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The Employee Ownership Update

Corey Rosen

July 31, 1995

(Corey Rosen)

Malaysia Joins Countries Looking at Employee Ownership

Malaysia, one of the world's fastest-growing economies, is now exploring employee ownership. Workers at its state-owned petroleum firm are being given the first shot at buying shares in the company, which is about to be privatized. Employees will be able to buy about $10,000 worth of stock, whose value analysts believe will at least double when the privatization is completed. In late August, about 40 Malaysian companies will attend a conference on employee ownership. The idea is being promoted as a way to attract and retain employees in an economy with a 2.3% unemployment rate.

First Federal Privatization Through Employee Ownership Slated

The Office of Personnel Management (OPM) has proposed privatizing its Investigation Service office by transferring the operation to employees. The 700-employee service does background checks for security purposes. The OPM has awarded a contract to study the proposal, which met some bipartisan opposition in Congress at recent hearings. Employees are also unenthused about being privatized, but OPM believes the move could save millions of dollars annually.

High-Ranking Chinese Delegation Examines Employee Ownership

A delegation of Chinese officials, including the director of the State Commission on Economic Restructuring and several directors of its provincial counterparts, recently completed a three-week tour of the U.S. that included several visits with employee ownership experts and companies.

The NCEO made one of these presentations. The officials indicated that employee ownership is one of the major options they are considering as their economy moves towards a more market-based approach. The largest enterprises in China are currently owned by the central government, but hundreds of thousands of other enterprises, including some very large ones, are owned by local governments. The central government plans to give its enterprises more freedom to make decisions and to sell a minority interest to investors, who could include the employees. Many locally owned enterprises will be sold, and employees could be one of the purchasers. China is not, however, pursuing complete privatization, as in Eastern Europe and the former Soviet Union.

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