Chapter News

State-Owned Enterprises in the Time of COVID-19

May 7, 2020 |

The pandemic has highlighted the role of the public sector in saving lives and livelihoods. State-owned enterprises are part of that effort. They can be public utilities that provide essential services. Or public banks that provide loans to small businesses. But some are also struggling and adding to the burden on government finances. These range from national oil companies that are dealing with a large fall in oil prices, to national airlines without enough passengers traveling.

Most people encounter state-owned enterprises every day. They are likely to provide the water you drink, the electricity you use, and the bus or metro you ride to work or school. They come in all shapes and sizes. Some are fully owned by the government and some are jointly owned with private investors.

State-owned enterprises’ assets are worth $45 trillion, equivalent to half of global GDP.

Our new Fiscal Monitor delves into this other government. How have state-owned enterprises evolved in recent decades? How can countries get the most out of them? At their best, they can help countries achieve economic and social goals. At their worst, they need large bailouts from taxpayers and hinder economic growth. Which version you get boils down to good governance and accountability.

Big and complicated

State-owned enterprises are present in all countries. In some, like China, Germany, India, and Russia, they number in the thousands.

They are major players in many economies. For example, state-owned enterprises undertake 55 percent of total infrastructure investment in emerging and developing economies.

Some are also multinationals, operating around the world. The share of state-owned enterprises among the world’s 2000 largest firms doubled to 20 percent over the last two decades, driven by state-owned enterprises in emerging markets—their assets are worth $45 trillion, equivalent to half of global GDP.




Vitor GasparPaulo Medas, and John Ralyea

Compliments of the IMF.