This paper analyses economic reforms in promoting the private sector in economies in transition and least developed countries, where their privatization policies and related issues are examined. The recent economic development, environment and the impact of institutions and market structures on privatization outcomes are analysed. Legal issues for promoting privatization are discussed. The linkage between SMEs and large enterprises is emphasized for higher productivity and expanded market access. The transfer of technology is inevitable for promoting competitiveness within the private sector. Skills development for local experts is needed to attract foreign investments. Problems and hurdles in making privatization a success are identified.