Freeing up services: Delayed, not canceled<\/p>\n
Yanuar Nugroho, Director, The Business Watch Indonesia,
\nSurakarta, yanuar-n@unisosdem.org<\/p>\n
Rejoicing and lamentation greeted the collapse of the world
\ntrade talks in Cancun last week. Those who lamented represented
\nthe developed countries, which have had their pursuit of profit
\nslowed down. Those celebrating included representatives of
\ndeveloping countries, which prematurely thought that it was a
\nvictory of the poor world against large corporations.<\/p>\n
The deadlock at the fifth Ministerial Meeting of the World
\nTrade Organization (WTO) may be just the start of an attack on
\nthe brute force in our daily lives exercised by the power of
\nbusiness. One sector is services.<\/p>\n
When liberalization of services throughout the world was being
\ndiscussed in Cancun under the session on the General Agreement on
\nTrade in Services (GATS) the working committee at our legislature
\nwas working around the clock to finish deliberations on the water
\nresources bill, which allows private companies to control water
\nresources for commercial purposes, despite mounting protests from
\nnon-governmental organizations. The special committee had asked
\nfor a plenary House session to pass the bill on Sept. 23.<\/p>\n
The involvement of the World Bank is crucial to the progress
\nof the bill. Minister of Settlements and Regional Infrastructure
\nSoenarno confirmed on Friday speculation that the water resource
\nbill had something to do with the Water Resources Sector
\nAdjustment Loan (WATSAL), a US$300 loan from the World Bank.
\nUnder this scheme, the bank disburses the loan in three stages:
\nThe first $50 million was disbursed in June 1999 and the second
\ndisbursement, amounting to $100 million, was made at the end of
\n2001.<\/p>\n
The remaining $150 million will be disbursed once Indonesia
\ncompletes its water reform initiative, which includes the
\nenforcement of a water resource law that allows for privatization
\nof the water sector.<\/p>\n
The issues of water liberalization and privatization are only
\npart of liberalization and privatization of services in general.
\nThe draft of the Cancun Ministerial Text on services said, \"We
\nreaffirm that the negotiations shall aim to achieve progressively
\nhigher levels of liberalization with no a priori exclusion of any
\nservice sector; and in accordance with GATS provisions, there
\nshall be due respect for the right of Members to regulate and to
\nintroduce new regulations in pursuance of national policy
\nobjectives.\" The draft remained without significant change until
\nthe end of the conference.<\/p>\n
What does this imply?<\/p>\n
Water, electricity, health, education, telecommunications,
\nrubbish collection, transport policy, banks, investment,
\ninsurance, radio, e-mail, setting up a massage parlor, tourism,
\nland -- these examples all fall within the category of service,
\nmore particularly, GATS. The market? The world's population of 6
\nbillion.<\/p>\n
Global, free trade, not only in goods but also in services
\nseems to be a vast modern utopian project. It aims at bringing
\nall countries into the realms of industrial nations. Never before
\nhas such an ambitious exercise been attempted. Many poor
\ncountries have not been able to afford adequate investment in
\ntheir service sectors, such that multinational corporations, it
\nis said, will help them with both capital and expertise.<\/p>\n
The European Commission admits that GATS is first and foremost
\nan instrument for the benefit of business. Established in 1995,
\nGATS is a follow-up of pressure of multinational companies, which
\nprovide services.<\/p>\n
Clearly, it has faith in the ability of \"the market\" to
\nprovide essential services that benefit all society. Under GATS,
\ngovernments must submit to certain rules when handing over
\nservices for privatization (the request-offer mechanism).<\/p>\n
Countries are free to decide which sectors they will subject
\nto GATS rules, though the aim is for all to be privatized in the
\nend.<\/p>\n
Among other objections, GATS enables multinational
\ncorporations to acquire land (and even the natural resources on
\nand under it) and essential services in any country that signs
\nup. Many consider GATS to be the most evil and dangerous of all
\ninterventions by the rich and powerful into the affairs of poor
\ncountries.<\/p>\n
Therefore, we clearly cannot expect anything from service
\nnegotiations at Cancun. Its objective, the organizers say, was
\n\"to take stock of progress in the negotiations, provide any
\nnecessary political guidance and take decisions as necessary.\"<\/p>\n
GATS established the negotiation guidelines and procedures in
\nMarch 2001. The guidelines are sensitive to public policy
\nconcerns in important sectors such as health care, public
\neducation and cultural industries.<\/p>\n
But it also stresses the importance of liberalization in
\ngeneral, and ensuring foreign service providers have effective
\naccess to domestic markets -- as, predictably, it works in favor
\nof business interests mainly in the developed countries rather
\nthan most poor people in the rest of the world, whose basic needs
\nare neglected.<\/p>\n
While there were 150 proposals in Cancun in the sectors of
\nprofessional services, telecommunications, tourism, financial
\nservices, distribution services, construction services, energy
\nservices, maritime transport, postal\/courier services and
\nenvironmental services -- there were no proposals on health
\nservices and only four on education services, all of which dealt
\nwith private education services, in particular nonacademic
\neducation such as language training, vocational courses,
\ncorporate training and educational testing services.<\/p>\n
GATS and other WTO instruments seem to have hardly ever ruled
\nin favor of society, local economies, health or the environment
\nin preference to free trade market fundamentalism. But in
\ncontrast the WTO does not believe in market fundamentalism when
\nit affects developed countries.<\/p>\n
Thus, solutions for provision of services, particularly the
\nessential ones, are political choices, not technical imperatives
\n-- this is the arena of the struggle.<\/p>\n
Services cover virtually all areas of human life that should
\nnot be controlled by the logic of pure profit accumulation. When
\ninvestment is open to all investors, when financial services are
\nrun by global banks, when the local language and culture cannot
\nbe protected, when governments are forced to sell essential
\nservices to multinational corporations, and when even the land
\nand its natural resources in a poor country can be appropriated
\nby the rich -- what is left?<\/p>\n
The collapsed talks are merely a hiccup in the continuing vast
\nprogress of capital accumulation in the privatization and
\nliberalization of services.<\/p>\n
The writer also lectures at Sahid University, Surakarta, and
\nis a researcher with Uni Sosial Demokrat, Jakarta.<\/p>",
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