Columbia Journal of World Business student essay award winner - Privatization in East Germany: The delivery of an economy

Soon after the re-unification of East and West Germany, the West German government chose to swiftly privatize the businesses of its former neighbor. To oversee this process, the government set up an independent agency, the Treuhandanstalt, which did its work from July 1990 to December 1994. In that time, thousands of businesses were converted to private ownership, and jobs were secured for 1.5 million employees. The efficacy of the project, its successes and failures, and how applicable the German model may be for other governments seeking a complete privatization of their countries' assets are discussed. That the Treuhand did not invest enough money or effort into the rebuilding of the businesses was a criticism of the basic philosophy of the Treuhand. The economy of Eastern Germany is in a prosperous state, with 1994 growth of 9%. GNP has returned to 1990 levels.