The Estonian government has quicklyprivatized more than 90 percent of its industrial andmanufacturing enterprises. The Estonian privatization agencybatches 30-40 firms and advertises them for sale. The primegoal is to find "real owners" capable of running adurable, productive firm. Purchase offers are judged notonly on price, but also on the quality of business planssubmitted. In 17 sales, the Estonians have combinedstrategic investment with voucher exchanges. An unresolvedproblem is that the face value of the vouchers outstandingfar exceeds the likely value of assets being sold. This Noteconcludes that Estonian privatization has been a success inscope and pace. No private firm has yet failed, and theprivatization agency reports that most divested firms areexpanding their employment. However, these promising resultsare tempered by the fact that the 70 privatized firmsexperiencing problems with installment purchase payments areonly being admonished. But this problem, though significant,is not overwhelming.
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