There will vary types of world on earth and each of them has another structure and way of ruling the united states. But one of the things they have as a common factor is the government intervention throughout the market. There are different reasons for the government for doing that.
The first reason for the government intervention in the economy is to provide "essential services". The federal government establish a civil service whose goal is to rule the united states, a country needs a service to safeguard and serve the individuals, thats why we have the Garda. Open public move is put to the disposition of the citizen to help people who can't manage a car to really have the possibility to go wherever they need institution, work etc these service are provide by the government and have to be like that because they're the kind of service which private companies are not suited to do.
Another reason is "the development of the current economic climate"; the federal government have to provide for their citizens, to carry out so it must make sure to produce enough food for the population or import the total amount needed when they can not produce it. The government have the duty to encourage people to get started on business to contribute to the progress of the overall economy by applying something of grants, minimizing or offering duty concessions which will help new business to build up. The government may use a taxation system to correct the behaviour of the contemporary society. A good example is "the plastic handbag levy in 2002". To discourage people using cheap bag the government required visitors to pay 15c for clear plastic bag. The result by doing so came quickly as we notice a 90% cut down on the use of plastic bag.
"Merit needs" is another reason behind government treatment as every person in the country has the to have a basic quality lifestyle. They do that by redistributing the wealth, taking from the rich to provide to individuals who have less, the sociable welfare and the taxation. As education is very important nowadays and it is a key in the building of a robust society the federal government make education available to everybody. It gives the possibility to the son of your farmer with an similarly good education as the child of the chief executive of a huge company. Other civil institutions such as museums, public parks are easily open to the folks.
The fourth reason is "strategic interest", if the business sector is vital for the market of the united states the government invest profit that sector to develop it to be able to prosper it. In Ireland the main sector are tourism and agriculture. And they are very well toned compare to less important nationwide companies as the textile industry which is much less important as the other two.
The example I've chosen for the government intervention in the economy is "An post" in in the region of "provide services that the government believe shouldn't be left to the market forces".
An Post is the name of the Irish Post Office, which is the state company responsible for the postal, financial and other services all around the state. Before the development in the telecommunications sector which helped bring internet, mobile phone people used characters to keep in touch with their family, but not only them the federal government or merchants everyone was utilizing it as it was the one ways to send something. Since 1837 the post in Ireland has increased his service to react to the demand of the citizens because the government was there to aid it and do what it needed to improve it. Because the post offers service to the population the government cannot let it to the private section, because it is bind by the common service obligation and the private section are not. Their definitive goal to accomplish is to make profit by any cost. The post provide service to everybody without distinction, the man living next to the post get his mail as the granny who lives at the top of a pile. Thing that can be cut by an exclusive company as it cast money to do and a similar thing may happen to unprofitable service, going out of only those that are profitable. That won't happen with the government as the making of income is under the professional of service.
In my thoughts and opinions authorities providing some services rather than private sector is a good thing for the populace as it brings joy to people whenever we take the example of the post. It's not everybody who may use computer or prefer to use it to wish or notify something to their relatives, a few of them are mounted on the utilization of post card and letters. Presenting that sector to the private is to use the risk to see some of them cut. And it'll be difficult to the federal government to speak to those who choose post as telecommunication when they want to see them.
However to provide those services the government has to borrow funds or find another way to finance them as they cost lot of money and authorities companies generally don't make revenue. And by the end it's the taxpayer who has to pay for the government loss. Another thing when they actually strike, that affect the economy decrease it and make the united states losing money. We can take including the hit of employees of S. N. C. F in France, which is the business of railway transport and every time each goes on strike, it causes problem to people who use the transportation as a result of hold off of the trains. Everything in the united states is in slow-motion and that a big damage for the federal government.
The term privatisation is the noun from the verb "privatise", which suggest the copy of the products of goods or services from the general public sector to a private possession or a non-governmental institution.
Government usually privatise his possessions to reducing his borrowing. When a company is run by the government it generally does not value making loss or profit because even if it makes loss the government is there to compensate the deficit and yank money on it. The government want to do that as closing a company will definitely cost him more price in the future.
Another reason is "the pass on of possession in the Irish industry". Ireland became a member of the E. U in 1973and in the E. U legislation the state of hawaii cannot contain the ownership of the complete professional sector. It must give some to the private companies and let them run them. A country where the state operates all the essentials Industries doesn't have the diversification of products to lead the consumers to truly have a choice. The consumers can only one choice and we fall into a monopoly system and that is the particular E. U didn't want as the consumers possess the right to determine the product they would like to buy, which is the essential basis of democracy. This brings us to another reason which is "more competitive of rates policy". For instance Bord Telecom Eireann back 1984 which is now Eircom was the only telecommunication distribution in Ireland. Due to that B. T. E got all the power over the clients; they decide the price and the consumers were obliged to pay as you will need it for personal use. But now with the wide open of the marketplace we've different societies which provide telecommunications services and you could decide the main one to use rely upon what you want it for.
The fourth reason is the "capital and the search of profit". A business can raise the administrative centre he need by a loan from the banking institutions or money from shareholder. When the government is left by itself and must raise the money by borrowing from the central loan provider which really is a very gradual process as he must go through lot of documentation before getting that money. As well as the search of profit, as for a corporation investing money in a job, their main objecting is making benefit from that. Because they need to pay the loan to the bank, the purchases he received from the lenders and some dividend for themselves, they are more focus on profit which raise the entrepreneurial activities and overall economy efficiency.
I find the exemplory case of the privatisation of Eircom since it was a major affair back in those days and it shows perfectly what privatisation is.
The privatisation of Eircom in 1999 took place as a result of E. U laws and regulations of the opening up market in all E. U countries. So they wanted that Ireland privatise Eircom in order to end his monopoly in the telecommunication market. The privatisation of Eircom was a huge success as the federal government received 8. 4 Billion from that which money was put into a pension fund. But the federal government didn't sell off Eircom straight away but it was an activity of 4 years. First the state of hawaii was the owner of the company and in 1996 it sold 20% of the share to KNP/Felia for 232 million, 3years later it sold 14. 8% to ESOT. And the rest of the shares were floated on the Irish, British and New-York stock exchange market on the 8 July 1999. To make the operation successful the government encouraged visitors to buy the shares, and people did it. But what they did not know is the price was set too much at 3. 90 and it gone up again to 4. 80 which is 23% increase. And the result was the dramatically fall of the price of the share to come back to its valuable price. Many small traders who didn't know a great deal about the stock market investment lost lot of money, because they weren't alert to the risks.
I think privatisation is wii solution as it pertains to help the federal government financial situation, and in some sector I think they control of the government will be an improved managment when compared to a private pressure.
As we can see with the privatisation of Eircom which initially was successful but when we analyse the after privatisation what we should can easily see is a company struggling and which have great deal of deficit. Since privatisation Eircom has approximately between 3. 6-3. 75 Billion of arrears and in 2011 it must cut the salary of the employees by 10%, as well as were 2000 people who lost their job. The company has truly gone from hand at hand because the privatisation but it situation still the same.
However the positive point of that privatisation was the fall of the phone prices. Because due to the privatisation of Eircom numerous of another companies came up in Ireland and now we've competitively in the sector.
Public Private Relationship or P. P. P is when the private section invests money to build a public infrastructure project. That means instead of using his money for building the project (for example a clinic) the federal government make a partnership contract with an exclusive company which will use his own capital to create the hospital and can get his cash back as specify in the deal they made. PPP help the state to cut his spend on the infrastructures and use the private sector to develop it rather than him.
There will vary models of P. P. P:
- The DBFO where the private company design the building, funding, build and operate it when it surface finishes.
-The DBO in that case the business only design the building, build and operate it but it's the government which finance it
-The DBF here the private company design, build and financing it.
-OF the company only operate and fianc the building the federal government do the rest
-Operate only in this previous case all is manufactured by the federal government.
With PPP the private company is in charge of the development and the maintenance of the building or finished. they were supposed to build. And the service is delivering by the private sector when they finish the construction. As the private sector is taking risk using this method it gets some pay back in exchange from the collaboration. In the PPP the private sector passions is still responsible to the federal government, as the infrastructure or services belong to the state of hawaii.
For my example I required "The countrywide maritime college or university of cork" which opened up on the 11th of October 2004 without delay in enough time identify in the deal and without exceeding the budget of the start. It had been the Minister for Education & technology, the Cork Institute of Technology and the Irish Naval Service who wanted to build the infrastructure. The task was conducted by Bovis Lend Lease and Uberior Infra Investment Ltd 50% part for each. The value of the construction was projected at 52 million but the total finance of the job was 67 million. The task was invested with the money of shareholders and the money from European standard bank. The term of contract assign to the private sector the design and the build of the infrastructure to the private sector plus the finance and maintain of computer until 2029. The school supply the education and training for the merchant navy and non-military training of the Naval Services and also training for the Maritime industry. Relating to Minister Hanafin "one of the key sights of the PPP process is the fact it allows the faculty management and personnel to focus on their center management and educational duties and not the day to day procedure of the building".