This Asia Times story is sadly typical of journalists writing about "privatization" and "capitalism" and "free" markets.
PENANG - Selling water rights to private institutions and then having people buy them back again is an issue that rears its ugly head at every World Water Day, which fell on Tuesday.Goaded by international financial institutions and corporate interests, regional governments are pressing ahead with plans for more private participation in water services. And yet all across Asia, water privatization schemes are failing to deliver clean and safe drinking water to communities, despite forcing consumers to pay for a basic human right.
"If you look for a water privatization arrangement that works ... I cannot think of any," Manila-based Mary Ann Manahan, a researcher with Focus on the Global South, told Inter Press Service in a telephone interview.
In contrast, the sterling performance of some major publicly managed water utilities in Asia has demolished the argument that private-sector participation is the only way to improve efficiency.
There follows a litany of woe about "privatization arrangements" -- your first clue, that word "arrangements" -- and "schemes."
(Also, note the assumption that having clean drinking water provided to one is a "basic human right." Provided -- by whom? How? Ah, sorry, no answer provided. This isn't a philosophy journal, after all.)
Now where, again, are things said to be so bad? Hmm...Jakarta and Manila, according to the story. Wow. Indonesia and the Philippines, two shining cities on hills of the rule of law, respect for property rights, and honest, corruption-free public officials...really, isn't that your view of both nations as they exist today?
But let's take a look at this story again. Let's see what else we can see, shall we?
"There has been an extremely high failure rate for private concessions and long-term BOT [build-operate-transfer contracts] which may get worse if Suez and Thames leave their contracts in Manila and Jakarta," said the study.And yet, privatization schemes are being pushed with vigor by international financial institutions such as the World Bank and the Asian Development Bank, coupled with lobby groups such as the Global Water Partnership and the World Water Council. Manahan pointed out that the World Bank has increased its lending on water projects from US$546 million in 2002 to $3 billion in 2005. "But there is no clear indication that this has led to cleaner, more affordable water for people on the margins," she said.
In addition, the European Union has come up with initiatives in the World Trade Organization to pry open national water services to the big foreign players. Indeed, since the mid-1990s, developing countries have been coaxed to privatize water services through "public-private partnership" or private-sector participation.
Oh my, oh my oh my oh my, now that was a shock, was it not? "Public-private partnership." Boy, we sure didn't expect to see anything like that, did we?
As it ever has been, whether here in the United States or in the fair, corruption-free republics of southern Asia, which "partner," gentle reader, would you imagine to be the senior of the two: the public partner or the private one?
Hmmm. Yeah, that was my guess, too. Funny, isn't it?
But there's more. The story goes on, innocently using Manila as an example of its privatization horror story:
For instance, in Manila, the government touted water privatization as the solution to a looming water crisis in the Philippines. "They promised there would be no price hikes in water for five years," Manahan pointed out. "But within three years, they filed for tariff increases."Instead of the promised lower rates, Maynilad Water Services, which holds Manila's west zone concession, raised tariffs by as much as 400% between 1997 and 2003. Manila Water Company, the east zone concessionaire, raised water tariffs by 700% in the same period.
When Manila's privatized arrangements failed, the eventual "solution" by the Philippine government was "rehabilitation". But Manahan prefers to call a spade a spade. "It's a bailout," she said starkly.
Did you catch the term "concession?" That's a polite term for "monopoly," isn't it? A government-granted, government-enforced monopoly. Period. Is Manahan willing to call that spade a spade? I didn't think so.
Again, that's the way it is here, that's the way it is anywhere. Remember energy "deregulation" and "privatization" in California in the late 1990s? Remember the result? It was Enron and brownouts all over the state of California, and the destruction of the accounting firm Arthur Anderson. There is no reason to think that things are any different in Manila or Penang or Jakarta. None.
And note the tone of the story: where is the fault to be found? Gentle reader, not with the government, at any level, oh no -- but only with one partner in that "public-private" partnership. The one "partner" which is always blamed (hint: it will never be the "public" partner). Notice that there is no sense of partnership liability here, as there would be with, say, a law firm in the United States, or an accounting firm, or, as may be relevant here, a civil engineering firm -- law and accounting and engineering being three professions whose practitioners commonly associate themselves as partnerships. Oh no. Not at all.
No, the senior "partner" gets to write all the rules, set all the terms, and cast all the blame if things don't go as planned.
(One might also find it fruitful to ask which "partner" did the planning, and which one did the approving.)
Consider: we're talking here about nations where people are employed to make hundred-dollar-a-pair running shoes, nations which manufacture our automobiles and automobile parts, our computers and computer parts and peripherals. These are not nations full of stupid, lazy people.
But if you spend a week in southeast Asia you're likely to endure rain on eight of those days, and yet they can't provide clean drinking water to their people? And this is blamed on the private sector?
Have we found an Asian language in which the word for "water" is deja-vu?
Posted by Craig Ceely at March 27, 2005 11:02 PM