The Logic of Privatization: The Case of Telecommunications in the Southern Cone of Latin America

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The Logic of Privatization: The Case of Telecommunications in the Southern Cone of Latin America

By Walter T. Molano
Greenwood, 1997
138 pp. $55.00
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A timely analysis of four Latin American countries' attempts to sell their public telecommunications companies during the late 1980s and early 1990s. Chile's divestiture of the Chilean Telephone Company was implemented quietly and with little public opposition. In Brazil the privatization of Telebras never emerged from the preliminary debates. In Uruguay heated opposition emerged to the sale of Antel from unions and other interest groups, most powerfully pensioners, upset with the government's reform policies in other areas, and the measure was rejected in a public plebiscite. And in Argentina the legislature repudiated the first attempt at privatization of Entel but ratified a second attempt after the opposition, which had changed its attitude toward the policy, gained power. Molano concludes that the key to success or failure of privatization was not external but lay in the domestic political arena, principally in the political clout of the chief executive and his ability to act early in his administration. But he worries that the influx of foreign capital and new technology, if it should slow as it did in the middle part of the century, will provoke a new round of renationalizations.