State-Owned Enterprises in the Development Process

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This publication is a first response of the OECD to the issue of what role is, or can be, assigned to SOEs as part of national development strategies. The first part of the publication overviews the experiences of five countries (Brazil, China, India, Singapore and South Africa) with using SOEs, and other government-controlled entities as agents of their development strategies. The second part reviews the growing internationalisation of SOEs through foreign trade and investment. These show implications that the usefulness of SOEs in promoting economic development hinges on a number of factors, not least the level of economic development at the beginning of the process. Indeed, if the government’s ambition is to follow a development path already trod by numerous comparable nations it is relatively easy to hammer out a strategy and provide the SOEs with company-specific objectives toward the fulfilment of the strategy. However, experience also shows that some crucial conditions generally need to be met for such SOE-based strategies to be successful, taking into account the capacity of national bureaucracies and avoiding possible adverse impacts on international trade and investment.





The role of state-owned enterprises (SOEs) in countries’ development process, an integral part of the political economy in most of the emerging economies with which the Organisation for Economic Co-operation and Development (OECD) partners, is not without controversy. The issue gains importance on policy-makers’ agenda because of separate, but related, concerns about how to maintain a level playing field (as addressed by previous OECD publications discussing the issue of ”competitive neutrality”) in a global economy where SOEs from emerging economies increasingly coexist with privately owned companies.


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