Growth takes place only when productivity from the existing resources keeps on rising. The global experience shows that by and large, productivity actually declines or remains stagnant when the businesses are managed and operated by the government thus slowing down or hurting the pace of growth. I will now turn to the economic rationale of privatization that is not fully understood by many.
The great unbundling We used to think that the greatest benefits of trade accrued to countries with market dominance in specific industries. Think of Switzerland and watches or France and wine. Historically, Canada exported what we had in abundance—raw materials such as fur, fish and timber—and imported manufactured goods. Of course, this is still the case for much of our trade.