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Question

Difficulty: MediumPrivatization, Commercialization, and Deregulation of Public Enterprises

Under a national economic reform program, a government-owned seaport authority was restructured to operate as a self-sustaining corporate entity aimed at making profit, without any transfer of equity to private investors or removal of state ownership. Which structural reform policy does this transformation illustrate?

  1. CommercializationAnswer
  2. B
    Outright privatization
  3. C
    Market deregulation
  4. D
    Indigenization

Answer

Commercialization
Commercialization is the policy where state-owned enterprises are restructured to operate strictly on commercial principles to earn profit and remain financially independent, while the state retains full ownership.

Step-by-Step Solution

1
Analyze the features described in the scenario.
The enterprise is restructured to operate commercially for profit and cover its expenses, but government ownership is entirely retained.
Identifying the ownership status and operational mandate distinguishes public sector reform policies.
2
Compare the scenario features against definitions of economic reform policies.
Operating public corporations as profit-making corporate bodies while keeping state ownership is the exact definition of commercialization.
Commercialization changes operational focus and management autonomy without changing ownership.

Key Concept

Commercialization of Public Enterprises
Estimated Time:1m 0s
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Topics

Privatization, Commercialization, and Deregulation of Public Enterprises

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