Reprivatization refers to the process of restoring properties seized or otherwise nationalized from privately held owners by a government to privately held status. This may include returning seized property or compensating uncompensated former owners, or reprivatizing state held enterprises to new owners, especially banks, which were privately founded but came under state control due to economic crisis or other factors. The latter scenario is sometimes referred to as privatization, though scholars have specifically referred to the sale of nationalized Mexican and Korean banks to private shareholders as reprivatization. The terms reprivatization and privatization are sometimes used to describe similar processes. The term privatization is more often used to describe the transfer of property under long-term government control to private owners, while reprivatization implies the property being returned to privately held status came under government control on a circumstantial basis. Both terms have been used in connection with larger privatization schemes in the former Soviet Bloc, particularly the process of assigning new property rights.
Reprivatization to private owners has been sought by any number of parties whose property has been nationalized, including the traditional nobility in certain areas of Europe, Holocaust survivors, their descendants, and other survivors of persons who died in Nazi death camps and whose property was confiscated by the Nazis or by later Communist states and disposed of in various ways; and by corporations.
A significant barrier to reprivatization is created by larger political questions, which vary by country. In Eastern Europe, there is frequently a desire to avoid the inflammation of ethnic tensions and the ostensible reversal of Potsdam conference policies; see Federation of Expellees.
Outstanding reprivatization issues can sometimes be a barrier to foreign investment, as investors are wary of investing in a property to which the title is disputed or faulty.
Reasons for reprivatization
Reprivatization can be initiated due to a desire: to reduce the number of state property to increase the size of the private sector in the country's economy to strengthen competition in various industries to increase the efficiency of the use of property as a source of improving the well-being of individuals and as a consequence of the country as a whole to eliminate the state monopoly in certain areas
Forms and types of reprivatization
There are two main forms of reprivatization: Restitution. In this case, the property is returned to the former private owner. Compensation. The value of the property is reimbursed through the provision of government securities or cash. In their pure form, both these forms are rare. Most often they are used at the same time, compensating for part of the costs in the form of reimbursement of funds, the rest is provided in kind. In addition, reprivatization can also be accompanied by compensation for material damage (lost profits, downtime). Requirements for reimbursement can be put forward both by the former owner and by the state itself: The owner can claim compensation for the amount of income that he could receive if his property was not nationalized. The state can claim for reimbursement of expenses incurred, as a rule, it may be expenses for modernization, maintenance of the relevant condition,
Reprivatization by country
Great Britain
Most often, when discussing reprivatization, it turns to the example of Margaret Thatcher. After becoming prime minister in 1979, she decided to handle the economic difficulties faced by the United Kingdom at the time by engaging in a campaign against the trade unions and changing the role of the state in the British economy. One of the ways to implement the plan was to choose reprivatization.
Large-scale reprivatization touched the oil, gas, electronic, aerospace and some other industries. Many enterprises that were in a difficult economic situation (including British Airways, British Petroleum), legally transferred to state ownership and received considerable financial support from it. And all this is only to be transferred to private hands through privatization ten years later.