State owned Enterprises Success Model

State Owned Enterprises or as they are known in some countries as Public Sector Enterprises are the backbone of a nation's economy. They fulfill the economic and social aspirations of the nation for the investments made by these companies into national infrastructure are huge and underwritten by the government. In many countries, they contribute to major share in economy like a quarter+ in China,India,Thailand and 38 percent in Vietnam. Nearly 47 percent of largest BRICS enterprises are State Owned Enterprises. 

A Private Enterprise looks for profit but when a PSU takes up a project, the output is social good. In China, State owed enterprises account for one fourth of the economy and dominate several industries like Energy, Aviation, Finance, Telecom and Transportation. Chinese government allows limited exposure to foreign companies in these sectors or in some sectors, the state owned enterprises have monopoly in those industries. The Holding company model of Temasek is the best example of Successful State Owned Enterprsies. 

In China, State owned enterprises account for forty percent of market capitalization of chinese companies and dominate the bond market. Govt.Bailouts were given to too big to fail systemically important private companies in the USA while same was given to big PSUs during recession. Majority of the state owned enterprises have recorded net profits despite the pandemic reducing the overall turnover. 

Temasek model has garnered continuous interest since Singapore Govt has provided a corporatized model in Temasek giving boards greater independence despite holding majority stakes in those companies. Temasek is the most successful sovereign wealth fund in the world. Temasek invested in companies globally. Temasek companies sucessfully competed with private sector companies and improved Performance proving that exposing companies to competition increases performance. 

Saudi Arabia government controls Saudi Aramco, operates Saudi Arabia Airlines. Many countries operate their own airlines like Italy, Cuba, Botswana, Venezuela, Abu Dhabi, Indonesia, Iraq, Malaysia, Sri Lanka,Thailand, Vietnam and Uganda. Canada privatized Air Canada in 1989, France privatized Air France in 2004, UK privatized British Airways in 1987, Japan Privatized Japan Airlines in 1987, Australia in 1992 while Mexico privatized Aero Mexico in 2007. India has privatized Air India by selling it for 18000 cr in 2021 to Tata Sons.