3 Africa; (iv) EBRD data on privatization in Europe and Central Asia (the tens of thousands of enterprises that were privatized through mass privatization or voucher schemes are not covered in this database); (iv) Privatization Barometer for selected European countries; (v) various other sources such as Latin Finance and Privatization International; and (vi) various government and non-government websites. All data are in current U.S. dollars.

4. While proceeds are commonly used to measure privatization trends, several caveats should be highlighted upfront. First, the heterogeneity of data sources covering a long time period may inevitably lead to data discrepancies, though every effort has been made to ensure consistency. Second, proceeds may be underreported in some countries because of lack of data or poor quality data. Third, data on privatization methods, the percent of shares divested, and the extent of foreign vs. domestic participation are only available in a few cases or for the earlier time period, and these factors are therefore not covered in any great detail in the analysis. Fourth, and related, proceeds from minority share sales may raise revenues but do not necessarily imply major changes in the control of state-owned enterprises or their improved efficiency. Fifth, proceeds are subject to swings from a few large transactions in a few countries and are thus not necessarily indicative of widespread activity or radical restructuring of the state sector in a particular country or region. Sixth, there are varying definitions of proceeds but for the most part data are based on gross proceeds rather than net proceeds to the government, which are likely to be lower after all privatization costs have been covered. Finally, the analysis includes only central level enterprises, with a few exceptions of state or provincial level utilities in a few major countries for which such data are available. In light of these caveats, the set of numbers presented here are meant to be seen as an overall indication of approximate broad trends rather than an exhaustive listing of each and every transaction in developing countries.

5. Section II of the paper highlights privatization trends for developing countries as a whole, followed by regional and sectoral breakdowns. Section III examines the extent to which government ownership is prevalent in developing countries, by region and sector. Section IV concludes with a summary of recent developments and issues going forward.

# **II.   PRIVATIZATION TRENDS:  1990 to 2003**

6. The reasons for privatization are well established and are not covered in any great detail here. Developing countries have used privatization as a tool to: improve the productivity of state enterprises which is typically two to three times lower than private firms and in some cases significantly lower; access investment capital and improve service delivery of high cost critical sectors that impact the economy as a whole; and reduce the fiscal burden of lossmaking firms.

7. With these objectives in mind, 120 developing countries carried out 7,860 transactions between 1990 and 2003, generating close to $410 billion in privatization proceeds, or 0.5