Nationalization

Nationalization or nationalisation (국유화/國有化) is the process of taking a private industry or private assets into public ownership by a national government or state.

Nationalization usually refers to private assets, but may also mean assets owned by lower levels of government, such as municipalities, being transferred to be the state. Industries that are usually subject to nationalization include transport, communications, energy, banking and natural resources.

Key words
nationalization, de-nationalization, renationalization, privatization, municipalization, transition

History
After the World War II, the Western world saw a big wave of nationalization. For example, the United Kingdom nationalized its coal and steel industries to correct the market failure. In France, the nationalization of major industries and financial institutions was carried out for the restructuring of key industries.

On the contrary, motivated by the resources nationalism, oil producing countries nationalized the oil wells or refineries owned by forein capitals. In this context, in July 1956, Egypt declared the nationalization of the Suez Canal occupied by the United Kingdom.

Strategy
Nationalization has been usually pursued to relocate key industries from the private capital to the government control by a political cause. In the United Kingdom and France, the nationalization was conducted by the parliamentary legislation subject to fair and appropriate compensation.

After the World War II, the Eastern world and developing countries were reluctant to compensate the private owners at home and foreign investors. In most cases, such nationalization resulted in loss of creativity, reduced productivity and economic inefficiency. In the long run, the nationalized economies could not avoid collapse in the midst of globalization.

Similar or opposite concepts
Renationalization occurs when state-owned assets are privatized and later nationalized again, often when a different political party or faction is in power. A renationalization process may also be called reverse privatization. Nationalization has been used to refer to either direct state-ownership and management of an enterprise or to a government acquiring a large controlling share of a nominally private, publicly listed corporation.

De-nationalization or minicipalization
The opposite of nationalization is usually "privatization" (사유화/私有化) or "de-nationalization" (민영화/民營化), but may also be "municipalization" (공영화/公營化).

Traditionally in Korea, railway transportation, telecommunication, energy and natural resources used to belong to the state ownership. As the economic development goes on, a large part of those key industries have been de-nationalized. However, their ownership or management are largely under the government control. Recently the government's plan to partly privatize power generation, railway transportation, hospitals, etc. were at issue triggering the opposition of interest groups. Take an example of electricity industry restructuring in accordance with the Act to Accelerate Restructuring Electricity Industry (전력산업구조개편촉진에 관한 법률). In April 2001, the power generation business of the state-run Korea Electric Power Corporation (KEPCO) was, against the fierce opposition of the trade union and anti-privatization groups, split into Korea Hydro & Nuclear Power Co. Ltd. (KHNP, 한국수력원자력/韓國水力原子力) and the geographically divided six power companies.

In December 2013, 6500 union workers of Korea Railway Corporation (Korail) staged the 22-day strike in protest of Korail's decision to introduce a separate operator of a new KTX bullet train service. The Korail union argued that the move was a step toward privatizing the public company, though Korail and the government denied those accusations.

Privatization
Privatization, or privatisation, has several meanings.

Primarily, it is the process of transferring ownership of a business, enterprise, agency, public service or public property from the public sector (a government) to the private sector, either to a business that operates for a profit or to a nonprofit organization. It is followed by the transition of legal systems and governance style, e.g., from the planned economy to the market economy, as witnessed in the Eastern and Central Europe in the early 1990s. There are two types of transition - "Big Bang" therapy or "Gradual approach".

It may also mean government outsourcing of services or functions to private firms, e.g. revenue collection, law enforcement, and prison management.

Privatization has also been used to describe two unrelated transactions. The first is the buying of all outstanding shares of a publicly traded company by a single entity, making the company privately owned. This is often described as private equity.

The second is a demutualization of a mutual organization or cooperative to form a joint-stock company.