Introduction to Public Enterprise

The International Centre of Public Enterprises (ICPE)1 defines public enterprises as:
“Any commercial, financial, industrial, agricultural or promotional undertaking – owned by
public authority, either wholly or through majority shareholding – which is engaged in the
sale of goods and services and whose affairs are capable of being recorded in balance
sheets and profit and loss accounts. Such undertakings may have diverse legal and
corporate forms, such as departmental undertakings, public corporations, statutory
agencies, established by Acts of Parliament or Joint Stock Companies registered under
the Company Law (Basu, 2005, p. 3).”
Based on this definition, public corporations are entities which undertake commercial activities
like private firms, but are owned and/or run by the government. However, this definition does not
quite give justice to the theoretical complications presented by the concept of public enterprises.
Mendoza (1990) elaborates more on the classical, dualistic definition of public enterprises by
elaborating on the public and enterprise dimensions. Citing Fernandes and Sicherl (1981),
Mendoza explains that the public dimension of the nature of state-owned enterprises consists of
their embodiment of public interest, public ownership, public control, public management, and
public accountability. Their enterprise dimension meanwhile involves their organization, their
decision-making identity, their provision of goods and services, the marketing factor, the presence
of investments and returns, and the presence of a commercial accounting system which lends
itself to economic calculation.
Theoretically then, public enterprises constitute an overlap between private firms and public
bureaucracies. On one hand public enterprises9 assets are similar to bureaucracies in that they
are organs of the state, they take at least part of their income from state subsidies, and their
employees are civil servants. Distinguishing them pure bureaucracies are their participation in
commercial activities which involve the pursuit of income and revenues and which are typically
undertaken by private firms, and the autonomy which their organizational theoretically provides
them.
There are several rationales for the establishment of public enterprises:
First governments may deem it necessary to establish public enterprises in order to introduce
economic activities that the private sector is either unwilling or unable to undertake. Industries
involving high upstart cost, and long-term capital investments may be desirable for economic
development and the state’s interest, but may not be within the capabilities or the interest of the
private sector to establish. In such cases the government may sometimes take it upon itself to
make the necessary investments to establish the industry win the country9s economy.
Second, public enterprises may be established in pursuit of national and social interests. This is
typically the case with regard to strategic industries within national economies such as electrical
generation, defense, banking, etc. In the case of nationalization, the government wishes to exert
national sovereignty over particular industries and avoid domination by foreign firms. In fact, in
the Philippines early forays into public enterprises were intended to increase Filipino control over
the domestic economy (Corpuz, 1994). Public enterprise may also be established to check the
power of private firms involved in the commanding heights of a national economy (Shepherd,
1991).
Third, there may be a need to provide of public goods and services that would be best undertaken
by the government, either because the private sector does not provide a sufficient supply
(Shepherd, 1991) or because their nature means that it would be more efficient if they were
provided by the state (such as in the case of natural monopolies).
Fourth, governments may set up public enterprises as a means of generating revenues through
their commercial functions. Because of their proprietary objectives public enterprises are usually
expected to be financially independent and viable enough to fund their own activities, or even
able to contribute to the national coffers. Public enterprises can therefore be used to provide the
state with an alternate source of steady revenue besides traditional taxation.
Lastly, there are those public enterprises that arise out of the government efforts the save “sick”
units (Gouri, et. al, 1991). Private companies that are deemed either politically or economically
important may be nationalized by the government in order to prevent them from shutting down.
An example of which is General Motors (GM) in which majority ownership was acquired by the
United States government in 2009 in order to prevent the company from going bankrupt.
With the exception of the nationalization of “sick” companies, the adoption of the public enterprise
form of organization typically involves the perception that creating a state entity infused with the
entrepreneurial nature of a private firm will lead to better outcomes than what would occur with a
traditional bureaucracy.
The autonomy of public enterprises is perceived to allow for greater flexibility in the
implementation of policy as well as being conducive to greater initiative on the part of the public
enterprise’s managers. The hybrid nature of public enterprises is also perceived to be more
accountable to the public than normal private firms, due to their being subject to various state
controls and regulations.
Evolution of Public Enterprise
The public enterprises came into existence as a result of the expanding scope of public
administration. The advent of the concept of welfare state after the Second World War and the
increasing developmental initiative undertaken by Government across the world, the system of
public enterprises was developed. The government sells goods and services to the common
people through the means of a state-owned enterprise system which incorporates the
characteristics of both public and private enterprises. For e.g. the metro train facility for commuting
in big cities, developed, managed and run by the government.
The government operates in the areas which are of basic or strategic importance and also the
areas that require huge investments beyond the scope of private enterprises. The public
enterprises in the Philippines have been on a steady rise since their inception and have engaged
themselves in a number of economic activities like advancing loans, regulating trade and
commerce, heavy machine manufacturing, gaming, state universities and local colleges and
fertilizers, oil drilling etc. In the Philippines, public enterprises which are engaged in myriad of
economic and developmental activities in the country, e.g. PCSO, PAGCOR, GSIS, SSS
PhilHealth, PAG-IBIG and etc.
The state-owned enterprises play an important political, economic and developmental role in their
respective countries. The growth of public enterprises also has its roots in the colonial pasts of
the countries of Asia and Africa. The Government sector, the public administration and ultimately
the public enterprises in these countries have been greatly influenced by the colonial powers that
ruled them. India is a good example of this trend where even today the Railways are the biggest
example of a successful public enterprise. Even the countries with no colonial history like Iran and
Turkey, the public enterprise was used a tool to bring about economic, political and social
changes, particularly in Turkey after the demise of the Ottoman Empire and formation of the
modern Turkey.
The history of public enterprises in the USA dates back in the nineteenth century and was
characterized by the state-chartered banks in which the Federal Government has significant
portion of the stocks. The formation of the Panama Railroad Company in 1904 was another victory
of the public enterprise system. The growth of public administration and enterprises reached its
peak under Franklin D Roosevelt and the Tennessee Valley Authority became the most emulated
model of public corporation.
There are several factors that have contributed the growth of public enterprises in the recent
times. The governments have used it to guide and command the economy; they own the strategic
industries, functions and agriculture and also try to fill the inadequacies of the private sector.
Public enterprises are also essential in bringing about national development. They are also used
as political instrument to maintain political stability, prevent unrest and provide employment.
Public enterprises have also helped the earlier colonized and now developing economies of the
world to decrease their dependency on other nations and become self-sufficient. Monopoly,
freedom to choose profitable projects; no taxes etc are other factors that have led to their growth.
Working Concepts of Public Enterprise
In the Philippine setting, public corporations have been called many names: government
corporation, public corporation, public enterprise, state-owned enterprise, parastatal corporation,
The official nomenclature is "Government Owned or Controlled Corporations" (GOCCs) as stated
in the 1973 Constitution. This is the 'term used in the study. The international term is "public
enterprise."
Likewise, the definitions differ. An effort was made by the Expert Group Meeting convened by the
International Center for Public Enterprise ~ICPE) in Tangiers in 1981 to come up with
internationally accepted definition of "public enterprise." The final definition described public
enterprise as an organization which

• is owned by public authorities including central state or local authorities, to the extent of
50 percent or more;
• is under the top managerial control of the owning public authorities, such public control
including, inter alia, the right to appoint top management and to formulate critical policy
decisions;
• is established for the achievement of a defined set of public purposes, which may be multi-
dimensional in character and is consequently placed under a system of public
accountability;
• engages in activities of a business character;
• involves the basic idea of investment and returns; and
• markets its outputs in the shape of goods and services.
The various government monitoring agencies have their own definitions, lists and statistics on the
GOCCs. In 1984, another exercise at definition was 'initiated by an ad hoc committee created by
the Cabinet, which was composed of the Minister of Justice, the Chairman of the Commission on
Audit, and the Chairman of the Presidential Commission on Reorganization. The Committee's
definition which is used in this paper is:
“A government-owned or controlled corporation is a stock or non-stock corporation,
whether performing governmental or proprietary functions, which is directly chartered by
special law or, if organized under the. general corporation law, is owned or controlled by
the government directly, or indirectly through apparent corporation or subsidiary
corporation, to the extent of at least a majority of its outstanding capital stock or of its
outstanding voting capital stock.”
There is general agreement and acceptance of this definition to date. On the other hand, concepts
of development are just as many and varied. Ideas of development have evolved from the original
focus on economic development to what Todaro describes as a "multidimensional process
involving major changes in social structures, popular attitudes, and national institutions, as well
as the acceleration of economic growth, the reduction of inequality and of absolute poverty.
Development represents the entire gamut of change by which an entire social system tuned to
the divers the basic needs and desires of individuals and social groups within that system, moves
away from a condition of life perceived as unsatisfactory towards a situation or condition of life
regarded as materially and spiritually better. "Todaro continues with three objectives of
development:
1. To increase the availability and widen the distribution of basic life- sustaining, goods such
as food, shelter, health and protection;
2. To raise levels of living including, in addition to higher incomes, the provision of more jobs,
better education and greater attention to cultural and humanistic values, all of which will
serve not only to enhance material well-being but also to generate greater individual and
national self-esteem; and,
3. To expand the range of economic and social choice to individuals and nations. by freeing
them-from servitude and dependence, not only in relation to other people and nation-
states" but also to the forces of ignorance and human misery
The above concepts are echoed in the Philippines' major national development goals ·which are
contained in the Philippine Development Plan, namely, sustained economic growth, more
equitable distribution of the fruits of development, and total human development; The principal
targets of the plan are the common tao, the farmers, the fixed-income earners and other low-
income groups most vulnerable to economic and social difficulties.
Given these concepts, the role of the GOCCs should be examined in relation to their contributions
toward sustainable economic growth, equitable distribution of wealth and total human
development especially of the common tao. This role can be examined from three different levels.
The first is at the theoretical level which discusses the ideal type of public corporation and the
basic ideas governing public corporate activity under different economic and social conditions.
The second level is at the normative level which analyzes the set of norms with respect to the role
and position of public enterprise. The third level focuses on what is the achieved role, position
and impact of public corporations. This study examines the role of public corporations using the
normative approach. The problems and issues which affect the actual performance of the role of
public corporations are likewise examined.
Public Vs Private Enterprise
The expansion of public sector into industrial enterprises has been into practice for quite some
time, a little over half a century now. The public sector organizations in order to function efficiently
are borrowing heavily from the business knowledge, administration and process orientation of the
private organizations. However, there still remains a considerable difference between these two
administrative practices.
It would be interesting to learn about both similarities and differences between these two to arrive
at a better understanding. Let us first understand the differences and see what the authors and
subject matter experts have to say about it.
According to Paul H. Appleby the public administration is different from private administration in
three important aspects, the first is the political character, secondly the breadth of scope, impact
and consideration and public accountability. These differences seem very fundamental and very
valid in the light of our own exploration of the subject in previous articles.
Josia Stamp went a step further and identified four aspects of difference of which the only one
similar to that of Appleby9s is that of public accountability or public responsibility as Stamp
identifies it. The other three are: Principle of uniformity Principle of external financial control
Principle of service motive.
Herbert Simon cited very practical and easy to understand differences based on popular beliefs
and imagination and therefore might seem more appealing. He said that public administration is
bureaucratic while private administration is business like. Public administration is political while
private administration is apolitical. And finally; the aspect most of us would swear by that public
administration is characterized by red tape while the private administration is free of it.
The management Guru Peter Drucker sums up the difference in more comprehensive manner.
He says that the very intuition which governs both kinds of administration is different from each
other. While the public administration functions on service intuition the private administration
follows the business intuition. They also have different purposes to serve, with different needs,
values and objectives. Both of them make different kind of contribution to the society as well. The
way the performance and results are measured is different in a public administration than that of
private one.
Let us now understand the similarities between the two and see to what extent and in which areas
are they similar. You would be surprised to know that there are many similarities between the
ways in which a public and a private administration function. The similarities are so much
that some subject matter experts and authors like Henry Fayol, M P Follet, Lyndall Urvick do not
treat them as different. Fayol said that all kinds of administration function on some general
principle irrespective of them being public or private. The planning, organizing, commanding and
controlling are similar for all administrations.
The above arguments and several other points suggested and illustrated by other authors as well
clearly point out that there are more similarities between the two administrations than what we
see and understand.

• The managerial aspects of planning, organizing, coordinating and controlling are the same
for public and private administration
 • The accounting aspects like maintenance of accounts, filing, statistics and stocking are
the same
• Both of them have a hierarchical chain of command or reporting as the organizational
structure
• Both get influenced, adopt and reform their own practices in the light of best practices of
the other. They also share the same pool of manpower
• And lastly, they share similar kinds of personnel and financial problems
The Changing Role of GOCCs in the Philippine Landscape
The extent of the role that GOCCs play in national development is influenced by many factors,
the most important of which are the legal and policy framework, the "development" impetus, the
political economy of the country and political change, and the motives and rationale for
establishing a GOCC.
The state may, in the interest of national welfare or defense, establish and operate
industries and means of transportation and communication, and, upon payment of just
compensation, transfer to public ownership utilities and other private enterprises to be
operated by the government.
The immediate impression that one gets from the provision is that the Constitution intended a
limited 'role for GOCCs, in consonance with the avowed private enterprise orientation of the
country. Nevertheless, this legal provision has at various times in Philippine history been
interpreted either literally or liberally, depending on "the exigencies of the times" and "in the
interest of national welfare." General policy declarations of various Presidents have been fairly
consistent with the Constitution. However, these have not gone beyond generalities and
rhetoric9s, thus giving the government wide latitude, or even license in the actual creation of
GOCCs.
The development impetus. The dramatic proliferation of GOCCs coincided with the aggressive
push towards development." GOCCs were utilized as a major tool for the attainment of
development goals, as indicated by the huge magnitude of government investment in the sector.
This phenomenon is not exclusive to the Philippines.
Political economy, political change and the nature of the state: Undoubtedly, the aggressive
development thrust of the country significantly contributed to the: expansion of the government
corporate sector. However, scholars studying the public enterprise phenomenon in many less
developed countries (LDCs) have repeatedly underscored the need to examine the political
economy of and the distribution of power in a country. There have been pronounced shifts in the
role and importance of public corporations following an important change in a country's political
condition, as in the case of Algeria, Tanzania, Bangladesh, Somalia and Peru. A similar pattern is
observed in the Philippine GOCCs. The Martial Law period which facilitated the consolidation of
legislative, executive and judicial powers in the hands of the President resulted to the increase of
GOCCs. A full two-thirds or 61 of 93 enterprises listed by the Cabinet Working Group were created
by presidential action, either by presidential decree, executive order, letter of instruction, or letter
of implementation.
Muzzafer Ahmad points out that: Contrary to the economists' assumptions, public enterprises
come into being not only because of market failure but also because of socio-political exigency
and interest group activity. It makes more sense to think of interactive systems in which social
forces, political power and economic policy are related. State policies reflect the efforts of
contending social forces, to promote use of resources in a manner that benefits the controlling
social class. In developing countries, authority is represented very strongly in the state and the
government because other institutions of modernization and mobilization are weak. Hence, the
dominant social force is also dominant in government, and this allows the utilization of public
enterprise for consolidation of its power.
Local scholars have likewise observed that "those entities have only become a venue to enhance
local and foreign monopolistic interests. Public enterprises have contributed to the entrenchment
of private capitalistic interest by the formulation of policies to protect them and by the privatization
of resources that were drawn from the people's pocket.?" In other words, in countries where
effective political and economic power is consolidated in a small group, excessive state power
can be wielded to transfer public resources to the "ruling elite" through public corporations.
Motives and rationale for establishing a GOCC, Leroy Jones classified the motives for establishing
public enterprises into ideological and pragmatic motives. Ideological motives include ideological
predilection and acquisition or consolidation of economic and political power. Pragmatic motives
include historical heritage and inertia, institutional responses to economic problems,
developmental objectives and others, "Pavle Sicherle writes about general motives and specific
motives. Motives of a general nature are those which cut across economic sectors or economic
characteristics of enterprises, e.g, the political goal of a socialist society, sovereignty over national
resources (partial or complete nationalization of foreign enterprises), more equitable distribution
(among regions, ethnic, social and economic groups), defense (defense industry, strategic
location). Specific motives are related to specific sectors, characteristics or cases like filling the
gaps left by the private sector, breaking monopoly situations in certain branches, taking direct
control over individual strategic sectors, or developing infrastructure and research activities.
Off hand, the Philippine experience tends to indicate that the government was impelled by
pragmatic considerations rather than ideological motives in creating GOCCs. These would include
sovereignty over national interest and phrase, "development." However, such glorious and lofty
motives present only part of the picture. Rather, these could be viewed in terms of overt and covert
motives. Overt motives would refer to the legal justification and the official objectives of the
GOCCs. These are similar to the official rationale adopted by countries all over the world. Covert
motives would be unstated objectives which never the less are just as compelling.
A covert objective would be the desire to get away from government regulation. GOCCs have the
relative advantage of flexibility and autonomy and a certain degree of "differential treatment" with
regards to. rules and regulations. This is exemplified by the level of compensation which is the
most attractive feature of the GOCC. It is a long-standing joke that the elevator boys of financial
institutions earn much higher salaries than the public school teachers. Thus, even agencies
performing regular functions endlessly exert efforts to have themselves converted into GOCCs. If
this is not legally feasible even with political support, these agencies happily go ahead and create
their own GOCCs or subsidiaries. These corporations perform "laundry services" wherein
contracts and additional compensation packages are processed beyond the pale of close scrutiny
that ministries are normally subjected to. This is illustrated by the following cases. The largest
government ministry had its own development bank chaired by no less than its top official.
Fortunately, this bank went bankrupt and had to be reorganized. A ministry overseeing a strategic
industry is administered, under a management contract, by the subsidiary of the very GOCC it is
supervising. This ministry has only one employee: the minister. All others are considered
"employees" of this subsidiary corporation which pays them higher rates of salaries. Another very
large ministry incorporated its own printing press services. Still another converted its Electronic
Data Processing (EDP) unit in to a corporation. A leading and highly respected office in the
government regularly gives research grants to a GOCC in order to launder additional
compensation for its staff. If a brave soul will make a survey of the leading ministries, he might
discover that most of them have their very own "laundry units" disguised as GOCCs with a noble-
sounding objective of development.
Another covert and even more alarming motive which emerges is the use of GOCCs to transfer
public resources to a private few. One scholar describes it succinctly:
There is a narrow line here between the legitimate and the illegitimate. A major function of
government is to transfer income from one group to another. The difficulty with public
enterprises is that the transfers can be so readily hidden from those who pay the freight in
terms of increased taxes, higher inflation, or lower government expenditures on health,
education, or welfare.
This phenomenon is discussed in the case of the coconut industry, the sugar industry and the
National Development Corporation (NDC). These cases showed that one painless approach to
transfer resources is for financial institutions to lend huge loans. to especially favored private
sector individuals. Thus, criteria for the granting of loans may not necessarily be on the basis of
financial viability but of political access. Another is for government officials who sit in the boards
of directors of GaCCs to set up private corporations which either have, contracts with the GaCC
or borrow massive amounts from the latter. Lamberte, for example, considers the issue of "political
consideration" as weighing more heavily than viability in deciding which projects to initiate. Still
another is for private sector tycoons to control GaCCs by sitting in the boards of directors and
using their positions as leverage to transfer resources. ather scholars have gone even farther by
pointing out not only the intimate intermeshing of interests between GaCCs and powerful private
groups, but also the tie-ups of the latter with transnational corporations (TNCs).
Corollary to the matter of overt or covert motives is the issue of which of these two types of motives
is dominant. If covert motives, particularly the transfer of resources to private groups, are
considered as more dominant, then the original roles of GacCs are subverted. A situation arises
where GaCCs would serve private purposes and not public purposes. The powerful few would
benefit from the combined resources of the many an aberration of the goals of development. At
worse, foreign domination of key sectors of the economy would been couraged, resulting in a
horrible mutation of one of the fundamental motives for setting up GaCCs which is Filipino control
of natural resources.
The Growth of GOCCs
The growth of the GaCC sector is traced through the various periods of Philippine history. As will
be noted, the role of GaCCs has changed in response to the factors identified in the preceding
section.
The GOCCs before political independence. Available documents indicate that the pre-war
governments scrupulously limited the role of GaCCs to a few sectors, e.g., financing, public
utilities and agricultural development. GaCCs created during the American colonial period were
engaged in public transportation and financing, e.g., the Manila Rail road Company (MRC) and
the Philippine National Bank (PNB). The report of the last American Governor General noted
profitable returns from the GaCCs then existing, with the exception of MRC which suffered losses
in the tradition of all railway companies.
The Commonwealth period saw the expansion of the role of GaCCs to agricultural development.
The PNB played an important role in the mobilization of capital for agricultural activities,
particularly sugar. Since agriculture dominated economic activity during this period, the GaCCs
created were specifically for agriculture and trading, e.g., National Rice and Corn Corporation
(1936), National Abaca and other Fibers Corporation(1938), National Coconut Corporation
(1940), and the National Trading Corporation (1940).
At this point, a single financial institution was found inadequate, especially since PNB catered
almost exclusively to the sugar industry. The Agricultural and Industrial Bank which was absorbed
later by the Rehabilitation Finance Corporation (RFC), now Development Bank of the Philippines
(DBP), was thus established in 1938.
With the outbreak of World War II, a GOCC was created with duties unique to the crisis at that
time. The Emergency Control Administration was created in December 1941 to execute all
government welfare policies and programs as a consequence of the war effort.
The Post-War Period. The period immediately following the war years has been described as the
reconstruction period. "Relief and rehabilitation" was the by-word of that era. During this period,
there was a significant spurt in the growth of the GOCC sector. There were about thirty GOCCs
created from 1945 to 1950. The RFC replaced the Agricultural and Industrial Bank to provide
financial assistance to destroyed business establishments. GOCC expansion notwithstanding,
the activities of the sector still adhered to the "traditional" areas for GOCCs. Thus, a number of
them were in public utility/infrastructure, e.g., Manila Railroad Company (MRC), Metropolitan
Water District (MWD), National Power Corporation (NPC). A few were in agricultural production
and trading, e.g., National Tobacco Corporation and National Food Products Corporation. The
rest were in financing, e.g., PNB, RFC, Agricultural Credit and Cooperative Administration (ACCA)
and the Government Service Insurance System (GSIS). At this time, regulatory GOCCs were
setup ,e.g., the National Land Settlement Corporation and the Rural Progress Administration.
While the number of GOCCs expanded during the post-war period, their role did not change
substantially. Nonetheless, their impact and participation in the economy increased because of
the significant increase in their actual number, size and resources. Consequently, alarm was
expressed over their proliferation and duplication of activities, e.g., two GOCCs for tobacco,
several in agricultural credit and a growing group of GOCCs in housing. When the Government
was reorganized in 1950, a reorganization committee was created specifically for GOCCs.
The Committee recommended reduction of the GOCC sector to 13. Nevertheless, the push
towards expansion was irresistible because of the obvious advantages of the corporation
structure for carrying out governmental functions. GOCCs became a major arena for the
consolidation of economic and political power by various political leaderships. As of 1956, total
assets of all government corporations amounted to more than 1 billion pesos. By 1967, when the
rounds of government reorganization activities were initiated, the number had again gone up to
44.
The Martial Law Period and the 1980s.The Martial Law period ushered in dramatic political
changes for the Philippines which impacted heavily on the GaCC sector. The consolidation of
effective political and economic power, combined with the tremendous push toward development,
and the interplay of overt and covert motives resulted in the unprecedented growth of GACCs.
Massive flows of loans and other forms of financing from private banks and the international
financing institutions further encouraged·the expansion of GaCcs. Given this momentum, GaCCs
proliferated rapidly. From a total of 65, consisting of 47parentcorporationsand 18 subsidiaries in
1970, their number rose to an unprecedented 303 corporations composed of 93 parent
corporations, 153 subsidiaries and 57 acquired assets.
During the Martial Law period and the early 1980s, the GaCC grew not only in number, size and
resources but also in political clout. A high- ranking government official has raised this query: “Are
government- owned and controlled corporations still controlled by the government or is the
government controlled by government-owned and controlled corporations? Another way of
expressing this query is:' Have the, government-owned and controlled corporations gone out of
control? If the roles of the GaCCs were assessed during this period, the government corporate
sector practically took over the government system.
As vanguards of the develop merit crusade, they entered nearly all fields of government activity,
and sometimes, even beyond. Aside from expanding to un-paralleled levels in traditional activities
like financing, agricultural production, public utilities/ infrastructure, manufacturing and industry,
GaCCs were preoccupied with raising cocks, breeding horses, managing gambling casinos,
canning sardines, producing tomatoes, making handicrafts, selling plants and performing the
ubiquitous laundry services mentioned earlier. To balance their activities, they also dabbled in
culture, cinema, hospitals, and convention centers. One corporation was even created by leading
financial institutions to look into the meaning of life.
The role of the corporate sector in development was so all encompassing that when the economic
crisis hit the country, they were the'hardest hit. No less than Prime Minister Cesar Virata admitted
that "the government corporate sector had laid claim in recent years to up to one-fifth of the annual
government budget, about a third of the outstanding domestic public debt, and about three-fourths
of the outstanding external public debt.