For the first time since 1994, global privatisation activity recorded a sharp decline in 1998. Proceeds dropped by 26 per cent to around US$114.5 billion, from an all time high of US$153.8 billion in 1997. As in previous years the bulk of privatisation revenues were generated in OECD countries, some US$86 billion or around 75 per cent of global privatisation revenues. Most of the activity took place among the European members of OECD.

Privatisation activity in non-OECD countries, still robust in 1997, was drastically reduced as the financial crisis in Asia and Russia reduced cross border investment and shook investor confidence. Proceeds were almost halved to US$28.5 billion, reducing non-OECD share of activity to about a quarter of total. Only Brazil showed significant activity with its telecom privatisation in the second half of 1998.

Public offerings continued to be the dominant method of selling publicly owned enterprises in OECD countries; close to two thirds of privatisations were carried out using this method. By contrast, almost two thirds of non-OECD privatisation proceeds were generated through trade sales to strategic investors.