State Owned Enterprises and Public Finances in Developing Countries: The Impact of Economic and Health-related Crises

Abstract

The Impact of Economic and Health-related Crises State-owned Enterprises (SOEs) are important actors in both developing and developed economies. This helpdesk report examines the scope, size and role of SoEs in developing countries, the impact (in terms of costs, profits, debts / contingent liabilities) of economic and health-related crises (including COVID-19) on state owned enterprises and public finances in developing countries. SOEs are often clustered in essential and strategic sectors. In many developing countries, SOEs play an important role in supplying basic services such as electricity, water, telecommunications, and other public utilities. After and during major crises, developing economies tend to resort to state intervention policies to achieve desired outcomes of public interest. Historically, SOEs have been called upon as producers and suppliers of emergency supplies. Some SOEs are themselves likely to face significant financial distress during the ongoing COVID-19 crisis, forcing governments to provide support.