Nationalization

Posted in Finance, Accounting and Economics Terms, Total Reads: 543
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Definition: Nationalization

Nationalization is defined as a process of an administration in here a government taking majority control of a company or an industry of some importance towards the countries resources, this can occur for numerous reasons. When nationalization occurs, the former (in this case a private individual or company) owners of the companies might not be remunerated for their loss in net worth and possible returns.

Nationalization is most common in developing nations which are subjected to regular leadership and government changes. In these cases, nationalization is a way for a ruling government to increase its economic resources and power.

The reverse of nationalization is known as privatization, when government-owned companies are spun off into the private business sector through disinvestment or PPP model.

The most recent example is the Nationalization of jobs in UAE where Asian expatriates constitutes a majority of the labor force in the region with its new ruling these jobs will shift to UAE’s citizens.

Other examples are as follows where the US government took over failing US companies such as GM and AIG which can also be called nationalization but US government exerts very little control over their daily operations.



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