ASi" kUCTURE FlOR DEVELOPMENT

Table 3.2 Value of infrastructure privatizations in developing countries, 1988-92
(iil&ns of U.S. d.:rs)
Total, Nzmurberof
Subserlor 1988 1989 1990 1991 1992 1988-92 countries
Telecommtunications 325 212 4,113 5,743 1,504 11,821 14.
Power generation 106 2,100 20 248 1,69 4,164 9
Power distribution 0 0 0 98 1,037 1,135 2
Gas distribution 0 0 0 0 1X96 1,906 2
Railwads 0 0 0 110 217 327 1
Road infrastructure a 0 250 0 0 250 1
Ports U 0
.0 0 7 7 2
Wa ter 0 0 0 0 175 175 2
Total 431 2,312 4,037 6,200 6,535 19,785 15
Closely nrlaled priuatization±
Airlines 367 42 775 168 1,461 2,13 14
SPipping 0 0 0 135 1 136 2
Road transport 0 0 0 11012 13 3
Total developingacounty privatizations 2,587 5188 5,618 220-49 23.187 61,629 25
Rt Countriesd undertakng infrastructure priv- zatioaO.-
198&- power-Mcdcw, telecomn-Belize,Chile,jamaica,Turkcey airlines-Argentina, Mac.lea
1989: power-Korea; tOeom-Chile,Jamaica airlines-ChileO
199Th power-Malaysia, Turkeyr telecom-Argentina, Belize, Chile, Jamaica, Malaysia. Meico, Poland; roads--Argentina; airlines-
Arentin, Brazi Mexico, Pa.istan
1991: powver gerieration--Chile, Hungairy ponwe distribution-Philippines; railroads-Argentina; telecom-Pagentina, Barbados, Beli2e,
Hungary, Jamaica, Mexico, Peru, Philippines, Ventezuea; airtines-4-londuras, Hungar', Panama, Turkey, Venezuela; shipping-Nlalkysia; road
transport-Toga.
1992 power generation-Argentina, Beliz Malasia, Poland: power di2Sbution-A8tina. Phippines; gas distribution-Aag0tia2
Turkey: telecom-Argentinad eFstonia, M2lysia, Turkey, railroads-Argentina; parts-Colombia, Pakistan water-Argentina, Malvsia: airlinE9-Cwechaslovalda,
Hungan Malaysia, Mexic, Panama, Philppines, Thailand; shipping-S Mc, Lanaad transport-China, Pair.
Source Sader 1993.
obligations. in addition to line growth require- whatever the path, success requires a sustained
ments, the concession requires improvements mi ser- commitment to private entry The transitional
vice quality Telmex has more than met the targets phase can be effectively managed through enforceand
has announced plans to invest $13 billion over able contracts that create incentives foir the entrefive
years to upgrade equipment, add access lines, preneur to be efficient while also embodying the
and improve service-
public interest-
Underpinning these requirements is the concemr A statutory regulatory system that provides for
that a monopoly service provider-such as dear and open enforcement of the terms of the con-
Telmex-may restrict output below socially desir- tracts is 4ilso required, although its absence has not
able levels. While this may be a legitimate concern held up private entry- The design of such regulation
in the longer term, it sits uneasily with the current may weUl benefit from contractual experience with
situation in many, if not most, developing countries. early entrants. Effective statutory regulation re-
Levels of service provision are now so low that even quires predictable and nondiscrmin-natory rules and
an unfetteed monopolist would face strong incen- the creation of consumer constituencies.
tives to expand-and to do so at lower cost t9an the
public sector providers of the past. Roll-out require- Twansitions in market structures
ments may consequently be unnecessary and, when
used to secure the provision of services on uneco- Should the move to a market-based system occur
nomic terms to particular areas or consumers, can in a single step, or can it be achieved more graduperpetuate
psrcing distortions.
ally? There are no simple answers. What is important
is that tohe shift to market provision be credi-
Paths to market provisio mn ble. Without that, private entrepreneurs are not
likely to take on new investmnents. Commitments
The move from government monopoly to competi- from govermnents are most credible when ar the
tive market provision has taken many routes, but, enablng measures needed for pvriate entry and
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