Economics

---

SELF-ASSESSMENT TASK 
3.4
Myanmar to privatise railways
Myanmar’s government is planning to privatise some of 
the state-owned railway lines soon, including the Yangon 
circular railway system, according to the Ministry of Rail 
Transportation.
The privatisation will include the Yangon circular 
train, a Yangon–Mandalay train and a Yangon–Myitkyina 
train. The privatisation plan is now underway and the 
Yangon–Myitkyina rail line will be prioritised, the 
ministry said.
Many changes have been made in Myanmar’s railway 
sector since 2011. The Yangon–Mandalay railroad 
and the Yangon circular railway system are currently 
undergoing upgrades. Buildings under the ministry 
have been rented out to private companies, and a plan 
to renovate the Yangon Central railway station is also 
underway.
The ministry said that only a few of the more than 
400 train lines under its management across the 
country can be described as money-makers.
Source:
Asia News Network, 3 January 2014.
Read the feature below and then answer the questions that follow.