A State Invested Enterprise (SIE) is a company or organisation that is wholly or partially owned and controlled by a government entity. SIEs are typically created to fulfill strategic objectives of the government, which can include promoting social welfare, achieving economic development, and pursuing national security interests. SIEs are often involved in key strategic sectors such as energy, telecommunications, transportation, and banking.
The level of government ownership in SIEs can vary from country to country. Some SIEs are wholly owned by the government, while others are only partially owned, with the remainder of the ownership held by private investors. In some cases, SIEs are created as a result of privatisation, where the government sells part or all of its ownership stake in a formerly state-owned enterprise to private investors.
The role of SIEs in the economy varies by country and can have both positive and negative impacts. Some of the benefits of SIEs include their ability to provide stability in key sectors, promote economic development, and generate revenue for the government. SIEs can also be used to pursue national security objectives, such as in the case of defense contractors. However, SIEs can also be subject to political influence, leading to inefficiencies, corruption, and reduced competitiveness. In some cases, SIEs can also crowd out private investment and hinder competition.
In summary, State Invested Enterprises are companies or organisations owned and controlled by a government entity. Their role in the economy varies by country and can have both positive and negative impacts. While SIEs can be beneficial for promoting social welfare, achieving economic development, and pursuing national security interests, they can also be subject to political influence, inefficiencies, and reduced competitiveness.