Privatizing public goods: Our lives up for sale

Privatizing public goods: Our lives up for sale

Yanuar Nugroho, Researcher, General Secretary,
Uni Sosial Demokrat, Jakarta, yanuar-n@unisosdem.org

Beware. In the coming years, we in Indonesia may have to pay
more not only for our drinking water, but also for bathing and
watering flowers at home. We may also have to pay for permission
to dig a well in our backyards.

Worse, farmers and villagers may no longer be able to access
water from rivers or springs, for corporations will already have
been given the right to access all water resources.

And as marine resources management would be privatized, hiding
behind the authorities to protect the area, fishermen will be in
danger of being wiped out by the corporations away from the open
space where they usually fish.

Are these worries real? They seem to be. And most probably
there are more examples.

The bill on water resources has already reached the
legislature, to be ratified by the end of this year. Other bills
are lining up -- forest management, mining, marine resources,
etc. They involve the plans to implement one of the conditions
imposed in the Letter of Intent (LoI) involving the International
Monetary Fund: Privatization. And it has gone beyond what we may
think: Privatizing of "public goods".

Instead of fighting for authority in natural resources
management, the government seems to have no other choice but to
follow what the IMF prescribes. Take Presidential Decree No.
96/2000. It states that share-ownership for any companies working
in the water sector can make up 95 percent of their total share.
Such a commitment, according to research by the Indonesian Forum
on Globalization this year, clearly sabotages the authorities in
charge of managing water resources.

Similar to the dispute around the issue of selling the
permission to utilize free-frequency 2.4 GHz for wireless data
communication (in contrast to the phone lines, who owns
frequencies anyway?), the case in water privatization seems quite
subtle. But if it succeeds, the next in line for sale might be
air, or other public goods which we would never have imagined
before. What is behind all of this?

According to a recent book by Keith Bezanson, the notion of
"public goods" has recently assumed center stage in the
international agenda of policy makers for two reasons. First,
political and social pressure is mounting for the financing of a
wide range of new initiatives in the name of public goods.
Second, there is much disagreement on the value and potential of
an international public goods approach in addressing global
concerns.

This has raised a number of key questions. The most important
one is the conceptual framework that integrates the key factors
affecting the definition, delivery and consumption of public
goods. Although the bright side of it might be acceptable --
potential payoffs, particularly in terms of better and more
effective policies to address common concerns -- on the other
side, the lack of clarity could lead to misguided policies and
involve high opportunity costs.

We have to be very aware; it is not possible to escape values,
preferences, interests, asymmetrical knowledge and power
relations in defining "public goods" and in arranging for their
provision.

This is the point where the problem becomes very complex, when
the notion of public goods is then related to resources available
in the developing countries. These are the countries left behind
and trapped in serious foreign debt. Most are implementing the
IMF's ambivalent prescriptions by imposing the "Structural
Adjustment Programs" (SAP).

Under this prescription, financial liberalization and open
market are extended and reinforced and the problem of
privatization of public goods begins. What is the argument?
Pushing exports to earn foreign exchange -- prioritized over
basic necessities, food production and other goods for domestic
use -- to pay the debt.

And for doing so, economies in the Third World have been being
deflated; the governments are withdrawn not only from public
enterprise but also from compassionate support of the basic
health and welfare of the most vulnerable, according to the 1999
Economic Justice Report, 1999.

The SAP may not have put the suffering Third World countries
back on a steady economic keel, but they have certainly helped
undermine democracy in those nations.

In 1999 Joseph Stiglitz wrote that there are real risks
associated with delegating excessive power to international
agencies. Such institutions can become an interest group,
concerned with maintaining its position and advancing its power.

He adds, that if we believe in a democratic process, countries
must make decisions for themselves; economic advisors should only
advise them of prevailing views.

Indeed, SAPs really only make sense when seen through the lens
of economic globalization. This is how we might be able to
understand the whole logic behind privatizing public goods.

They are an integral part of the free market orthodoxy that
aims to give free rein to private corporations to trade, invest
and control all resources, including the natural ones. By doing
so, they move capital around the globe with a minimum amount of
government interference; as the debt loan on all governments,
particularly those of the Third World, has crippled their
capacity to look after their citizens, let alone to protect and
manage natural resources and public goods from being privatized.

The needs of capital are not always the same as the needs of
society, says writer Noreena Hertz, but this is the age of silent
take-over, in which government power and people's authority have
been wiped out by the potent control of corporations.

It seems that we are in an era where all of us are being
indoctrinated in liberalized trade and investment, heartily
endorsed by the world's biggest banks and corporations. A
deregulated, privatized, corporate-led free market is being
touted as the answer to humanity's problems. The proof, though,
is not so easily found.

Further, is there any possibility of customer politics of the
stick-and-carrot type to entice corporations and business
community to redefine their roles in society? Can governments,
while allowing corporate interests to take precedence over those
of the public, also provide areas where corporation and business
community may decide to put the public needs first?

If the answer is "no", we have surely to go beyond our current
concepts of politics and economics, for obviously we are lagging
behind history.