Privatization of State Owned Enterprises Requires a Steady Hand and a Clear Eye

Privatization of State Owned Enterprises Requires a Steady Hand and a Clear Eye
China Times editorial (Taipei, Taiwan, Republic of China)
A Translation
February 25, 2014

Summary: The NDC is the cerebrum of the Executive Yuan. The CEPD's role is more important than in the past. The National Development Council plan for privatization and the issuance of public shares must be financially sound and carefully planned. It must be executed as soon as possible, in order to save Taiwan's economic future.

Full text below:

The National Development Council will report to the Executive Yuan on the economic feasibility of the privatization policy and shares issuance plan. The nation needs long-term competitiveness. The privatization of state-owned enterprises is painful but inescapable. The public has long been skeptical of SOE privatization and share issuance. The NDC must be cautious. It must not plunder the national treasury and enrich the conglomerates. It must not result in a chilling effect.

First, we must point out why the public is so unhappy with government policy. Two years ago, hikes in gasoline prices and electricity rates provoked intense public resentment. Last year, electricity rates were hiked yet again. The government claimed that 80% of households and businesses were unaffected. But the knock-on effect was widespread. This is why the government's approval rating is down to single digits. Another cause was the first hike in gasoline prices and electricity rates. The government vowed to conduct a thorough review of Taipower and China Petroleum. But it failed to deliver. This led to the second rate hike and intensified public dissatisfaction. The government must of course act. The government dispatched two vice ministers of economic affairs to assume the chairmanship of Taipower and the chairmanship of China Petroleum. After serving as chairmen of the two SOEs, the two mean repeatedly said the SOEs should be privatized. They even drafted plans. But these never got beyond the planning stage. They failed to take any real action. They failed to implement any state-owned enterprise reform. As a result, the public lost faith in the government.

The NDC mentioned the issuance of public shares. The government intends to retain control over most of the shares, which exceed the number of shares issued. They will be non-voting shares. The legislature will not decide who has priority. Shares will be issued to the public. The assets were obtained from the public. The benefits will be returned to the public. This will avoid suspicions about conglomerates monopolizing the shares. The government intends to completely divest itself of all shares. But it has adopted a phased approach to share issuance. The government is reducing its interference in the private sector to a minimum. This is basically the right direction. But a problem persists. How will future privatization be conducted? For the moment the National Development Council has no answer.

We suggested a better way to privatize SOEs and improve operational efficiency in a previous editorial. Transform them into "publicly held but privately operated" enterprises, by issuing shares on the market. We suggested clearly calculating the cost of operating state-owned enterprises. They must all becomee profit centers. Let business be business. Let the market be the market. Let authority and responsibilities be clearly defined. This will provide incentives and boost performance. Those parts to be privatized should be dissolved. Shares should be issued, allowing them to compete with similar companies. The state-owned enterprises that are privatized will no longer be a burden. They will become cash cows. They may even generate sustainable financial returns that enrich the treasury.

Market competition is the most important concept in economics. Manufacturers want to maximize profits. But competition forces them to redouble their efforts and reduce costs. Otherwise they will not survive. In a competitive market, consumers may pick and choose as they wish. They may choose the products they are most satisfied with. Societies allocate resources more efficiently. Nations grow more rapidly.

So how should shares be issued? Actually, over the past several years, the government has been in the red. Every year share dividends become income for the National Treasury. But the price is often high and the turnover limited. Therefore the government must not sell the stock too cheaply. But there is another problem. Fair market value is currently 1.7 trillion. When the public shares are all sold, the government will cease receiving revenue.

Unions for state-owned enterprises argue that selling off state-owned enterprises sells off our national heritage. They equate it with the euphemistic "second financial reform," which made a present of national assets to well connected conglomerates. They say it will result in future electricity rate hikes and gasoline price hikes. But these concerns have solutions.

We propose that the government incorporate shares issued into a new fund. The fund may make additional investments and profits to cover the budget deficit. In other words, the income from the issuance of shares must not be treated as disposable income for the national treasury. The state-owned enterprises should receive private blue chip stocks in exchange for their shares. This will enable them to continue generating revenue.

Privatized state-owned enterprises must issue stock. Allowing every citizen to purchase shares will prevent conglomerates from monopolizing ownership. But state-owned enterprises such as China Petroleum and Taipower affect people's livelihood. The government should sell only a portion of the shares, and retain control over the companies. The government need not appoint the chairman or general manager. These duties can be handed over to professional managers. Companies must be able to withstand the test of the market. Their finances must be transparent. Those parts of state-owned enterprises that cannot be isolated and sold off, must abide by government policy. Pricing must be clear. Budgets must cover them. No ambiguity, corruption, opacity, or lack of accountabilty is allowed.

The NDC is the cerebrum of the Executive Yuan. The CEPD's role is more important than in the past. The National Development Council plan for privatization and the issuance of public shares must be financially sound and carefully planned. It must be executed as soon as possible, in order to save Taiwan's economic future.

社論－國營事業民營化 須行穩致遠
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中國時報 編輯部 2014年02月25日 04:10

國發會將向政院報告財政健全方案中的民營化政策及公股釋股計畫，基於國家長期競爭力的考量，國營事業民營化是無可逃避的痛苦選擇，但長期以來，社會對國營事業民營化及其釋股頗有疑慮，國發會規畫方案必須謹慎，既不能造成掏空國家資產、圖利財團的疑慮，更不容產生殺雞取卵的後果。

首先我們要指出，為什麼目前政府的施政滿意度如此低迷？前年油電雙漲引起巨大民怨，去年電價再漲，雖然政府宣稱80％家庭、商家不受影響，但引起廣泛的物價上漲連鎖效應，是讓施政滿意度降到個位數重大的原因。另一個關鍵是第一次漲價後，政府承諾要檢討台電中油，但是並沒有交出成績單，造成第二次上漲，人民不能心服。當然，政府也不是沒有作為，先後派了兩位經濟部次長分任台電、中油的董座，兩位董座任職後多次表示應該民營化，也提出了藍圖，但是迄今止於紙上談兵，沒有實際的作為，也沒有讓人民看到國營事業有任何改革跡象，人心因而對政府失望。

國發會提到針對公股釋股，擬選擇政府持股比率大、釋出金額多、不具政策性任務、立院無決議限制的對象為優先。釋股策略傾向優先採全民釋股，取之於民，還利於民，以免引來財團化疑慮，政府持股目標降為零，但採分年分階段釋出，將政府對民間企業干涉降至最低。這些方向基本上正確，但仍有問題，未來如何民營化，目前國發會並沒有陳述。

我們曾在社論中指出，推動國營事業民營化，提升營運效率，轉型為「公有民營」讓股票上市，可能是更適當的道路。我們也提出，要清楚計算國營事業負擔的政策任務，各單位要改為利潤中心制，讓任務歸任務、市場歸市場，權責分明，可以提高努力誘因、提振績效。宜市場化的部分可拆解出來讓股票上市，與類似的公司競爭，引進民間的營運監督機制；則國營事業，不但不會是負擔，也會變成金雞母，甚至可以持續的帶來財源，充裕國庫。

市場的競爭機制是經濟學最重要的理念，廠商雖然追求最大利潤，但在競爭機制中必須卯足全力，降低成本，否則無法生存。消費者在競爭的市場中可以撿三挑四，選擇最大滿足的產品。整體而言，社會就可以得到資源的最有效配置，國家也可以成功的發展。

至於有關釋股部分，其實過去幾年，政府因為財政赤字，每年都有編列釋股收入挹注國庫。但多次因為價位不理想，實際上成交有限。因此政府是不會隨便賤賣股票，但另外的問題是，目前公股市值1.7兆元。當公股全賣光時，政府就沒有後續的收入。

我們也不能苟同一般國營事業工會的論點，認為國營事業市場化就是賣祖產，就是等同二次金改，就是會落入財團手裡，就會造成未來的電費、油價亂漲。這些疑慮是有辦法解決的。

我們的主張是，政府應將釋股收入整合成新的基金，基金可以進行其他的投資，利潤才能填補財政赤字。換句話說，釋股收入不應是一次性的挹注國庫；而應該以國營事業的股票來換取民間績優公司的股票，進而產生後續綿延的收入。

國營事業民營化股票必須上市，全民釋股可以避免財團獨買，但中油台電等與人民生計有關的國營事業，政府只可賣出部分股票以保有公司主導權。事業的經營，政府不見得要派董事長或總經理，可以交給專業經理人，公司必須在市場接受考驗，但公司的財務是透明的。沒有辦法切割出來上市的國營事業部分，未來接受政府政策任務時，應該有清楚的價格化，政府必須編列預算來執行，而不是不清不楚，藏汙納垢，渾水摸魚，無法檢驗。

國發會是行政院大腦中樞，比過去經建會的角色更重。我們期望國發會對財政健全方案的民營化政策及公股釋股計畫能有充分的規畫，盡速的執行，挽救台灣目前發展的困頓。