The Full Wiki

Nationalization: Map

Advertisements
  
  
  

Wikipedia article:

Map showing all locations mentioned on Wikipedia article:



Nationalization, also spelled nationalisation, is the act of taking an industry or assets into the public ownership of a national government or state. Nationalization usually refers to private assets, but may also mean assets owned by lower levels of government, such as municipalities, being state operated or owned by the state. The opposite of nationalization is usually privatization or de-nationalisation, but may also be municipalization. A renationalization occurs when state-owned assets are privatized and later nationalized again, often when a different political party or faction is in power. A renationalization process may also be called reverse privatization.

The motives for nationalization are political as well as economic. It is a central theme of certain brands of 'state socialist' policy that the means of production, distribution and exchange, should be owned by the state on behalf of the people to allow for rational allocation and operation, and rational planning or control of the economy. Many socialists believe that public ownership enables people to exercise full democratic control over the means whereby they earn their living and provides an effective means of redistributing wealth and income more equitably.

Nationalized industries, charged with operating in the public interest, may be under strong political and social pressures to give much more attention to externalities. They may be obliged to operate some loss making activities where social benefits are clearly greater than social costs - for example, rural, postal and transport services. As an instance, the United States Postal Service is guaranteed its nationalised status by the Constitution. The government has recognized these social obligations and, in some cases, provides subsidies for such non-commercial operations.

Since the nationalised industries are state owned, the government is responsible for meeting any debts incurred by these industries. The nationalized industries do not normally borrow from the domestic market other than for short-term borrowing. However, if profitable, the profit is often used as a means to finance other state services such as social programs and government research which can help lower the tax burden.

Nationalization may occur with or without compensation to the former owners. If it takes place without compensation it is a case of expropriation. Nationalization is distinguished from property redistribution in that the government retains control of nationalized property. Some nationalizations take place when a government seizes property acquired illegally. For example, the French government seized the car-makers Renault because its owners had collaborated with the Nazi occupiers of France.

Compensation

A key issue in nationalization is payment of compensation to the former owner. The most controversial nationalizations, known as expropriations, are those where no compensation, or an amount far below the likely market value of the nationalized assets, is paid. Many nationalizations through expropriation have come after revolutions.

The traditional Western stance on compensation was expressed by United States Secretary of State Cordell Hull, during the 1938 Mexican nationalization of the petroleum industry, that compensation should be "prompt, effective and adequate." According to this view, the nationalizing state is obligated under international law to pay the deprived party the full value of the property taken. The opposing position has been taken mainly by developing countries, claiming that the question of compensation should be left entirely up to the sovereign state, in line with the Calvo Doctrine. Communist states have held that no compensation is due, based on socialist notions of private properties.

In 1962, the United Nations General Assembly adopted Resolution 1803, "Permanent Sovereignty over National Resources", which states that in the event of nationalization, the owner "shall be paid appropriate compensation in accordance with international law." In doing so, the UN rejected both the traditional Calvo-doctrinist view and the Communist view. The term "appropriate compensation" represents a compromise between the traditional views, taking into account the need of developing countries to pursue reform even without the ability to pay full compensation, and the Western concern for protection of private property.

When nationalizing a large business, the cost of compensation is so great that many legal nationalizations have happened when firms of national importance run close to bankruptcy and can be acquired by the government for little or no money. A classic example is the UK nationalization of the British Leyland Motor Corporation. At other times, governments have considered it important to gain control of institutions of strategic economic importance, such as banks or railways, or of important industries struggling economically. The case of Rolls-Royce plc, nationalized in 1971, is an interesting blend of these two arguments. This policy was sometimes known as ensuring government control of the "commanding heights" of the economy, to enable it to manage the economy better in terms of long-term development and medium-term stability. The extent of this policy declined in the 1980s and 1990s as governments increasingly privatized industries that had been nationalized, replacing their strategic economic influence with use of the tax system and of interest rates.

Nonetheless, national and local governments have seen the advantage of keeping key strategic assets in institutions that are not strongly profit-driven and can raise funds outside the public-sector constraints, but still retain some public accountability. Examples from the last five years in the United Kingdom include the vesting of the British railway infrastructure firm Railtrack in the not-for-profit company Network Rail, and the divestment of much council housing stock to "arms-length management companies", often with mutual status.

Notable nationalizations by country

Argentina



Australia



Bolivia

  • 2006 On May 1, 2006, newly elected Bolivianmarker president Evo Morales announces plans to nationalize the country's natural gas industry; foreign-based companies are given six months to renegotiate their existing contracts.


Canada



Channel Islands



Chile



Cuba

The Castro government gradually expropriated all foreign-owned private companies after the Cuban Revolution of 1959. Most of these companies were owned by U.S. corporations and individuals. Bonds at 4.5% interest over twenty years were offered to U.S. companies, but the offer was rejected by U.S. ambassador Philip Bonsal, who requested the compensation up front. Only a minor amount, $1.3 million, was paid to U.S. interests before deteriorating relations ended all cooperation between the two governments. The United States established a registry of claims against the Cuban government, ultimately developing files on 5,911 specific companies. The Cuban government has refused to discuss the effective and adequate compensation of U.S. claims. The United States government continues to insist on compensation for U.S. companies. In 1966-68, the Castro government nationalized all remaining privately owned business entities in Cuba, down to the level of street vendors.

Czechoslovakia

  • 1948-1990 All manufacturing enterprises.


Egypt

  • 1956 On July 26, 1956 Egyptianmarker President Gamal Abdel Nasser nationalized the Suez Canal Company, provoking the United Kingdom, France and Israel to launch a combined attack on Egypt that was stopped by the U.S. and the Soviet Union.


France

Nationalization in France dates back to the 'regies' or state monopolies first organized under the Ancien Régime, for example, the monopoly on tobacco sales. Communications companies France Telecom and La Poste are relics of the state postal and telecommunications monopolies.

There was a major expansion of the nationalised sector following World War II. A second wave followed in 1982.
  • 1938 Societe Nationale des Chemins de Fer Francais (SNCF) (originally a 51% State holding, increased to 100% in 1982)
  • 1945 Several nationalizations in France, including most important banks and Renault. The firm was seized for Louis Renault's alleged collaboration with Nazi Germany, although this condemnation was without judgement and after his death, making this case remarkable and rare. A later judgement (1949) admitted that Renault's plant never collaborated. Renault was successful but unprofitable whilst nationalised and remains successful today, after having been privatized in 1996.
  • 1946 Charbonnages de France, Electricite de France (EdF), Gaz de France (GdF)
  • 1982 A large part of the banking sector and industries of strategic importance to the state were nationalized under the new president François Mitterrand and the PS-led government. Many of those companies were privatized again after 1986.


The Paris regional transport operator, Regie Autonome des Transports Parisiens (RATP), can also be counted as a nationalised industry.

Germany

The German railways were nationalised after World War I. Partial privatisation of Deutsche Bahn is currently underway, as of 2008.

Most enterprises in East Germany were nationalised following World War II. After reunification, an agency, Treuhand, was established to return them to private ownership. However, due to structural and economic problems inherent in the previous regime, many of these had to be liquidated.
  • 2008 Renationalization of the "Bundesdruckerei" (Federal Print Office), which had been privatized in 2001.


Greece



Iceland



India

The nationalised banks were credited by some, including Home minister P. Chidambaram, to have helped the Indian economy withstand the global financial crisis of 2007-2009.

Iran



Ireland

Railways in the Republic of Ireland were nationalised in the 1940s as Coras Iompair Eireann.
  • 2007 On August 3, 2007, the Irishmarker government were offered a stake in Eircom's copper network infrastructure. Ireland's telephone networks were privatised in 1999.
  • 2009 On January 15, 2009, the Irish Government announced plans to nationalise Anglo Irish Bank in order to secure the bank's viability.


Israel

  • 1983 Nationalization of the major Israeli banks: Bank Hapoalim, Bank Leumi, Discount Bank, Mezrachi bank due to the Bank stock crisis that struck Israel in 1983.


Italy



The regime of Benito Mussolini extended nationalisation, creating the Istituto per la Ricostruzione Industriale (IRI) as a State holding company for struggling firms, including the car maker Alfa Romeo. A parallel body, Ente Nazionale Idrocarburi (Eni) was set up to manage State oil and gas interests.

Japan



Malta



Mexico

  • 1938 The Expropriation of the Petroleum Industry of Mexico: President Lázaro Cárdenas issued a decree that the petroleum companies were in rebellion against the government of Mexico and under the powers granted him under the Expropriation Act passed by the Congress of Mexico in late 1936 expropriated them. March 19, 1938 union personnel took conrol of the properties.
  • 1982 The nationalization of the Mexican banking system made by President José López Portillo, later in the Carlos Salinas de Gortari presidency (1988-1994) a large number of banks were privatized.


The Netherlands

  • 2008 The Dutch State nationalizes the Dutch activities of Belgian-Dutch banking and insurance company Fortis, which had come in solvability problems due to the international financial crisis.


New Zealand

  • 2001 Central government purchased the Auckland railway network from TranzRail.
  • 2003 The Labour Government of New Zealand took an 80% stake in near-bankrupt national air carrier Air New Zealand in exchange for a large financial infusion.
  • 2004 The rest of the country's rail network is purchased from Toll New Zealand, formerly known as TranzRail. A new state owned enterprise, ONTRACK, was established to maintain the rail infrastructure.
  • 2008 The rolling stock of Toll New Zealand was purchased by central government, bringing the rail system under total state ownership and renamed as KiwiRail.


Pakistan

  • 1972 On January 2, 1972, Zulfiqar Ali Bhutto, after the fall of East Pakistan, announced the nationalisation of all major industries, including iron and steel, heavy engineering, heavy electricals, petrochemicals, cement and public utilities.


Philippines

During the administration of Ferdinand Marcos, important companies such as PLDT, Philippine Airlines, Meralco and the Manila Hotelmarker were nationalized. Other companies were sometimes absorbed into these government-owned corporations, as well as other companies, such as Napocor and the Philippine National Railways, which in their own right are monopolies (exceptions are Meralco and the Manila Hotel). Today, these companies have been reprivatized and some, such as PLDT and Philippine Airlines, have been de-monopolized. Others, like government-formed and owned Napocor, are in the process of privatization.

Poland



Portugal

After the Carnation Revolution, the Junta de Salvação Nacional (temporary government) nationalized all the banking, insurance, petrol and industrial companies. Along with the telecommunications companies, which were state-owned even before the Revolution, all the nationalized companies were reprivatized.

2008: BPN - Banco Português de Negócios bank nationalised to prevent its collapse.

Romania

  • 1948 With the Decree 119 June 1948 the new Romanian communist regime nationalised all the existing private companies and their assets in Romania leading to the transformation of the Romanian economy from a market economy to a planned economy.


Russia

  • 1998 The Yeltsin government began seizing Gazprom assets, claiming that the company owed back taxes. Privatization of Gazprom from the mid 1990's had been reduced to 38.37% with the intention of achieving full privatization. However, the stake of the Russian Government in Gazprom has since been increased to 50% with Vladimir Putin's plan to increase the stake to a controlling position. Gazprom is also buying up both Russian and other international Utility companies.


South Korea

  • 1946 USAMGIK nationalized all South Korean private railroad companies and made Department of Transportation. This now becomes Korail.


Soviet Union

  • 1918 All manufacturing enterprises and many retailing enterprises.


Spain

  • 1941 Spain's railways were nationalised, as RENFE, in the aftermath of the Spanish Civil War.
  • 1983 Nationalization without compensation of the Spanish Rumasa. Separate business were later privatized.


Sri Lanka

  • 1958 The Government nationalised Bus transport (creating the Ceylon Transport Board). The Colombo Port was also nationalised the same year.
  • 1961 The local subsidiaries of the foreign owned petroleum companies, Caltex, Esso and Shell had formed a cartel, in order to break which they were nationalised. The Insurance companies and the Bank of Ceylon were also nationalised in the same year.
  • 1971 Graphite mines nationalised.
  • 1972 Locally owned Tea and Rubber plantations were nationalised under the Land Reform law.
  • 1975 Sterling plantation companies (owned by Britishmarker plantation companies) were nationalised.
  • 2009 Seylan Bank nationalised to prevent its collapse.


Sweden

  • 1939-1948 Nationalisation of most of the private Railway companies.
  • 1957 The mining company LKAB is nationalized. The state had owned 50% of the corporation's shares, with options to buy the remainder, since 1907.
  • 1992 A large part of Sweden's banking sector is nationalized.


United Kingdom

The following companies/industries were the subject of nationalisation in the given year:

British assets nationalised by other countries



United States

  • 1917: All U.S. railroads were nationalized as the Railroad Administration during World War I as a wartime measure, but were returned to their private owners almost immediately after the war.
  • 1939: Organization of the Tennessee Valley Authority entailed the nationalization of the facilities of the former Tennessee Electric Power Company.
  • 1971: The National Railroad Passenger Corporation (Amtrak) is a government-owned corporation created in 1971 for the express purpose of relieving American railroads of their legal obligation to provide inter-city passenger rail service. The (primarily) freight railroads had petitioned to abandon passenger service repeatedly in the decades leading up to Amtrak's formation.
  • 1976: The Consolidated Rail Corporation , another government corporation, was created to take over the operations of six bankrupt rail lines operating primarily in the Northeast; Conrail was privatized in 1987. Initial plans for Conrail would have made it a truly nationalized system like that during World War I, but an alternate proposal by the Association of American Railroads won out.
  • 1980s: Resolution Trust Corporation seized control of hundreds of failed S&L.
  • 2001: In response to the September 11 attacks, the then-private airport security industry was nationalized and put under the authority of the Transportation Security Administration.
  • 2008: Some economists consider the U.S. government's takeover of the Federal Home Loan Mortgage Corporation and Federal National Mortgage Association to have been nationalization. The conservatorship model used with Fannie Mae and Freddie Mac is looser and more temporary than nationalization.
  • 2009: Some economists consider the U.S. government's actions with regards to Citigroup to have been a partial nationalization. Proposal made that banks like Citigroup be brought under a conservatorship model similar to Fannie Mae and Freddie Mac, that some of their "good assets" be dropped into newly created "good bank" subsidiaries (presumably under new management), and the remaining "bad assets" be left to be managed under the supervision of a conservatorship structure. The U.S. government's actions with regard to General Motors in replacing the CEO with a government approved CEO is likewise being considered as nationalization. On June 1, 2009, General Motors filed for bankruptcy, with the United States investing up to $50 billion and taking 60% ownership in the company. President Obama stated that the nationalization was temporary, saying, "We are acting as reluctant shareholders because that is the only way to help GM succeed"


Venezuela

  • 2007 On May 1, 2007, Venezuelamarker stripped the world's biggest oil companies of operational control over massive Orinoco Belt crude projects, a controversial component in President Hugo Chavez's nationalization drive.
  • 2008 On April 3, 2008, President Hugo Chavez ordered the nationalization of the cement industry.
  • 2008 On April 9, 2008, Hugo Chavez ordered the nationalization of Venezuelan steel mill Sidor, in which Luxembourgmarker-based Ternium currently holds a 60% stake. Sidor employees and the Government hold a 20% stake respectively.
  • 2008 On August 19, 2008, Hugo Chavez ordered the take-over of a cement plant owned and operated by Cemexmarker, an international cement producer. While shares of Cemex fell on the New York Stock Exchangemarker, the cement plant comprises only about 5% of the company's business, and is not expected to adversely affect the company's ability to produce in other markets. Chavez has been looking to nationalize the concrete and steel industries of his country to meet home building and infrastructure goals.
  • 2009 On February 28, 2009, Hugo Chavez ordered the army to take over all rice processing and packaging plants.


Zimbabwe

  • Zimbabwemarker has nationalized its food distribution infrastructure.


Other countries



See also



References

  1. The Constitutional Centre of Western Australia | The Role of The High Court
  2. Myers (1949)
  3. PSU banks' policies saved India from financial blushes: Chidambaram
  4. The importance of public banking
  5. Eircom and State in broadband swap?
  6. The Expropriation of the Petroleum Industry of Mexico in 1938
  7. A Historic Journey Luossavaara-Kiirunavaara Aktiebolag, April 2006
  8. Stopping a Financial Crisis, the Swedish Way
  9. http://news.bbc.co.uk/1/hi/business/7250252.stm
  10. http://www.historytoday.com/dt_main_allatonce.asp?gid=9859&g9859=x&g9857=x&g30026=x&g20991=x&g21010=x&g19965=x&g19963=x&amid=9859
  11. http://www.data-archive.ac.uk/findingData/snDescription.asp?sn=1825
  12. http://www.uksteel.org.uk/history.htm
  13. "What was the last nationalisation?", BBC News, 18 February 2008
  14. http://www.publications.parliament.uk/pa/cm200102/cmhansrd/vo020212/text/20212w16.htm
  15. http://news.bbc.co.uk/1/hi/business/7249575.stm
  16. http://www.reuters.com/article/economicNews/idUSBINGLEY20080929
  17. US rescue of Fannie, Freddie poses taxpayer risks
  18. Diamond and Kashyap on the Recent Financial Upheavals
  19. Nature of Citi stake debatable
  20. http://www.usnews.com/blogs/mary-kate-cary/2009/03/30/am-i-the-last-capitalist-obama-falters-on-rick-wagoner-gm-and-the-auto-industry-.html
  21. “If, in fact, Wagoner resigned because somebody in government said, ‘You have to resign,’ then I think we have nationalized the auto industry, at least GM, and I think that’s bad to have the government have a socialized car industry,” -Sen. Chuck Grassley (R-Iowa)
  22. http://www.washingtonpost.com/wp-dyn/content/article/2009/06/01/AR2009060101480.html
  23. http://english.aljazeera.net/NR/exeres/78BD5E2C-6A4B-4787-BAF7-7F764A8BF7A0.htm
  24. http://www.reuters.com/article/worldNews/idUSN0942912020080409?feedType=RSS&feedName=worldNews
  25. http://www.forbes.com/markets/2008/08/19/cemex-venezuela-chavez-markets-equity-cx_ra_0819markets41.html
  26. http://news.bbc.co.uk/2/hi/americas/7917176.stm


Bibliography

On banks nationalization















External links




Embed code:
Advertisements






Got something to say? Make a comment.
Your name
Your email address
Message