![](http://press.cbnu.ac.kr/etimes/bbs/editor/uploaded/img/1227084491.jpg)
Public enterprise means an enterprise which is run with the purpose of providing goods and services produced by the capital. Privatization is when the public enterprise changes into a private one. It is explained by two aspects. One is that the enterprise¡¯s ownership is transferred from the government to the private. The other is that a public enterprise, which takes an exclusive position in the organization of the market, changes into a competitive one according to the market principles. Then, why does the government move the ownership of the public enterprise to the private?
The reason that the privatization plan was proposed is divided into internal and external factors. In the past, public enterprise has been scolded for political corruption and disutility. Bribery, appointment by order, and overpay, which belong to internal factors, are the problems which are proposed representatively. However, these problems have continued due to the weakness of the audit system, and social loss has increased by reckless management. Therefore, the privatization plan was requested as the solution to remove the reason of inefficient management and to reconstruct the economic system. Globalization and infinite competition are external factors that inevitably reform Korean public enterprises, too.
It is impossible to increase the national competitiveness while keeping inefficient and corrupt public enterprise. By the above reasons, the governments have recognized the necessity of privatization and carried out the policy.