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    (Wikipedia) - Nationalization Not to be confused with Naturalization. Economic systems
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    Nationalization (American English), (British and Commonwealth spelling nationalisation) 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. The opposite of nationalization is usually privatization or de-nationalization, but may also be municipalization. Industries that are usually subject to nationalization include transport, communications, energy, banking and natural resources.

    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.

    Nationalization was one of the major means advocated by reformist socialists for transitioning from capitalism to socialism. Socialist ideologies that favor nationalization are typically called state socialism. In this context, the goals of nationalization were to dispossess large capitalists and redirect the profits of industry to the public purse, as a precursor to the long-term goals of establishing worker-management and reorganizing production toward use.

    Nationalized industries, charged with operating in the public interest, may be under strong political and social pressures to give much more attention to externalities. They may be obliged to operate loss-making activities where it is judged that social benefits are greater than social costs — for example, rural postal and transport services. The government has recognized these social obligations and, in some cases, provides subsidies for such non-commercial operations.

    Since nationalized industries are state owned, the government is responsible for meeting any debts. The nationalized industries do not normally borrow from the domestic market other than for short-term borrowing. If they are profitable, the profit is often used to finance other state services, such as social programs and government research, which can help lower the tax burden.

    Nationalization may occur with or without compensation to the former owners. Nationalization is distinguished from property redistribution in that the government retains control of nationalized property. Some nationalizations take place when a government seizes property acquired illegally. For example, in 1945 the French government seized the car-makers Renault because its owners had collaborated with the Nazi occupiers of France.



    The traditional Western stance on compensation was expressed by United States Secretary of State Cordell Hull during the 1938 Mexican nationalization of the petroleum industry that compensation should be "prompt, effective and adequate." According to this view, the nationalizing state is obligated under international law to pay the deprived party the full value of the property taken.

    The opposing position has been taken mainly by developing countries, claiming that the question of compensation should be left entirely up to the sovereign state, in line with the Calvo Doctrine. Socialist states have held that no compensation is due, based on the view that the former owners acquired ownership through exploitation, or that private ownership over socialized assets is illegitimate and exploitative of employees.

    In 1962, the United Nations General Assembly adopted Resolution 1803, "Permanent Sovereignty over National Resources", which states that in the event of nationalization, the owner "shall be paid appropriate compensation in accordance with international law." In doing so, the UN rejected the traditional Calvo-doctrinist view and the Communist view. The term "appropriate compensation" represents a compromise between the traditional views, taking into account the need of developing countries to pursue reform even without the ability to pay full compensation, and the Western concern for protection of private property.

    In the United States, the Fifth Amendment requires just compensation if private property is taken for public use.

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    In the United Kingdom after the second world war, nationalization gained support by the Labour party and some social democratic parties throughout Europe.

    Notable nationalizations by country Argentina Australia Bolivia

    Most utilities were nationally owned before being privatized in 1994.

    Canada Channel Islands Chile Croatia

    On the break-up of Yugoslavia, The HDZ government nationalized private agricultural property and rezoned it under the guise of forest statesmanship, when their publicly professed agenda was to only complete the nationalization of the communists. Much of this land is in the process of being reinstated and the model rethought.


    The Castro government gradually expropriated all foreign-owned private companies after the Cuban Revolution of 1959. Most of these companies were owned by U.S. corporations and individuals. Bonds at 4.5% interest over twenty years were offered to U.S. companies, but the offer was rejected by U.S. ambassador Philip Bonsal, who requested the compensation up front. Only a minor amount, $1.3 million, was paid to U.S. interests before deteriorating relations ended all cooperation between the two governments. The United States established a registry of claims against the Cuban government, ultimately developing files on 5,911 specific companies. The Cuban government has refused to discuss the effective and adequate compensation of U.S. claims. The United States government continues to insist on compensation for U.S. companies. In 1966-68, the Castro government nationalized all remaining privately owned business entities in Cuba, down to the level of street vendors.

    Czechoslovakia Egypt France

    Nationalization dates back to the ''regies'' or state monopolies organized under the Ancien Régime, for example, the monopoly on tobacco sales. Communications companies France Telecom and La Poste are relics of the state postal and telecommunications monopolies.

    There was a major expansion of the nationalised sector following World War II. A second wave followed in 1982.

    The Paris regional transport operator, Regie Autonome des Transports Parisiens (RATP), can also be counted as a nationalised industry.


    The railways were nationalised after World War I. Partial privatisation of Deutsche Bahn is currently underway, as of 2008.

    Most enterprises in East Germany were nationalised following World War II. After reunification, an agency, Treuhand, was established to return them to private ownership. However, due to structural and economic problems inherent in the previous regime, many of these had to be liquidated.

    Greece Iceland India See also: List of companies nationalised in India

    The nationalised banks were credited by some, including Home minister P. Chidambaram, to have helped the Indian economy withstand the global financial crisis of 2007-2009.

    Iran Ireland

    Railways were nationalised in the 1940s as Coras Iompair Eireann.

    Israel Italy

    The regime of Benito Mussolini extended nationalisation, creating the Istituto per la Ricostruzione Industriale (IRI) as a State holding company for struggling firms, including the car maker Alfa Romeo. A parallel body, Ente Nazionale Idrocarburi (Eni) was set up to manage State oil and gas interests.

    Japan Lithuania

    In 2011 Snoras bank was nationalized.


    In 2008 Parex Bank was nationalized.

    Malta Mexico The Netherlands New Zealand Pakistan See also: Nationalization in Pakistan Philippines

    During the dictatorship of Ferdinand Marcos, important companies such as Philippine Long Distance Telephone Company (PLDT), Philippine Airlines, Meralco and the Manila Hotel were nationalized. Other companies were sometimes absorbed into these government-owned corporations, as well as other companies, such as National Power Corporation (Napocor) and the Philippine National Railways, which in their own right are monopolies (exceptions are Meralco and the Manila Hotel). Today, these companies have been reprivatized and some, such as PLDT and Philippine Airlines, have been de-monopolized. Others, like government-owned and controlled corporation Napocor, are in the process of privatization.

    Poland Portugal Romania Russia Saudi Arabia South Korea Soviet Union Spain Sri Lanka Sweden Tanzania

    The Arusha Declaration was proclaimed in 1967 by President Julius Nyerere, which aimed to achieve self-reliance through nationalising key sectors of the economy such as banks, large industries and plantations were therefore nationalised. This failed, worsening Tanzania''s economic problems until foreign aid and liberalisation took effect in the 1980s and 1990s.


    After the abolition of Capitulations of the Ottoman Empire by the Treaty of Lausanne (1923), foreign concessions were suppressed, rail transport, electric power generation and distribution, telephone network and other big industrial firms were nationalized by Turkish government between 1928 and 1940.

    United Kingdom

    Nationalization was a key feature of the first post World War II Labour government, from 1945 to 1951 under Clement Attlee. The coal and steel industries were just two of many industries or services to be nationalised, while the formation of the National Health Service in 1948 entitled everyone to free healthcare. The subsequent Conservative governments led by Winston Churchill, Anthony Eden, Harold Macmillan, Alec Douglas-Home and Edward Heath allowed practically all of the nationalized industries and services to remain in public ownership, as did subsequent Labour prime ministers Harold Wilson and James Callaghan. However, the election victory of Margaret Thatcher''s Conservatives in 1979 saw the vast majority of nationalized industries, services and utilities privatized within a decade. The Labour Party in opposition, led by Michael Foot and later Neil Kinnock, initially opposed privatization, but the party''s commitment to nationalization had been abandoned by the time it swept back into government with a landslide in the 1997 election under Tony Blair. However, in February 2008, Blair''s successor Gordon Brown nationalized the failing Northern Rock bank in the first stages of the credit crunch, which sparked a severe recession. The much larger Royal Bank of Scotland and Halifax Bank of Scotland were part nationalized for the same reason in October of that year. After nearly four years in public ownership, Northern Rock was sold to Virgin Money and Royal Bank of Scotland agreed a branch sale to the Santander Group in November 2011. However, Royal Bank of Scotland and Lloyds remain in public ownership five years later and in November 2012 the Public Accounts Committee warned that it could be many years before the banks are sold and the £66 billion so far invested in these banks may never be recovered.

    British assets nationalised by other countries United States Venezuela Vietnam Zimbabwe Other countries

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