Nationalized Industries

What are Nationalized Industries?

Nationalized Industries refers to a business enterprise that was once
operated by the private sector, but now government owned and
controlled businesses. They tend to provide essential services for their
consumers. The business is usually seen as beneficial to the country and
can no longer be operated by the private owners due to high costs and
operations being inefficient. It is supported by taxpayers’ money and
does not operate on the basis of making profit.
Nationalized Industries are usually operated by boards, which are
appointed a member of parliament. Every board has a chief executive
officer (CEO) that revises the administrative affairs and reports the
government ministry.
Why does a business become nationalized?
1. In both the private and public sectors, persons are employed but
however, being a Nationalized Industry more employment can be
created and secured rather than a private sector.
2. Private sectors are not willing to expand for the benefit of the
member of society.
3. Governments nationalize to revitalize a declining industry,
therefore pushing forward new investments.
4. The business usually provides essential services and can be better
owned and operated by the government.
5. When the private owners do not enough capital required to provide
goods and services efficiently and at a reasonable price to
consumers nationalization occurs.
Examples of Nationalized Industries are:
1. Water and Sewerage Authority (WASA)
2. Youth Training and Employment Partnership Programme Limited
(YTEPP)
3. Port Authority of Trinidad and Tobago
4. Public Transport Service Corporation (PTSC)
5. Telecommunications Services of Trinidad and Tobago Limited
(TSTT)
6. Trinidad and Tobago Electricity Commission (T&TEC)
7. National Gas Company of Trinidad and Tobago Limited (NGC)
8. Trinidad and Tobago Postal Corporation (TTPost)
9. First Citizens Bank Limited (FCB)
10. Petroleum Company of Trinidad and Tobago Limited (Petrotrin)
Advantages
1) Nationalization leads to regional economic development and not just
the country where nationalization takes place.
2) Increased employment and greater job security, and even improved
working conditions.
3) Private monopolies are prevented and are broken up due to
nationalization.
4) Lower average costs of production are transferred to consumers as
lower prices.
5) Improved quality and greater efficiency due to nationalization.
6) Encourages the use of up to date technologies therefore there is an
increased output.
Disadvantages
1) Employees receive lower wages than those employed in private
sectors.
2) Taxpayers are often burdened to paid more tax to cover the losses due
to poor management.
3) Some ministers do not exercise effective control over specialized
operations.
4) In some cases, the quality and variety of output may decline.
5) Governments may have difficulty in maintaining the industry after the
initial investment which might lead to the industry returning to the
hands of private owners.
6) Some consumers may resent the standardized production of
nationalized industries.