Essay on The Global Economy
The global economy is comprised of a multifaceted patchwork of key actors, which contribute to the development, sustainability, and strategic direction of a country. With this said, it is crucial to assess the key players of an economy with regards to the composition of public and private enterprises. The effectiveness and significance of these public and private enterprises need to be analyzed in order to measure the scope of positive or negative impact it has on the national economy when taking into account the nation’s economic indicators.
Sustainable development requires the participation of key economic actors in society, especially the government and the private sector. It requires both economic and institutional …show more content…
The introductory section of the paper will define state owned enterprises and its prevalence in the MENA region through the use of statistical data. The factors that contribute to the trend of privatizing state owned enterprises would also be highlighted. Furthermore, the political economic factor affecting SOE performance will be discussed in order for the reader to understand and identify the advantages and disadvantages of acquiring SOEs in the MENA.
A. SOEs and its significance in the MENA
According to the Organization for Economic Co-operation and Development (OECD), state owned enterprises are publically or state owned enterprises (SOEs) that conduct activities on the government’s behalf. These SOEs are either wholly or partially owned enterprises. Some key characteristics of these enterprises are that they have their own statuses, employment policy, wage scales, and management team. State owned enterprises are legal entities that employ a large segment of the population which is a factor contributing to its prevalence in the MENA region (Fattouh, 2013).
The MENA region economies are comprised largely of state owned enterprises. The presence of SOEs in the MENA region is paramount, yet its contribution is minimal when looking at the contribution it has on the economy. According to the 2008 World Bank Report, total privatization proceeds in developing countries amounted to approximately $774 billion during the period of