A PSI research paper
on sustainable local and regional government funding “provides a set of political and practical options, recommendations and caveats for LRG/municipal unions and their members to make counterproposals and put alternative, progressive options on the table when they are told private financing, externalization and austerity measures are the only way to finance local public services
, including within the implementation of the New Urban Agenda. It is also meant to spur much needed debate which PSI LRG/municipal unions members have a lot of expertise to contribute to.”
Development banks have become a critical component of the effort to build up poorer economies, but their ways of working are flawed. As a result, their contributions can do more harm than good. many governments are calling on them to expand their contribution in key areas such as sustainable infrastructure, agriculture or industrialisation.
In recent years some national Public Development Banks (PDBs) – particularly from BRICS countries (Brazil, Russia, India, China and South Africa) – have emerged as international actors by expanding their remit to financing projects in other developing countries. Not all PDBs succeed, and even the successful ones carry the risk of major negative impacts on development – sometimes due to external factors beyond their control, but more often because of flaws in their design and operation. As a new Eurodad report – published this week as the IMF and World Bank gather for their Spring Meetings in Washington DC – shows, inconsistent performance is partly down to the diverse mandates, roles and operational strategies of the institutions themselves. Eurodad believes some PDBs are failing because they have lost sight of why they were created.
Eurodad’s 2017 International Conference will take place 20-22 June in The Hague bringing together leading civil society thinkers from around the globe working on issues including debt, tax justice, aid, private finance, the International Financial Institutions (IFIs) and global monetary reform to discuss alternative policies for a sustainable world, better ways of financing global development and strengthening global economic regulation and governance.
PSI and Eurodad are organizing a workshop on PPPs on 20 June from 10:00 to 13:00. In the last year NGOs and trade unions have established a fruitful collaboration on PPPs, which resulted - among other things - in a joint boycott letter sent to the World Bank Group in February. The time is now for NGOs and trade unions to exchange ideas on potential advocacy and campaign activities for the year ahead and, if possible, agree on joint actions to further strengthen this collaboration and work towards a global campaign on PPPs.
The takeaways from this workshop will also feed into two related events taking place within the programme of the conference: a workshop on market finance vs. public finance of infrastructure and a strategy meeting on publicly-backed private finance.
The city of Port Colborne, Ontario, Canada, passes a motion aimed at putting an end to public services privatization. “The motion argues that since private contractors need to make a profit, they charge more for products and services than their actual cost. Because they are profit-driven, they often sacrifice quality of service in order to cut costs. Conversely, publicly delivered services are typically non-profit, and any profits are put back into paying for more services.”
Africa and Arab Countries
Opposition leader Margaret Nnananyana Nasha denounces haphazard privatization of public assets and services. Dr. Nasha “said privatization was done arbitrarily with the existing privatization policy being side-lined. The policy is very clear on what steps are to be taken before an entity can be privatized, and in those steps, it is clearly outlined that the workers and nation should be consulted first, but that is not the case in this current regime. (…) Nowadays we privatize everything; it's sad that Botswana Meat Commission (BMC) used to be the biggest foreign currency earner in this country and now they are privatizing it.”
The Public Utilities Workers Union (PUWU) has asked the president for a dialogue on privatization. PUWU General Secretary Michael Adumatta Nyantakyi has called on the president to act. “Although the current government has started consultations to address the issue, the General Secretary says they want to take part in the discussions in order that their concerns will be adequately presented. ‘We know that once the board of MIDA has been constituted, government is not sitting idle with respect to this concession. Definitely some discussions may be going on that we may not be privy to so we think it is important we call on government to honour its word and initiate this process.’ He added that it is critical that the views of key stakeholders are taken on board before any major decision is taken.”
The National Union of Mineworkers (NUM) will mobilize mass protests across the country in an effort to prevent the privatization of Eskom through the involvement of independent power providers (IPPs). “NUM president Thamsanqa Matosa said President Jacob Zuma had been misled on the impact IPPs could have on mining‚ energy and construction sectors. ‘We will embark on rolling mass action to prevent massive job losses‚ electricity price hikes and the possible collapse of the livelihood of people in coal-mining communities’ Matosa said. NUM argues that IPPs which vouch for green energy‚ will lead to closing of five power stations and to 10000 direct job losses with a further 40000 jobs lost throughout the sector.”
Bridge International Academies, a private, for-profit company backed by American billionaires that has come under criticism for promoting the privatization of public education in Africa and elsewhere, has struck back against its critics. “Speaking to the UK’s International Development Select Committee, Shannon May said an ongoing legal battle over the future of Bridge’s Uganda business was down to a period of ‘misinformation’ and ‘confusion,’ that had since been ‘cleared up.’ In November, Uganda’s high court ordered that the education ministry could go ahead with plans to close Bridge’s 63 schools in the country due to concerns over standards and compliance with licensing regulations.” The company is also striking back in the courts.
This new report, Investing in the crisis: Private participation in the education of Syrian refugees, by respected US academics, Assistant Professors Dr Francine Menashy and Dr Zeena Zakharia, University of Massachusetts Boston, explores the complex interrelationship between conflict and private sector participation through a case study of the education of Syrian refugees. It raises serious questions about the growing role of corporate actors and the ethical tensions between humanitarian and profit motivations to engage in this crisis. [Download PDF of full report].
Controversy grows over the proposed sell-off of the NSW land titles registry. The Sydney Morning Herald says, “to privatize an asset of such importance and calibre, you need not just a watertight case but an unimpeachable, transparent process. There is a perception that there has been some unnecessary haste to the transaction. The government has refused to release the scoping study, finalized in 2015, including the business case and cost-benefit analysis. It could announce as soon as this week which of the four bidders has won the right to operate the LPI for the next 35 years. When that happens, the public will be none the wiser as to the actual value of the asset that has been sold on their behalf, nor whether the money raised—earmarked for an upgrade of ANZ Stadium and rebuilding Parramatta Stadium—justified the sale. There seems little doubt that a smoothly functioning land titles registry is of more benefit to more people than a couple of football grounds.” [Video]The Public Service Association (PSA) organized a pop-up protest on International Women’s Day to protest the privatization of disability services. The Labor MP for Blue Mountains, Trish Doyle, spoke up in parliament for disability workers, condemning “the inferior redundancy conditions given to a female-dominated employment sector.”
A Stonnington resident says that privatization of commercial waste collection has led to environmental degradation and an “unlimited” number of waste trucks with “screeching air brakes and ear piercing beeping noises.” He says “it’s time to examine the social and environmental effects of privatization of commercial waste collection.” [Stonnington Leader, 4 April 2017]
A wave of strikes by doctors against violence directed at them has swept India, beginning in Maharashtra and now including Delhi and other areas. One doctor has linked the strikes to privatization. “While violence is rampant in various aspects of life, the attack on doctors must also be placed in the context of the passive privatization of the public healthcare system. For 60 years, we have placed healthcare as a commodity to be sold and bought. The private hospital's loyalty is to shareholders, not the patient. On the other hand, the patient is a consumer. Patients also feel short changed when they have to head to public hospitals for healthcare. So, the moment they enter a government hospital and are faced with apathy, they feel that the system has failed them.”
Privatization has harmed the financial health of the Nagpur Municipal Corporation, affecting public services. Former corporator Vedprakash Arya “blamed [the] privatizing of civic services for NMC’s financial condition. According to him, BJP-led NMC favoured privatization of many important works. Citing the example of water supply, he said privatization failed to improve the service and instead has been resulting in a loss of over Rs 100 crore per annum. Arya submitted a memorandum to the municipal commissioner and urged to improve civic body’s income.”
Brihanmumbai Municipal Corporation's (BMC) solid waste department (SWD) Union Members of the Municipal Majdoor Sanghatna gather in a mass protest at the company’s headquarters due to “nonpayment of dues, privatization and minimal wages” among other issues. Shatabdi hospital workers have marched too. “Workers allege privatization is stealing jobs and leading to exploitation of minimal wages.”
The government tried to head off a planned nationwide strike on April 19 to protest a restructuring of the country’s port administrative system. The labor unions fear the reform program would lead to privatization of port activities in a phased manner and in turn, a loss of jobs and social security for the workers. “The bill in the present form is detrimental to the national sovereignty and to the interests of the ports and their workers,” the unions said in a joint statement. “The indefinite strike is against the unilateral and arbitrary decision of the government to discard the suggestions and views of trade unions/federations on the proposed bill, which would be adversely affecting the workers of major ports as well as the survival of the ports.”
The City of Osaka will privatize the operations of its metro system in April 2018. “The new subway company will be wholly owned by the city for the foreseeable future. Therefore, the city will remain responsible to maintain operations. Privatization will generate issues such as retirement allowance payments and refinancing of corporate debt, which will affect the city's financial position to a degree that is manageable, in [Standard & Poor’s] view.” [Standard & Poor's press release 29 March 2017]
The Metropolitan Electricity Authority of Thailand (MEA) is considering a plan to privatize some of its units. “Better Care MEA is a department within the MEA, which is being considered to be spun off as a private company as it has more than 20 projects from several private and public organizations and demand for its services is rising substantially. The plan to spin off the business must first be approved by the Interior Ministry.”
The “Knowledge Sharing” programme facilitated by the Republic of Korea pushes privatization of public services. “Under the second research topic, the RoK side has put forth criteria and privatization models considered to be suitable for Vietnam, especially for such services as health care, tertiary education, and development research.”
PSI’s Executive Board expressed its full support for the general strike called by trade union centres for 28 April in response to the attacks on democracy, trade union and labour rights by the illegitimate government of Michel Temer. A general strike, the first in 20 years, clearly shows strong opposition from the working class to the backward steps taken by the government.
According to the Central Única dos Trabalhadores (CUT – Central Workers’ Union of Brazil), it was the largest general strike in the country's history, attended by approximately 35 million people. Public and private sector workers, social movements, students and liberal professionals joined forces and held demonstrations in the streets throughout Brazil as a way of demonstrating their opposition to the labour and retirement reforms, in addition to the law on outsourcing. The strike affected public transport, banks, commerce and public and private schools, among other branches.
The general strike happened after a series of demonstrations by the Brazilian trade unions and social movements throughout the country. On 8 March, International Women's Day (IWD), mass demonstrations were held to celebrate IWD and to demand the departure of Michel Temer. On 15 March, several sectors went on strike against the reform of the pension system, and hundreds of thousands protested on the streets of major cities. Two weeks after these massive marches, on 31 March, thousands took to the streets again in preparation for the general strike in protest of measures introduced by President Temer’s government. The main focus was the rejection of the welfare and labour reforms and the draft bill permitting indiscriminate outsourcing, among cries of “Temer Out”. Hundreds of thousands of people took to the streets again on 1st May to protest Michel Temer's policies in demonstrations organized by the trade unions and social movements in the main Brazilian cities."
Despite the unequivocal message from the streets, the outsourcing bill approved by the National Congress was sanctioned by the President.
Sao Paulo’s multimillionaire businessman mayor Joao Doria says he is launching a $2.26 billion privatization program this year, aimed at selling state assets to wealthy Middle Eastern and Chinese interests. “Doria, a member of the business-friendly Brazilian Social Democrat Party, won October's municipal elections, defeating the incumbent mayor from the left-leaning Workers Party, which is opposed to his privatizations plan. Doria said he would create a Municipal Development Fund with the money raised from the sales to invest in health, education, housing and other services. Details of the privatization and concessions could be submitted this month to the municipal council, where Doria holds a majority.”
Minister of Science, Technology, Innovation and Communications says that the Brazilian postal service will have to make “extreme” cuts or it will face privatization.
The Ontario Public Service Employees Union (OPSEU) launches “We Own It,” a grassroots campaign to help protect our communities from privatization. “Privatization means giving private corporations control of public services (like transit or medical testing) and public assets (like hospitals and water treatment plants). The selloff of Hydro One is just one example of how the Ontario government is privatizing a growing number of public services. What does privatization mean for Ontario residents? It means higher costs and worse service. Public services and assets, like highways, hospital labs, and hydro are being sold off to generate profits for private corporations instead of serving our communities. There’s a better option: the public option. A growing number of people in communities across Ontario agree.”
Access to senior care has declined since 2001. “During this time, provincial policies led to the privatization of seniors' care. Specifically, residential-care spaces operated by public health authorities and non-profit organizations declined, while beds in the for-profit sector increased rapidly. Research shows, however, that privatization has failed to increase access to residential long-term care, and that residential care provided by for-profit facilities is generally inferior to care delivered in public or non-profit facilities.” The government has won praise for announcing a $500 million increase in new seniors funding over four years, “although, at most, it will bring seniors' care to the province's own minimum standards.”
Participants in a meeting in Querétaro of the National Feminist Front are creating a political force to defend women’s rights. “They stated that their goal is to build a fair, inclusive and democratic society, [against] the existence of a patriarchy which results in exploitation and domination against women, manifested through violence, dispossession and privatization of property.”
Activists in San Andrés Cholula (Puebla) denounce the local government for repressing opponents of water privatization. Movement members distributed flyers inviting citizens to an informational meeting on 6 April, against the privatization of water. On the street, uniformed municipal police told them to stop because they did not have a sound permit. Minutes later there were eight police cars and uniformed officers who noted that neighbors had complained of noise. Citizens replied to the officers that there is freedom of expression.
The sanitation department of the government of Zapopan has its third director in less than a year. Workers have been demanding his resignation since the end of last year. The Plural Zapopan Workers Union “demanded better working conditions, as there are more than 30 broken trucks and employees should double shifts, [and] there were also differences by wage increases and distribution routes.” Rumors are circulating that the collection service will be privatized.
Union leaders and education advocates joined forces on 21 April in front of the World Bank in protest of its continued support of for-profit education agencies in general, and specifically, Bridge International Academies. In a joint letter to Jim Yong Kim, president of the World Bank, the leaders of several teachers' unions from around the world and global unions call on the World Bank to immediately cease its support for low-fee private schools like Bridge International Academies.
"Access to education is a fundamental human right and must not be based on a family’s ability to pay. By supporting the expansion of low-fee private schooling and other competitive practices, the World Bank is ensuring that a large number of the world's most vulnerable children have no hope for a quality education. We believe that a high-quality public education must be recognized as a public good, and that the provision of education is a primary responsibility of governments, not corporations and entrepreneurs."
The next big thing in American infrastructure investment is public-private partnerships. Although private companies have long played a key role in designing and constructing public projects, federal and state officials increasingly view the private sector as the dollars-and-cents answer to digging out of the rubble of failing highways, bridges, and transit. Public-private partnerships may indeed provide the dollars that fearful politicians are unable to pry from the pockets of their tax-averse constituents. But P3s, as they are known in the infrastructure sector, are more complex than they appear to people who just want to get where they’re going. In a new Economic Policy Institute report, “No Free Bridge,” researcher Hunter Blair shows just why these partnerships are far from a “eureka” moment for America’s infrastructure woes. “The idea that P3s allow infrastructure to be built for free is economic snake oil,” Blair said.
North Miami Beach, Florida, is moving ahead with a water privatization deal despite an air of corruption hanging over the city. “At the beginning of North Miami Beach's meeting last night about a plan to privatize its water system, City Manager Ana Garcia asked residents to trust the city based on the commission's track record. That was an odd appeal, considering Mayor George Vallejo is the subject of an ongoing Miami-Dade County criminal probe and the FBI and Miami-Dade County Public Corruption unit have launched investigations into the water negotiations. Despite all those red flags, commissioners voted 4-2 last night to move forward with the plan after a testy meeting that lasted close to three hours. The FBI's probe, which City Attorney Jose Smith confirmed to New Times last week, was not even discussed.”
Trump’s plan to put his son-in-law, who has no government experience, in charge of reorganizing the enormous federal government, has many concerned. Jeremy Mohler of In the Public Interest writes, “the move harkens back to Ronald Reagan’s 1987 commission on privatization, which recommended privatizing prisons, the Postal Service, and many other government functions.” Prominent attorney Ron Klain writes that it’s a bait-and-switch: “there is reason to suspect that the Office of American Innovation is just a front for an effort to peel away environmental, health, safety and consumer-protection rules in the name of making government more efficient.” Elizabeth Spiers, who worked for Kushner, says “he’s the wrong man for the job,” citing his real estate mentality and business innovation blind spots. Marilyn Park, legislative representative on veterans’ issues for the American Federation of Government Employees, said “I'm very concerned that this ‘reimagining’ effort is another name for dismantling the Veterans Association.”
“A record. Never before had Wallonia sent so many political representatives—108 burgomasters, aldermen, presidents of intermunicipal associations—to the MIPIM de Cannes, the high mass of real estate professionals.” The objective? “In a context of scarcity of public finances,” to try to chase “public private partnerships.” But “the PPP model is not without risk. It can be difficult for cities in search of major projects to resist the lobby of large real estate interests. (…) Let's not be fooled: the most profitable real estate projects can deprive people of public spaces, parks, historic monuments, brownfields, and other projects with high social or environmental added value.”
The plan to privatize the Sarajevo Insurance Company has split the ruling coalition parties and has been denounced by the opposition SDP. “The SBB has demanded from the Federation Government to annul its decision and present the exact data about the financial and market state of the company via the Privatization Agency to the Sarajevo Insurance Company Labour Union. In case this does not happen, the SBB said that it would ask for a replacement of Federation Prime Minister Fadil Novalic.” [BBC Monitoring European, 3 April 2017 (citing report by Bosnia-Herzegovina Federation public TV)].
Bengt Holmstrom, the Finnish born Nobel economics laureate in 2016, defends the role of the public sector. “Privatization has been a source of polarization in Finnish politics, particularly during the current government. Holmstrom said that those duties the state has taken over are usually what the private sector cannot cope with. ‘Therefore it is not sensible to copy the practices of the private sector to the public services. It is a huge mistake,’ he said.”
Nuclear power workers in Civeaux go on strike over a number of issues, including their opposition to the privatization of dams in L'Isle-Jourdain and Chatellerault.
Blood donors in Saint-Hippolyte are rewarded for staving off privatization. “Representing the departmental association, Raymond Tournier, vice-president, warned that it was necessary to be vigilant if we did not want to see a privatization of blood donations as it was done in the United States: ‘This donation must remain voluntary so that it does not turn into business.’” [Sub required]
The Economist Intelligence Unit backs a government crackdown on resistance to privatization. “The government has already faced extensive strikes by trade unions protesting at privatization and tax reform plans, and may now be confronted with even bigger protests. Companies operating in Greece should closely follow further government reform proposals and trade union reactions to them.” [“Greece risk: Labour market risk,” Economist Intelligence Unit—Risk Briefing, 3 April 2017]
In the wake of a wildcat strike, Minister for Transport Shane Ross denies that Bus Éireann will be privatised. “Earlier, Solidarity TD Mick Barry said: "The way forward can only be shown if you say there is going to be an increased subvention for a proper public transport service and Minister Leo Varadkar says we are going to properly compensate Bus Éireann for the free travel pass. ‘Otherwise it is about a low-paid, race to the bottom and privatization agenda.’ Mr Barry said the message from people around the country to the Minister was to resolve the dispute and fund public transport.”
The PD’s privatization drive is running out of steam as elections approach. “They are unpopular with the unions and politicians who see state companies as a source of jobs and favors to hand out,” said Stefano Micossi, an economics professor and director general of Assonime. “There is enormous resistance from the PD and also inside the government.” Reuters reports, “the Post Office, whose top management was changed by the Treasury this month, declined to comment on whether privatization would go ahead this year. The state railways is supposed to spin off its high speed and long distance train businesses by July with a view to selling them by the end of the year, but has still not named the advisers for the spin-off.”
Medical students rally against privatization of public healthcare. “‘Patients not Profit' held a demonstration in Valletta this afternoon against the trend towards privatizing Malta's healthcare system. The group said the activity was aimed at raising awareness about what taxpayer's money is actually being used on. Matthew Drake, a fifth-year medical student, called for transparency especially when dealing with healthcare issues. ‘The health service should be patient-centric, not aimed at making profits,’ Drake said, adding that ‘expanding Malta's healthcare services shouldn't have been speeded up by renting out three hospitals to a commercial company.’ Vitals Global Healthcare has taken over the Gozo General Hospital, St Luke's Hospital and Karin Grech Rehabilitation Hospital.”
Reuters reports on what it sees as the successes of Portugal’s government alliance. “Last year, the government already raised the minimum monthly wage to 530 euros ($570) from 505 euros a year earlier. It will continue rising till it reaches 600 euros in 2019, the last year of the government's current term. State sector salaries and pensions are also being increased in stages, while the alliance is slowing a privatization drive pursued by the previous center-right government. Despite this generosity, the alliance succeeded in lowering the deficit.”
The New York Times asks why Britain’s trains don’t run on time and finds its answer: “capitalism.” The background: “On the eve of the great sell-off of the 1990s, Mr. Major pledged that rail privatization would bring a ‘better, cheaper and more effective service for the commuter.’ To repeat that promise to Govia's beleaguered passengers today would at best provoke mirthless laughter. On Southern, passenger satisfaction slumped to 21 percent this year; nearly half of those surveyed reported delays in their last journey. How did we get here? Not on a Southern train, obviously: The company has become a byword for overcrowding, delays and understaffing. By introducing competition, privatization was supposed to make rail travel more affordable.”
Watch this tongue in cheek video by The People for Jeremy Corbyn where billionaire Richard Branson, explains why rail privatization is so great.
Columnist Tim Murgatroyd writes about “the mysterious case of the disappearing [public] services.” He says “there have been other alien abductions, of late, in York. For one thing, it seems increasingly hard to find a bin for your sandwich wrapper or coffee cup in the city centre. This may seem a small issue. But it seems to me a harbinger of public spending cuts to come in our austerity-plagued times. And you see the signs everywhere if you look hard enough. For example, police officers seem to have been largely replaced by street rangers in the city centre. Now I am not denigrating these mainly youthful individuals ranging from Piccadilly to Parliament Street. It’s just that I would prefer to have properly trained and accountable police officers protecting my city.”
East Kent hospital workers threaten to strike over NHS outsourcing. “The GMB accuses the contractor of creating a two-tier workforce because it fails to maintain the same pay and conditions as employees who work directly for the hospitals trust. At present the trust outsources portering and domestic and catering services to Serco—which the union wants returned in-house. Gary Palmer, the GMB's regional NHS campaigns organizer, is appealing directly to trust chief executive Matthew Kershaw. ‘We are clear that we will not accept privatization of the NHS in any form and we will campaign to see all health services back in-house where they belong,’ Mr. Palmer said.” [Kentish Gazette, 6 April 2017]
The Crown Prosecution Service says it will file criminal charges against two for-profit companies that run an immigration detention center. “Prince Fosu , a Ghanaian national, died suddenly at Harmondsworth Immigration Removal Centre in west London on the morning of October 30 2012. The 31-year-old was discovered lying on the concrete floor of his cell at the facility by staff. The Crown Prosecution Service said on Tuesday that it has decided that the GEO Group UK Ltd., which ran Harmondsworth at the time, and Nestor Primecare Services Ltd., which ran health services at the centre under contract to GEO, should face charges of breaching Section 3 of the Health and Safety at Work Act 1974. An offence is committed under this section when an employer ‘fails to take reasonable care of the health and safety of someone affected by their undertaking,’ the CPS said.”