Private Sector Participation (PSP) in Jordan's Water Sector

Diploma Thesis from the year 2005 in the subject Economics - Case Scenarios, grade: 2,3, University of Lüneburg, language: English, abstract: To privatise is to drive a two-horse cart. The cart is the enterprise in question. One horse is called Political Goals and is flighty and fickle; the other is called Economics, and is slow and steady. They have to pull the cart along the Road to Privatisation, which is a rough, boulder-strewn track. The cart is full of cases of vintage wine, which is unfortunate because the horses are pulling in different directions. The bottles of wine, which can be enjoyed only when the cart reaches its goals, are labelled ¿improved efficiency¿, ¿high sales price¿, ¿effective governance¿, ¿economic investment¿, and so on. Since the mid-1970s the idea of privatisation has been promoted and the elections of Margaret Thatcher as prime minister of Britain and Ronald Reagan as president of the United States, in 1979 and 1980 respectively, led to a huge privatisation movement in industrial countries. Although some developing countries engaged in privatisation activities during the early 1980s ¿ Chile was a front runner in this movement ¿ most of those countries did not implement privatisation as a tool of macroeconomic liberalisation before the late 1980s. Since then many experiences have been collected and led to different forms of private sector involvement. Privatisation, public-private-partnerships (PPP) and private-sector-participation (PSP) are common used expressions although the differences between them are very unclear. Nevertheless these approaches have become driving forces in international development strategies although the success is highly questionable. There seems to be a lack of knowledge on the benefits and risks of the private sector involvement in developing countries. Especially the effects in the water sector produced opposing results. The aim of this thesis is to analyse this ongoing debate and to discuss the results of the implementation of alternative private sector involvement approaches in the Jordanian water sector.