Nationalization

Nationalization (or nationalisation) is the process of transforming private assets into public assets by bringing them under the public ownership of a national government or state.[1] Nationalization usually refers to private assets or assets owned by lower levels of government, such as municipalities, being transferred to the state. The opposites of nationalization are privatization and demutualization. When previously nationalized assets are privatized and subsequently returned to public ownership at a later stage, they are said to have undergone renationalization. Industries that are usually subject to nationalization include transport, communications, energy, banking, and natural resources.

Nationalization may occur with or without compensation to the former owners. 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, in 1945 the French government seized the car-makers Renault because its owners had collaborated with the Nazi occupiers of France.[2]

Nationalization is to be distinguished from "socialization", which refers to the process of restructuring the economic framework, organizational structure, and institutions of an economy on a socialist basis. By contrast, nationalization does not necessarily imply social ownership and the restructuring of the economic system. By itself, nationalization has nothing to do with socialism, having been historically carried out for various different purposes under a wide variety of different political systems and economic systems.[3] However, nationalization is, in most cases, opposed by laissez faire capitalists as it is perceived as excessive government interference in, and control of, economic affairs of individual citizens.

Compensation

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

The traditional Western stance on compensation was expressed by United States Secretary of State Cordell Hull during the Mexican nationalization of the petroleum industry in 1938, saying 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.

Socialist states have held that no compensation is due, based on the view that private ownership over socialized assets is illegitimate, exploitative, or a hindrance to further economic development.

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 the traditional Calvo-doctrinal 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 the protection of private property.

In the United States, the Fifth Amendment requires just compensation if private property is taken for public use.

Political support

Nationalization was one of the major mechanisms advocated by reformist socialists and social democrats for gradually transitioning to socialism. In this context, the goals of nationalization were to dispossess large capitalists, redirect the profits of industry to the public purse, and establish some form of workers' self-management as a precursor to the establishment of a socialist economic system.[4]

In the United Kingdom after the Second World War, nationalization gained support by the Labour party and some social democratic parties throughout Europe. Although sometimes undertaken as part of a strategy to build socialism, more commonly nationalization was also undertaken and used to protect and develop industries perceived as being vital to the nation's competitiveness (such as aerospace and shipbuilding), or to protect jobs in certain industries.

A re-nationalization occurs when state-owned assets are privatized and later nationalized again, often when a different political party or faction is in power. A re-nationalization process may also be called "reverse privatization". Nationalization has been used to refer to either direct state-ownership and management of an enterprise or to a government acquiring a large controlling share of a publicly listed corporation.

Examples

Chile

In 1972 the Chilean government acquired control of the major foreign-owned section of the Chilean copper mining industry. The process, commonly described as the Chilenización del cobre[5], started under the government of Carlos Ibáñez del Campo, and culminated during the government of President Salvador Allende, who completed the nationalization.

Colombia

Granahorrar Bank was a bank based in Colombia (1972- 1998). When it was open, it was part of a business conglomerate called Grupo Grancolombiano. The conglomerate also owned Banco de Colombia (Bancolombia), which is Colombia's largest bank. In 1982, the conglomerate underwent a period of crisis. Consequently, the Colombian government nationalized Granahorrar Bank; effectively, the government took over the bank by force from its private owners.[6]

Germany

The railways were nationalized after World War I. Deutsche Bahn, the German railway company is owned by the Federal Republic. In 2008, it was agreed to "float" a portion of the business, meaning an end to the 100% share the German Federal Republic had in it, with a plan that 25% of the overall share would be sold to the private sector[7] . However the onset of the financial crisis of 2007–08 saw this cancelled.[8]

Mexico

In 1982, President José López Portillo started the nationalization of the Mexican banking system, in response to the debt crisis. Under the Carlos Salinas de Gortari presidency (1988–1994) the nationalized banks were privatized very rapidly between 1991 and 1992 to Mexican family groups privatized.[9]

Venezuela

Since 2007, the government of Hugo Chávez started the nationalization of different companies. It started with the world’s biggest oil companies (May 1, 2007). On April 3, 2008, Chávez ordered the nationalization of cement industry and on April 9, the nationalization of Venezuelan steel mill, among other industries such as cement and rice processing and packaging plants. [10] [11] [12] [13]

See also

References

  1. ^ "Definition of NATIONALIZATION". www.merriam-webster.com.
  2. ^ Chrisafis, Angelique (December 14, 2011). "Renault descendants demand payout for state confiscation". The Guardian. London.
  3. ^ Hastings, Mason and Pyper, Adrian, Alistair and Hugh (December 21, 2000). The Oxford Companion to Christian Thought. Oxford University Press. p. 677. ISBN 978-0198600244. At the heart of its vision has been social or common ownership of the means of production. Common ownership and democratic control of these was far more central to the thought of the early socialists than state control or nationalization, which developed later...Nationalization in itself has nothing particularly to do with socialism and has existed under non-socialist and anti-socialist regimes. Kautsky in 1891 pointed out that a ‘co-operative commonwealth’ could not be the result of the ‘general nationalization of all industries’ unless there was a change in ‘the character of the state’.
  4. ^ The Economics of Feasible Socialism Revisited, by Nove, Alexander. 1991. (P.176): "Nationalisation arouses no enthusiasm, in the minds of most socialists and anti-socialists. It would probably be agreed that hopes which reposed on nationalisation have been disappointed. Conservatives hold that this is due to defects inherent in nationalisation, that private enterprise based on private ownership is inherently superior. (Mrs Thatcher’s government tried to ensure that this was so by preventing essential investments and ordering the nationalized industries to sell off their more successful undertakings.)...The original notion was that nationalization would achieve three objectives. One was to dispossess the big capitalists. The second was to divert the profits from private appropriation to the public purse. Thirdly, the nationalized sector would serve the public good rather than try to make private profits...To these objectives some (but not all) would add some sort of workers' control, the accountability of management to employees."
  5. ^ The History of Codelco
  6. ^ "Pelea de Socios". Semana (Sección Economía) (in Spanish). No. 815. 12 January 1998. Retrieved 24 May 2018.
  7. ^ "Partial sale of DB agreed" Railway Gazette International May 2008 page 289.
  8. ^ "DB flotation on hold" Railway Gazette International November 2008 page 843.
  9. ^ Marois, Thomas (2008). "The 1982 Mexican Bank Statization and Unintended Consequences for the Emergence of Neoliberalism". Canadian Journal of Political Science. 41 (1): 143–167. doi:10.1017/s0008423908080128.
  10. ^ Al Jazeera English - Americas - Chavez nationalises cement industry Archived 2008-05-11 at the Wayback Machine
  11. ^ "Venezuela Seizes Cemex - Forbes.com". Archived from the original on October 10, 2008.
  12. ^ "Venezuela to nationalize steelmaker Sidor: union". Reuters. April 9, 2008.
  13. ^ "Chavez sends army to rice plants". BBC News. March 1, 2009. Retrieved May 20, 2010.

External links

1962 Quebec general election

The Quebec general election of 1962 was held on November 14, 1962, to elect members of the Legislative Assembly of the Province of Quebec, Canada. The incumbent Quebec Liberal Party, led by Jean Lesage, was re-elected, defeating the Union Nationale (UN) led by Daniel Johnson, Sr..

In an unusual move, the election was called just two years after the previous 1960 general election. Lesage sought a mandate for the nationalization of the electricity industry, with the slogan Maîtres chez nous (Masters in Our Own Home), declaring it a single issue important enough to stake his political career on it.

A few days before the election, the Union Nationale's chief organizer André Lagarde was arrested for fraud. The Liberals claimed this was proof of lingering corruption dating from the Maurice Duplessis era, but the UN cried foul and was vindicated after the election. However, the incident may well have contributed to the UN's defeat.

The Liberal Party won an increased number of seats and a higher percentage of the popular vote, and the nationalization program was carried out. Future Parti Québécois founder René Lévesque served as a cabinet minister in the Lesage government and spearheaded the nationalization of power utilities for a great expansion of Hydro-Québec.

Abadan Crisis

The Abadan Crisis (Persian: بحران آبادان‎ Bohrân-e Âbâdân) occurred from 1951 to 1954, after Iran nationalised the Iranian assets of the BP controlled Anglo-Iranian Oil Company (AIOC) and expelled Western companies from oil refineries in the city of Abadan (see Abadan Refinery).

Chilean nationalization of copper

The nationalization of the Chilean copper industry, commonly described as the Chilenización del cobre or "Chileanization of copper," was the process by which the Chilean government acquired control of the major foreign-owned section of the Chilean copper mining industry. It involved the three huge mines known as 'La Gran Mineria' and three smaller operations. The Chilean-owned smaller copper mines were not affected. The process started under the government of President Carlos Ibáñez del Campo, and culminated during the government of President Salvador Allende, who completed the nationalization. This "act of sovereignty" was the espoused basis for a later international economic boycott, which further isolated Chile from the world economy, worsening the state of political polarization that led to the 1973 Chilean coup d'état.

Corporate sector of Pakistan

The Corporate sector of Pakistan (otherwise attributed as the Corporatization; or/ simply referred to as the Pakistan Inc.) is an elite business sector expanded in financial cities of Pakistan, and a policy measure programme in the economic period of Pakistan. This programme is also regarded as "Pakistan Inc.", which is a drive common term used by the mass-media of Pakistan to refer to the corporate sector of the nation. This policy measure programme was first conceived, envisioned and implemented then-Finance Minister Ghulam Ishaq Khan and President General Zia-ul-Haq in order to lay the foundation of Western styled corporate sector. President Zia-ul-Haq issued the decree, the Companies Ordinance No. 1984, in 1984 that legally allows a variety of formations in the mixed economy of Pakistan.

The programme was started on 8 October 1984 in a vision to promote Western-styled corporate sector, and business activities development in Pakistan. The corporate sector came in direct response to nationalization programme of executed Prime Minister Zulfiqar Ali Bhutto and the Pakistan Peoples Party to promote . This programme was integrated in Privatization programme of Prime minister Nawaz Sharif in 1990 who gave free hand to private sector to expand the economical activities in the country. The corporate sector remained to expand in Prime minister Benazir Bhutto's government who promoted the nationalization and privatization at once. In 2004, in a programme initiated by Prime minister Shaukat Aziz, the corporate sector further enhanced and matured; it had built a strong and sizeable sector in the financial hubs of the country.

Under Aziz, many of state-owned megacorporations along with private sector had been registered in stock exchanges of the country in order to promote business competition in the country.

Financial compensation

Financial compensation refers to the act of providing a person with money or other things of economic value in exchange for their goods, labor, or to provide for the costs of injuries that they have incurred.

Kinds of financial compensation include:

Damages, legal term for the financial compensation recoverable by reason of another's breach of duty

Nationalization compensation, compensation paid in the event of nationalization of property

Payment

Remuneration

Deferred compensation

Executive compensation

Royalties

Salary

Wage

Employee benefits

Workers' compensation, to protect employees who have incurred work-related injuries

Japanese Government Railways

The Japanese Government Railways (JGR) was the national railway system directly operated by the central government of Japan until 1949. It is a predecessor of Japanese National Railways and the Japan Railways Group.

KLM Interinsulair Bedrijf

KLM Interinsulair Bedrijf (KLM-IIB) was an airline based Netherlands East Indies (present-day Indonesia) and the precursor to Garuda Indonesia.

Mexican oil expropriation

The Mexican oil expropriation (Spanish: expropiación petrolera) was the nationalization of all petroleum reserves, facilities, and foreign oil companies in Mexico on March 18, 1938. In accordance with Article 27 of the Constitution of 1917, President Lázaro Cárdenas declared that all mineral and oil reserves found within Mexico belong to "the nation", i.e., the federal government. The Mexican government established a state-owned petroleum company, Petróleos Mexicanos, or PEMEX. For a short, this measure caused an international boycott of Mexican products in the following years, especially by the United States, the United Kingdom, and the Netherlands, but with the outbreak of World War II and the alliance between Mexico and the Allied powers, the dispute with private companies over compensation were resolved. The anniversary, March 18, is now a Mexican civic holiday.

Nationalisation in Pakistan

The Nationalisation process in Pakistan (or historically simply regarded as the "Nationalisation in Pakistan") was a policy measure programme in the economic history of Pakistan, first introduced, promulgated and implemented by the first democratically elected Prime Minister Zulfikar Ali Bhutto and the Pakistan Peoples Party to lay the foundation of socialist economics reforms to improve the growth of national economy of Pakistan. Since the 1950s, the country had undergone a speedy industrialisation and became an industrial paradise in Asia. But, as time progressed, the labour trade unions and labour-working class had increasingly strained relations with the industrial business oligarch class, having neglected to improve working conditions and failing to provide a healthy and safe environment for the workers in these industrial industries.The nationalisation programme began on 2 January 1972, with a vision to promote economic democracy, liberalisation, and an initial mainstream goal to put Pakistan in line with state progressivism. Ended effectively in 1977, the nationalisation programme was again put forward by Prime Minister Benazir Bhutto in 1996, and most recently by then-current Prime minister Yousaf Raza Gillani in 2012 who activated the programme to bring three major megacorporations (Steel Mills, Railways and International Airlines) under government ownership in an attempt to improve its structure and to alleviate its profitable process.Despite its success in its formative years, such policy measure programmes met with an extreme level of spontaneous demonstration and international and national opposition that left disastrous effects on Pakistan's national economy until it was replaced with the privatisation programme set forward by Prime Minister Nawaz Sharif in 1990 until the programme's final execution in 2008 by Shaukat Aziz.

Nationalization in Romania

The nationalization of the means of production was a measure taken by Romania's new Communist authorities in order to lay the foundation of socialism. The act that allowed this measure to take place was Law 119, adopted by the Great National Assembly on June 11, 1948. Article 1 decreed subject to nationalization "all the wealth of the soil not in the property of the state at the time of entry into force of the Constitution of the Romanian People's Republic, as well as individual enterprises, societies of any type and private industrial, bank, insurance, mining, transport and telecommunications associations". Nationalized (generally without any form of compensation) were 8,894 industrial, mining, transport, banking and insurance companies, followed in November 1948 by 383 cinemas and medical-sanitary facilities. By 1950, the measure was applied to chemical enterprises, pharmacies and remaining economic entities.

The nationalization also included a significant number of homes. The figure of around 400,000 buildings is regularly mentioned. According to Societatea Academică din România (SAR) between 241.000 and 600.000 properties were affected by the measure.

The nationalization begun in 1948, together with the collectivization of agriculture (1949–62), were decisive in undoing the capitalist economy and establishing a socialist economy based on state-owned or cooperative property.

After the fall of communism in Romania, the state has tried to compensate homeowners and enterprise owners who could not recover their houses, industries, or lands. A special fund dedicated to compensation was created in 2005: Fondul Proprietatea.

Nationalization of oil supplies

The nationalization of oil supplies refers to the process of confiscation of oil production operations and private property, generally in the purpose of obtaining more revenue from oil for oil-producing countries' governments. This process, which should not be confused with restrictions on crude oil exports, represents a significant turning point in the development of oil policy. Nationalization eliminates private business operations—in which private international companies control oil resources within oil-producing countries—and allows oil-producing countries to gain control of private property. Once these countries become the sole owners of these confiscated resources in violation of contract law, they have to decide how to maximize the net present value of their known stock of oil in the ground.

Several key implications can be observed as a result of oil nationalization. "On the home front, national oil companies are often torn between national expectations that they should 'carry the flag' and their own ambitions for commercial success, which might mean a degree of emancipation from the confines of a national agenda."According to consulting firm PFC Energy, only 7% of the world's estimated oil and gas reserves are in countries that allow private international companies free rein. Fully 65% are in the hands of state-owned companies such as Saudi Aramco, with the rest in countries such as Russia and Venezuela, where access by Western companies is difficult. The PFC study implies political groups unfavorable to capitalism in some countries tend to limit oil production increases in Mexico, Venezuela, Iran, Iraq, Kuwait and Russia. Saudi Arabia is also limiting capacity expansion, but because of a self-imposed cap, unlike the other countries.

Nationalization of the Iranian oil industry

The nationalization of the Iranian oil industry (Persian: ملی شدن صنعت نفت‎) resulted from a movement in the Iranian parliament (Majlis) to seize control of Iran's oil industry, which had been run by private companies, largely controlled by foreign interests. The legislation was passed on March 15, 1951, and was verified by the Majlis on March 17, 1951. The legislation led to the nationalization of the Anglo-Persian Oil Company (AIOC). The movement was led by Mohammad Mosaddegh, a member of the Majlis for the National Front and future prime minister of Iran. The movement to nationalize the oil industry was the reaction to the following concessions made by Iran to foreign powers: the Reuter concession of 1872, proceeding letter,D'Arcy Concession?] the 1933 agreement between the Iranian government and AIOC, and the Gas-golshaian[?] contract. According to the political scientist Mark J. Gasiorowski, the oil nationalization movement had two major consequences: the establishment of a democratic government and the pursuit of Iranian national sovereignty.

PDVSA

Petróleos de Venezuela, S.A. (PDVSA, Spanish pronunciation: [peðeˈβesa]) (English: Petroleum of Venezuela) is the Venezuelan state-owned oil and natural gas company. It has activities in exploration, production, refining and exporting oil as well as exploration and production of natural gas. Since its founding on 1 January 1976 with the nationalization of the Venezuelan oil industry, PDVSA has dominated the oil industry of Venezuela, the world's fifth largest oil exporter.

Oil reserves in Venezuela are the largest in the world and the state-owned PDVSA provides the government of Venezuela with substantial funding resources. Following the Bolivarian Revolution, PDVSA was mainly used as a political tool of the government. Between 2004 and 2010, PDVSA contributed $61.4 billion to the government's social development projects, with around half of this went directly to various Bolivarian Missions while the remainder distributed via the National Development Fund. Profits were also used to assist the presidency, with funds directed towards allies of the Venezuelan government.With PDVSA focusing on political projects instead of oil production, mechanical and technical statuses deteriorated while employee expertise was removed following thousands of politically-motivated firings. Incompetence within the company has led to serious inefficiencies and accidents as well as endemic corruption. As a result, thousands of workers have abandoned their work for PDVSA, especially after PDVSA was put under military control.

Public holidays in São Tomé and Príncipe

This is a list of holidays in São Tomé and Príncipe.

Public service

Public service is a service which is provided by government to people living within its jurisdiction, either directly (through the public sector) or by financing provision of services. The term is associated with a social consensus (usually expressed through democratic elections) that certain services should be available to all, regardless of income, physical ability or mental acuity. Even where public services are neither publicly provided nor publicly financed, for social and political reasons they are usually subject to regulation going beyond that applying to most economic sectors. Public policy when made in the public's interest and motivations can provide public services. Public service is also a course that can be studied at a college or university. Examples of public services are the fire brigade, police, air force, and paramedics.

Railway Nationalization Act

The Railway Nationalization Act (鉄道国有法, Tetsudō Kokuyū-hō, Act No. 17 of 1906) brought many of Japan's private railway lines under national control. The 22nd Diet of Japan passed the bill on March 27, 1906 and Emperor Meiji signed on March 30, 1906. The promulgation of the act on the Official Gazette occurred the next day. The Act was repealed by Article 110 of the Act for Enforcement of Japanese National Railways Reform Act Etc. (Act No. 93 of 1986).

The original bill which passed the House of Representatives on March 16, 1906 listed 32 private railways to be nationalized, but the House of Peers amended the bill removing 15 companies from the list on March 27, 1906 and the House of Representatives accepted this amendment the same day.Between 1906 and 1907, 2,812 miles (4,525 km) of track were purchased from 17 private railway companies. The national railway network grew to about 4,400 miles (7,100 km) of track, and private railways were relegated to providing local and regional services.

Railway nationalisation in Argentina

In 1948, during President Juan Perón's first term of office, the seven British- and three French-owned railway companies then operating in Argentina, were purchased by the state. These companies, together with those that were already state-owned, where grouped, according to their track gauge and locality, into a total of six state-owned companies which later became divisions of the state-owned holding company Ferrocarriles Argentinos.

State ownership

State ownership (also called public ownership and government ownership) is the ownership of an industry, asset, or enterprise by the state or a public body representing a community as opposed to an individual or private party. Public ownership specifically refers to industries selling goods and services to consumers and differs from public goods and government services financed out of a government’s general budget. Public ownership can take place at the national, regional, local, or municipal levels of government; or can refer to non-governmental public ownership vested in autonomous public enterprises. Public ownership is one of the three major forms of property ownership, differentiated from private, collective/cooperative, and common ownership.In market-based economies, state-owned assets are often managed and operated as joint-stock corporations with a government owning all or a controlling stake of the company's shares. This form is often referred to as a state-owned enterprise. A state-owned enterprise might variously operate as a not-for-profit corporation, as it may not be required to generate a profit; as a commercial enterprise in competitive sectors; or as a natural monopoly. Governments may also use the profitable entities they own to support the general budget. The creation of a state-owned enterprise from other forms of public property is called corporatization.

In Soviet-type economies, state property was the dominant form of industry as property. The state held a monopoly on land and natural resources, and enterprises operated under the legal framework of a nominally planned economy, and thus according to different criteria than enterprises in market and mixed economies.

Nationalization process of transferring private or municipal assets to a central government or state entity. Municipalization is the process of transferring private or state assets to a municipal government.

United States Railroad Administration

The United States Railroad Administration (USRA) was the name of the nationalized railroad system of the United States between December 28, 1917, and March 1st, 1920. It was possibly the largest American experiment with nationalization, and was undertaken against a background of war emergency.

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