They exist to provide services, but in some cases, they actually produce products. Many public sector firms receive government subsidies. In theory, socialism provides greater support in this area than do capitalist countries. Communist ideology forbids private sector firms. Privatization is the transfer of ownership of functions, business assets or both from the public sector to the private sector.
Privatization is conversion.
The process of privatization is occurring globally in former Communist countries, like Russia and the Ukraine. There is also a privatization trend among the socialist governments of Europe and even in a capitalist country, like the United States. Privatization is often a painful and slow process. In a former Communist country like Russia, the conversion is consuming a great deal of time and at times resembles a mine field for those engaged in the process. In other former Communist countries, like Poland and Slovakia, the process is much smoother and producing more positive results.