ASi" kUCTURE FlOR DEVELOPMENT

'sv,t-za6oapioceeds (billions of VS.EdEllArs)h
~~~~~~~~~~g Q-
market development are best considered within an dones (ENTel) in Argentna, Compalifa de Tel&
integrated faujiework.
fonos de Chle (CrC) in Chile, and Teifonos de
M:idco (Telmex) in Mexico-and one in eLectric
PRmVArIZAnON. The privatization of ifrastructure power generation, Chilgener in Chile, illustrate the
concerns has given a boost to local stock markets. Of implications of privatization for financial markets.
the $61.6 billion of revenue obtained by developing * All except Chilgener sought a strategic (or
countries from the privadzation of public enter- core) investor in order to introduce management expises
between 1988. and 1992, about one-third ($21 pertise and to 'create a commitment to further
billion) came from the privatization of infrastmuture growth.
entities. Aggregate proceeds from infrastructme pri- - * A significant proportion of shares was-sold to
vatization have been highest in Latin America, with the general public, and in all cases shares were allothe
most activity being in telecommunications (Fig- cated to employees.
ure 5.3). Some Asian countries, such as Malaysia and - Substantial proceeds from the initial stock of-
Korea, have opted for partial privafizatior. Ouside ferings and subsequent rises in share prices have
Latin America and- Asia, however, privatization has given these companies a dominant position in their
so far had a limited impact.
domestic capital markets.
Techniques for financing privatization have im- . The two Argentine telephone companies constiplications
for the broadening of share ownership on tute almost-40 percent of the market capitalization
stock markets and for the gneral development of in Buenos Aires, and Telmex dominates in Mexico
capital markets. Three privatizations in telecom- with a 20 percent share. These large capitalizations
munications-Empresa Nadonal de Telecomunica- have attracted financing from pension funds, creat-
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